Budget 2017 - How it will shape India's economy - Comment
Budget 2017 has centered its attention on improving domestic growth through investments in agriculture, rural development and infrastructure while letting the fiscal discipline and efficient tax administration intact. It shows a clear focus towards upraising the poor and the under-privileged.
Some of its highlights that would aid in shaping India's economy are:
Farmers - Around 1.2 billion people of India are engaged in agriculture. This category is likely to be benefitted the most by the Budget proposal. Agricultural credit target in 2017-18 fixed at a record level of 10 lakh crores.
- Benefit from 60 days interest waiver
- New mini labs in Krishi Vigyan Kendras (KVKs) and ensure 100% coverage of all 648 KVKs in the country for soil sample testing
- Coverage of National Agricultural Market (e-NAM) to be expanded to 585 APMCs. Assistance up to 75 lakhs will be provided to every e-NAM
Hence, with a lot of encouragement and assistance provided to farmers, the agricultural sector would flourish tremendously.
Rural Population - The rural population of India comprises of about 68.84%.
- 3 lakh crores per year allotted for rural poor from Central Budget and State Budget
- MGNREGA allocation to be the highest ever at 48,000 crores
- Achieving 100% village electrification by 1st May 2018
- Pace of construction of PMGSY roads accelerated to 133 km roads per day in 2016-17, against an avg. of 73 km during 2011-2014
Thus, there would be a significant increase in the quality level of the lives of rural poor.
Youth - In India, about 366 million people lie in the age group of 10-24 years. They are the ones who would shape the future of the country.
- Introduction of a system for measuring annual learning outcomes in schools
- National Testing Agency to be set-up as an autonomous and self-sustained premier testing organization to conduct all entrance examinations for higher education institutions
- Next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) to be launched in 2017-18 at a cost of 2,200 crores
- Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) to provide market relevant training to 3.5 crore youth
Such measures would lead to more talent acquisition by the youth, leading to smart and efficient adults.
Infrastructure - The development of infrastructure plays a crucial role in the overall growth of the nation.
- Metro Rail Act to be enacted by facilitate greater private participation and investment in construction and operation
- A new and restructured Central scheme with a focus on export infrastructure - Trade Infrastructure for Export Scheme (TIES) to be launched
- High speed broadband connectivity on optical fiber to be available in more than 1,50,000 gram panchayats, under BharatNet
- To make India a global hub for electronics manufacturing, a provision of 745 crores is made in incentive schemes like M-SIPS and EDF
Budget 2017 gives a big leg up to the infrastructure industry.
Digital Economy - It is the single most important driver of innovation, competitiveness and growth.
- A Mission will be set up with a target of 2,500 crore digital transactions through UPI, USSD, Aadhar Pay, IMPS and debit cards
- Banks have targeted to introduce additional 10 lakh new POS terminals by March 2017. They will be encouraged to introduce 20 lakh Aadhar based POS by September 2017
- Proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems
Thus, such a system would ensure transparency leading to reduced corruption.
Real Estate Sector - Budget 2017 will be remonetizing realty.
- Under the scheme for profit-linked income tax deduction for promotion of affordable housing, carpet area instead of built up area of 30 and 60 Sq.mtr. will be counted.
- Reduction in the holding period for computing long term capital gains from transfer of immovable property from 3 years to 2 years.
Thus the real estate sector would no longer be stagnant and would see significant rise enabling higher liquidity.
Tax Administration - The government is taking several measures to render quality taxpayer service, encourage voluntary compliance of tax laws and penalize non-compliance.
- Appeal to all citizens of India to contribute to Nation Building by making a small payment of 5% tax if their income is falling in the lowest slab of 2.5 lakhs to 5 lakhs
- Simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income up to 5 lakhs other than business income
- The extensive reach-out efforts to trade and industry for GST will start from 1st April, 2017 to make them aware of the new taxation system
Tax administration will now move from a discretionary one to a policy based one.
Overall, the proposed budget would induce high growth on proper and efficient execution.
- Neha P Asrani