S P Sharma
The duo Prime Minister Narinder Modi and his Finance Minister Sh. Arun Jaitely deserve Kudos for presenting growth oriented , balanced and excellent budget on 1st Feb, 2017. The budget indicates bold steps, valiant efforts to build Rural Bharat and infrastructure imperative for progress of country. The Budget represents little wonder and professional approach to ameliorate the lot of the poorest of the poor. Attempt is towards the population at the bottom of resources. At the same time Finance Minister has not gone beyond the fiscal discipline by keeping the fiscal deficit at 3.2% and this is very positive feature of his budget for the year 2017-18.
The Budget 2017-18 throws major focus towards enrichment of Rural Bharat and Budget talks about supremely of farmers and clearly focuses on doubling farmers income in not very distant future but within five years as per Arun Jaitely, Finance Minister and have undertaken enormous efforts aimed towards this vital objective in mind. The following provision and outlays in Budget speaks the objectives:-
i) MGNREGA allocation to be the highest over Rs. 48,000 crore in 2017-18 and it is proposed to be brought under digital scrutiny; and help of space Technology being sought in consultation with DRDO to keep watch on the implementation of Budget proposals;
ii) Budget papers reveal that allocation made to the Agriculture Ministry were Rs.51,026 crore which is 6% over last year. Considering good Monsoon and good winter rain, the Agriculture is expected to grow at 4.1%;
iii) The allocation on rural Development is also all time high amounting to Rs.1,28,560 crores;
iv) The budgetary provision for health has gone up from Rs.38,343 Crores to Rs.47,352 Crore ;
v) The provision of Rs.10,000 crore to Bharat Internet project and the goal to reach nearly 1.5 lakh Gram Panchayats with high speed Internet would certainly lay the foundation of digital transformation in Agriculture;
vi) Total allocation for Agriculture and allied sector have gone to high figure of Rs.1,87,223 crore 24% increase as compared to last year;
vii) The target of coverage of Fasal Beema Yojna to go up to 40% of cropped area. The ambitious project 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, requirements of nutrients and to improve productivity . The step towards dairy development is also step in the right direction since in case of distress and bad weather , Dairy income provide consolation to farmers;
viii) The Budget aims to bring Rs. 1 crore households out of poverty by 2019 is big step towards poverty alleviation. It shall be coupled with provision to complete 1 crore housing for the poor households, devoid of homes in the rural area. Besides, it is also targeted to achieve 100% rural electrification under “Deen Dayal Upadhaya Gramjyoti Yojna”. A sum of Rs.4,814 crore has been allocated for this purpose . The target to build ponds and compost pit is likely to be achieved by March,2017 which is the earlier date from the stipulated date put last year and this is case of early execution of project before the targeted date;
ix) It is also targeted that all trains will have bio-toilets by the year 2019;
x) Since G.S.T proposed to become applicable from 1st July,2017, the Finance Minister thought fit not to bring any change in indirect taxes;
Proposed changes in direct taxes
* In order to cool the anger of people resulting from demonetization which was badly executed and caused difficulties to people, the Finance Minister has reduced the first slab of Income-tax from existing 10% to 5% providing tax relief to every tax payers to the tune of Rs.12,875/- inclusive of education cess;
* The Finance Minister told that existing rebate for those earning Rs.5 lakh or less will now be reduced to Rs.2500/- and available to only to those earning an income up to Rs.3.5 lakh (after deductions, if any). It means that person with an income of Rs.3 lacs shall not be liable to any tax. The Finance Minister has also proposed to levy a surcharge of 10% of tax payable on those whose annual taxable income is between Rs.50 lacs and Rs.1 Crore.
* The existing surcharge of 15% of tax on super rich earning more than Rs.1 crore will continue;
* In order to make MSME more viable Income tax for companies with annual turnover up to Rs.50 crore reduced to 25% from existing 30%. It is suggested that alongwith companies firm should also be included within the ambit of this change providing 5% relief in tax. There is no logical reason to keep Partnership Firm out of the preview of this concession ;
* Housing to be given infrastructure status which entails number of benefits to Housing Sector. Definition of affordable Housing amended to include carpet area instead of build up area;
* Expressing more reliance on digital payments, Govt imposes cap on cash transactions above Rs.3 lakh. This amendment has been carried out on the recommendation of S.I.T set up by the Government to plug black money. Black Money transactions are mostly transacted in cash and documents with Government suggest huge amount of domestic black money. In order to plug these loopholes newly introduced Sec.269 ST provides as under:-
That no person shall receive an amount of Rs.3 lakh or more,
(a) in aggregate from a person in a day;
(b) in respect of single transaction and single transaction relating to one event or occasion from person, otherwise than by an account Payee’s Cheque or account Payee’s Bank Draft or use of electronic clearing system through a bank account. However the above restriction shall not apply to Government or any banking company or Post office Saving Bank;
* The holding period for considering Capital Gain from immovable property to be long term is reduced to two years from existing three years. Also the base year for indexation is proposed to be shifted from 01-04-1981 to 01-04-2001 for all classes of assets including immovable property. This amendment shall significantly reduce Capital Gain tax liability;
* In order to cleanse the system of political donation, Finance Minister Arun Jaitely proposed Rs.2000 ceiling on cash donation by any individual to a party. However, the political parties could receive donations by cheque or digital mode from donors.
* The Finance Ministers in his budget has just presented a glimpse of plugging and generation of Black money. The major problem is still intact and could only be obliterated when person to person contact is absolutely avoided and such type of in-built, mechanism and system is introduced.
Conclusion
Considering the thrust penetrated by this budget to improve rural economy, the budget could really be called popular budget and not populist budget. To eradicate poverty should be touchstone of political parties and this budget is milestone towards that aim. Post demonitisation, Government has laid emphasis on digital economy. More, the digital transaction lesser the generation of black money. The Finance Minister under able guidance of Prime Minister has made efforts that budget is good from every angle and deliver from every count. Much would depend upon efficient implementation.
(The author is practicing Chartered Accountant)
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