SSB General Awareness: Union Budget 2017 Analysis - Part 2

In the part one of this series we saw what the budget actually means and how and what it provided for the country in the next fiscal year. We analysed the proposal for agriculture, youth and health sector. Lets move ahead and see whats more in this for the citizens.

Click here for : SSB  General Awareness: Union Budget 2017 Analysis - Part 1
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Fiscal situation

• Total expenditure is Rs. 21, 47,000 crore.
• Plan, non-plan expenditure to be abolished; focus will be on capital expenditure, which will be 25.4 %.
• Rs. 3,000 crore under the Department of Economic Affairs for implementing the Budget announcements.
• Expenditure for science and technology is Rs. 37,435 crore.
• Total resources transferred to States and Union Territories is Rs 4.11 lakh crore.
• Recommended 3% fiscal deficit for three years with a deviation of 0.5% of the GDP.
• Revenue deficit is 1.9 %
• Fiscal deficit of 2017-18 pegged at 3.2% of the GDP. Will remain committed to achieving 3% in the next year.

Funding of political parties

• The maximum amount of cash donation for a political party will be Rs. 2,000 from any one source.
• Political parties will be entitled to receive donations by cheque or digital mode from donors.
• An amendment is being proposed to the RBI Act to enable issuance of electoral bonds .A donor can purchase these bonds from banks or post offices through cheque or digital transactions. They can be redeemed only by registered political parties.

Defence sector

·         The defence sector gets an allocation of Rs. 2.74,114 crore.

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Tax proposals

• India’s tax to GDP ratio is not favourable.
• Out of 13.14 lakh registered companies, only 5.97 lakh firms have filed returns for 2016-17.
• Proportion of direct tax to indirect tax is not optimal.
• Individuals numbering 1.95 crore showed an income between Rs. 2.5 lakh to Rs. 5 lakh.
• Out of 76 lakh individual assesses declaring income more than Rs. 5 lakh, 56 lakh are salaried.
• Only 1.72 lakh people showed income of more than Rs. 50 lakh a year.
• Between November 8 to December 30, deposits ranging from Rs. 2 lakh and Rs. 80 lakh were made in 1.09 crore accounts.
• Net tax revenue of 2013-14 was Rs. 11.38 lakh crore.
• Out of 76 lakh individual assesses declaring income more than Rs 5 lakh, 56 lakh are salaried.
• 1.95 crore individuals showed income between Rs. 2.5 lakh to Rs. 5 lakh.
• Rate of growth of advance tax in Personal I-T is 34.8% in the last three quarters of this financial year.
• Holding period for long term capital gain lowered to two years
• Proposal to have a carry-forward of MAT for 15 years.
• Capital gains tax to be exempted for persons holding land from which land was pooled for creation of the state capital of Andhra Pradesh.
• Under the corporate tax, in order to make MSME companies more viable, there is a proposal to reduce tax for small companies with a turnover of up to Rs 50 crore to 25%. About 67 lakh companies fall in this category. 96 % of companies to get this benefit.
• The government proposes to reduce basic customs duty for LNG to 2.5% from 5%.
• The Income Tax Act to be amended to ensure that no transaction above Rs 3 lakh is permitted in cash.
• The limit of cash donation by charitable trusts is reduced to Rs 2,000 from Rs 10,000.
• Net revenue loss in direct tax could be Rs. 20,000 crore.

Personal income tax

• Existing rate of tax for individuals between Rs.  2.5- Rs 5 lakh is reduced to 5% from 10%.
• All other categories of tax payers in subsequent brackets will get a benefit of Rs 12,500.
• Simple one page return for people with an annual income of Rs. 5 lakh other than business income.
• People filing I-T returns for the first time will not come under any government scrutiny.
• Ten % surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore losses due to cut in personal I-T rate. 15 surcharge on individual income above Rs. 1 crore to remain.

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Above mentioned are the key highlights of this year budget. The key focus of the Union budget presented on Wednesday is on poor, downtrodden, marginalized, scheduled castes (SC) and scheduled tribes (ST) which re-enforces the commitment of the National Democratic Alliance (NDA) under Prime Minister Narendra Modi that the government will work for the upliftment of the poor. The budget aims at bringing them out of poverty with a clear focus on villages and rural infrastructure. The people living in the eastern parts of the country, especially in states such as Bihar, Uttar Pradesh, Assam, West Bengal and Odisha, will benefit the most from this budget.

About the Author: Tanmoy is from West Bengal currently doing private job in Manesar, Haryana. He did his Graduation in B.E. Production Engineering from PEC University of Technology, Chandigarh. His aim is to become an officer in Indian Army. His hobbies are gym and teaching and he wants to help the aspirants across the nation through this.