GOPAL KRISHNA AGRWAL
Underlying message from the budget is that, it has abstained from window dressing with populist announcements, in spite of elections in five states, and has hit at the core of the economy where it hurts more. FM has wonderfully touched the problematic area of the economy and has taken corrective measures having far reaching consequences. Important area, such as rural connectivity, farmers woes, youth employment, catalyzing demands, government investments, electoral reforms, higher tax compliance, lowering of taxes for individuals, reducing corporate taxes of MSME’s with turnover up to 50 crores, tackling the issues for remonetisation and moving towards low transaction cost digital economy, large scale capitalization support for unorganized sector and taking steps towards ease of doing business, creating rural infrastructure and making available low cost housing and social security for the poor and left out segments of the society etc. are some important initiatives.
You name any segment in the country or any sector of the economy, Prime Minister Narendra Modiji’s this budget has something for everyone. It’s like a magic box through which FM has been able to satisfy everyone’s need but not anyone’s greed. Government has brought down inflation from 6% in July to 3.4% in December 2016, current account deficit from about 1% of GDP to 0.3% in first half year of 2016/17 and growth in FDI growing to 36% despite reduction of global FDI flows by 5%, are all big achievements.Though there are challenges of meeting global recession, but Government is tackling them head on. Constitutional amendment bill for GST has been passed and landmark decision for demonetisation of high value currency to curb Black money and corruption has been successfully implemented. Insolvency and Bankruptcy Code is in place to improve overall banks health. For catalyzing demand; Government Investments is being increased to Rs 3,96,000 crores.
Governments Agenda for Budget for 2017/18 is to ‘Transform, Energise and Clean India having ten clear cut road maps for growth. Basically government has committed to double farmers income by 2022, providing basic infrastructure in rural areas, creating employment for youth through education and skilling. Strengthening of Social security, housing and health facilities for the underprivileged. Infrastructure for all. Stable and stronger Institutions in the financial sector. Moving towards digital economy for transparency and lower cost of transactions. Efficient delivery mechanism for all public services, optimal & judicious fiscal management and efficient & proper tax administration. These are the road maps through which the government wants to propel growth and catalyze economy.
Our sectoral analysis brings out clearly the above facts. For tackling Farmer’s Woes;a sum of Rs. 10 lakh crore is allocated as credit to farmers. Their 60day’s interest on loan has been waived;NABARD fund has been increased to Rs. 40,000 crore. A dedicated micro irrigation fund has been set up with Rs 5,000 crore initial corpuses;irrigation corpus is doubled to Rs 40,000 crore. And a model law on contract farmingis prepared by NITI Aayog and shared with the States for implementation.
For Rural Development and Connectivity; Rs 1,87,223 crore have been allocated. A daily target of building 131 kms of road has been set. Promise to achieve 100% rural electrification by March 2018 and the government target’s to bring 1 crore households out of poverty by 2019.
For Skilling and Education of the Young India;100 international skill centres will be established with courses in foreign languages. A National testing agency is to be established for all entrance exams and focus will be on 3,479 educationally backward blocks. Most important initiative of Electoral Reforms;starts with limiting, the maximum amount of cash donation for a political party to Rs. 2,000 from any one source.An amendment is being proposed to the RBI Act to enable issuance of electoral bonds, with maturity date.A donor can purchase these bonds from banks or post offices through cheque or digital transactions; only registered political parties can redeem these. Now it’s compulsory for all political parties to file Income Tax return by December end every year.
For increased Tax Compliance;after demonetization, all deposit data is to be analysed to increase tax net.No cash transactions above Rs 3 lakh are allowed.Time period of revising tax returns is reduced to 12 months and people filing I-T returns for the first time will not come under any government scrutiny. And a Simple one-page return for people with an annual income of Rs. 5 lakh other than business income has been prescribed.
Even there is Lowering of Taxrates for individuals;Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh is reduced to 5% from 10%, therefore all other categories of tax-payers in subsequent brackets will also get a benefit of Rs 12,500.
There has been reduction in Corporate Taxes for MSME sector.In order to make MSME companies more viable, for small companies with a turnover of up to Rs 50 crore to 25%. 67 lakh companies, about ninety percentfall in this category. Lending target for PradhanMantri Mudra Yojanahas almost been doubled to Rs2,44,000 crores.
Most important area of focus for economic growth is Ease of Doing Business and government has taken lot of initiatives; threshold limit for audit of business entities who opt for presumptive income scheme is increased from ` 1 crore to ` 2 crores. Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs.Time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter.
Incentive to low cost housing will provide houses to the weaker sections of the society and will boast to real state sector; Affordable housing will be given infrastructure status.A change in capital gains tax has been brought to support real estate and rate of interest on EMI has been lowered.Condition of presumptive rent, if housing are kept vacant and not sold, will put pressure for builders to sell flats and increase availability.
Social Security for the poor and left out segments of the society is very crucial and government has done a lot. It has stepped up allocation to Rs1.84 trillion for various schemes for women and children. There is anaction plan to eliminate leprosy by 2018, TB by 2025 and reduce IMR to 29 in 2019. Legislative reforms to simplify and amalgamate existing labour laws are in pipeline to boast labour rights.Allocations to Scheduled Casts, is increased to Rs 52,393 crore.Scheduled Tribes given Rs 31,920 crore and Minority affairs allocated Rs4,195 crore.
All these provisions and announcement clearly points out that the budget is pro poor, pro farmers and rural India and benefits particularly those segments of the society who have been left out from the participation in the growth of the economy over the last several years.
(The writer is National Spokesperson of BJP on Economic Affairs)