The Union budget for 2017-18 is uniquely balanced with its focus upon all-round development of agriculture, industry, animal husbandry, rural areas, infrastructure, defence, education, health, housing, startups, etc. Focusing upon inclusive growth it is well dedicated for the welfare of women, child, youth and all vulnerable sections of the society. Moreover, the Finance Minister (FM), while limiting within fiscal prudence by keeping the fiscal deficit at 3.2% of GDP has raised outlays for all deserving and demanding heads of development and welfare. Yet, he has pegged the overall expenditure growth quite low, at 6.5%, when the nominal GDP growth is also projected at 11.75%. Prioritising investmentexpenditure and highlighting the developmental needs of country the FM has raised capital expenditure by more than 10% to Rs 3.1 lakh crore.
The initiatives highlighted in budget for the forthcoming fiscal, comprehensive to address all segments of economy and all sections of society, while keeping the overall expenditure growth pegged to 6.5%, have provided enhanced outlays on key areas like agriculture, rural development and employment generation by more than 20%, 25% and 42% respectively, over the current year’s budget estimates. It deserves all the praise for curbing non-productive expenditures and dedicating resources on development and welfare. The social sectors, including education, health and other welfare heads have also weighed heavily in the priority of the FM to have secured a growth of more than 16% over the current fiscal. A hefty allocation of Rs. 3.96 lakh crore (13.5% above the current year’s allocation) on infrastructure would trigger growth into several sectors by generating the demand directly and indirectly through a trickle down impact. Allocation of 18% of the total budgetary outlay of Rs 21.5 lakh crore next year, is a pleasant surprise for the long term developmental needs almost without getting tempted to deviate and divert these funds towards cheap populist announcements, to wean voters in the 5 states going to polls. It portrays noble and ideal democrative propriety on the part of the government.
In tune with the government’s commitment to double the farmers’ income the Budget has extended very liberal support to the agriculture to almost a record level, ever given after the end of the first five year plan. Total allocations for agriculture and allied sectors have peaked to a new high of Rs 1,87,223 crore, 24% up from the last year along with a most ambitious target of coverage of Fasal Beema Yojna to go up to 40% of cropped area in 2016 and 50% in 2018-19 from 30% at present. The ambitious target to cover all the 648 Krishi Vigyan Kendra for setting up new mini labs for issuance of soil health cards which would go a long way to fine-tune soil health, right needs assessment of nutrients and to improve productivity. In India, animal husbandry gives a silver lining for the farmer to survive with additional income in tough times. So, creation of dairy processing infrastructure fund with a initial corpus of Rs 2,000 crore is a good beginning.
Rural development has a big bang of package in the next fiscal’s budget to bring 1 crore households out of poverty by 2019, almost unprecedented in the history of poverty alleviation programmes of 5 decades coupled with the proposal to complete 1 crore houses for poor households, devoid of homes in the rural area. Besides, the next fiscal is going to be a landmark year in the history of the country to achieve 100% rural electrification, a long cherished goal for decades. For this purpose an allocation of Rs 4,814 crore has been provided under the Deen Dayal Upadhyaya Gramjyoti Yojna in 2017-18. For raising the value addition and enhancing the productivity contribution from of MGNREGA works would be fine-tuned by use of space technology in a big way, with the target of taking up 5 lakh farm ponds under the MGNREGA. It would revolutionise the villages to be draught proof. The target 5 lakh farm ponds and 10 lakh compose pits announced in the last budget from MGNREGA funds would not only been fully achieved by March 2017 but would exceed by 100%, wherein 10 lakh farm ponds would be completed by March 2017. Another landmark in the history of MGNREGA is that participation of women increased to 55% from less than 48% earlier.
While stepping up the government’s focus upon youth and poverty alleviation, the government has proposed herculean task of training 3.5 crore youth under the livelihood promotion, programme “Sankalp” for providing market relevant training at a cost of Rs 4,000 crore. Creation of 5,000 additional medical P.G. seats and proposal to set up new All India Institute of Medical Science (AIIMS) for Jharkhand and Gujarat would serve the twin purpose of offering enhanced opportunities of medical education to a greater number of youth as well as to augment the availability of medical professionals in the country.
Proposal to introduce a system ofmeasuring annual learning outcome an innovation fund for secondary Education alongwith revamping of UGC, including ranking of colleges and grant of more autonomy to colleges qualifying in the ranking process would go a long way in improving the quality of education in the country.
Make in India, the flagship programme of the government, would get a big boost with the budget unveiling fresh steps to correct anomalies in the indirect tax structure to encourage manufacturing in the country. Sectors including information technology hardware, capital goods, defence production, textiles, minerals fuels and mineral oils, chemicals and petrochemicals, paper, paperboard and newsprint, maintenance repair and overhauling (MRO) of aircraft and ship repair will see changes in their customs and excise duty structure. This will bring down manufacturing and compliance costs, boosting global competitiveness of domestic operators.
Silver medallion, silver coins having silver content not below 99.9%, semi-manufactured, will now attract countervailing duty to stimulate the domestic jewellery sector. There is exemption of excise duty on several solar energy items, micro-ATMs and PoS (Point of Sale) devices, which would give further boost to Make in India initiative.
Now the SMEs with turnover up to Rs 2 crore will attract lower presentive tax of 6% instead of 8%. The corporate tax hasbeen reduced from 30% to 25% for those who have annual turnover of less than 50 crore. Start ups will have to pay taxes for 3 out of 7 years. The proposal for credit guarantee for start-ups has also been doubled from Rs 1 crore to 2 crore. These would go a long way in promoting start-ups and MSME sectors.
The government's push to enlarge India's digital footprint is set to deliver a vast slew of opportunities for startups in areas from education to healthcare, entertainment and financial technology. The Indian startup sector -accustomed to being in the spotlight during preceding Union Budgets are again enthused from the allocation of Rs 10,000 crore for the BharatNet project in fiscal 2018 is expected to spur rural connectivity, as it will deliver high-speed broadband to over 1.5 lakh Gram Panchayats with hotspots and access to digital services at low tariffs. Digital entrepreneurs believe this is the highway that will help them penetrate rural markets.
Increased allocation for incentive schemes like M-SIPS (Modified Special Incentives Package Scheme) and EDF (Electronics Development Fund) to the tune of Rs 745 crore in 2017-18, is a welcome step when, 250 investment proposals for electronics manufacturing, with an investment of Rs 1.26 lakh crore, have already been received in the past two years.
The Finance Minister has given big relief to salaried people to halve the tax rate of 10% to 5% for individual assesses of income Rs 2.5 lakh to Rs 5 lakh. The shift to accrual-based financial statements for railways by March 2019 is another important step for comprehensive transparency in public finances. As expected, the budget re-emphasised the importance of improved tax compliance. In addition to the rollout of the goods and services tax, the limits on cash transactions and the proposals for political funding would improve compliance and transparency.
The stock markets have given a thumbs-up response to the Budget posting their biggest single-day gain of two months. In terms of budget day performance, both the indices rallied the highest in 12 years. The boost given in budget to housing has fired up shares of banking, real estate, housing finance and cement companies.
Thus, union Budget for 2017-18 is a unique blend of comprehensive initiatives to take care of aspirations of most of the sectors of economy and sections of society with core focus on the development of farmers, upliftment of rural population, all around youth development, massive boost to poor and under privileged people and on unprecedented push for the infrastructure development. It is most comprehensive in approach with utmost fiscal prudence for a renewed spurt to inclusive growth. It is also first time that the budget is presented under 10 discrete themes and well in advance on February 1, to put it in action from day one of the new fiscal with requisite preparatory work.