Highlights of Jaitley's fiscally prudent Budget 2017

Here are the highlights of Jaitley's budget for the 2017/18 fiscal year that begins on April 1.

FISCAL DEFICIT

* The budget 2017 seeks to pursue prudent fiscal management to preserve financial stability.

*Fiscal deficit at 3.4% 

*Revenue deficit stands reduced to 2.1% in Fy18

GROWTH

* Jaitley says India seen as an engine of global growth

DEMONETISATION

* Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister

* Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetisation not expected to spill over to next year

* Pace of remonetisation has picked up and will soon reach comfortable levels

* Surplus money in the banking system will lower borrowing costs, increase credit flow

INFLATION

*Consumer price index inflation is expected to remain within the central bank's mandated range of 2 to 6%

SPENDING

* India to spend more in rural areas, infrastructure and poverty alleviation

* The government will continue process of economic reforms for the benefit of poor

* Allocation under MNREGA increased to Rs 48,000 cr from Rs 38,500 cr; highest ever allocation

• AGRICULTURE
• Jobs
• Railway
• Tax
• Political Funding
• FINANCE MINISTER COMMENTS

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Jaitley may cut taxes, lack of indirect-tax data may make it tough

Battling slump in demand after shock demonetisation, Finance Minister Arun Jaitley may look to spur consumption through lower taxes in next week's Budget 2017 Date , but he faces a peculiar situation as precise projections of indirect tax collection in 2017-18 are unavailable due to GST.

Finance Ministers usually weave around their welfare spending proposals based on projections of direct and indirect tax collections in the fiscal.

Projections of collection in direct taxes, made up of personal and corporate tax, would be available but with the rollout of Goods and Services Tax (GST) deferred till July 1, no reliable projection of indirect tax collection for 2017-18 fiscal is likely to be available, tax experts said.

The GST is also to subsume state VAT.                                                

And typically the Centre would account for roughly half of the total nationwide GST revenues after excise, service tax and VAT are subsumed and weave around its budget.

But this year is peculiar, experts say. "No reliable projection of the GST revenue is available because the GST Council is yet to decide which product or service will be taxed at what rate. In absence of that one cannot have a reliable projection of GST revenue collection," a tax expert said.

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Budget 2017: Centre may scrap Rs 4,500-cr PDS sugar subsidy

Finance Minister Arun Jaitley might not offer Rs 18.50 per kg subsidy for purchase of sugar to states for selling at a subsidised rate via ration shops in his February 1 Budget 2017 and save about Rs 4,500 crore.

The Centre's contention is that there is no demarcation for BPL families in the new Food Law and there are apprehensions that state governments may divert subsidised sugar, which explains the current line of thinking, sources said.

At present, the scheme has a target of 40 crore beneficiaries of BPL (below poverty line) families. About 2.7 million tonnes of sugar per annum are required for PDS sale.

According to the existing scheme, states purchase sugar to be supplied through the public distribution system (PDS), popularly known as ration shops, from the open market at wholesale rates and sell at a subsidised rate of Rs 13.50 per kg. The states get subsidy at Rs 18.50 per kg from the central government.

According to sources, there are indications from the finance ministry that the existing sugar subsidy scheme could be discontinued from the next fiscal.

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Budget wish list: IT, ITes & e-commerce

Industry size

Approx: $143 bn (IT - ITeS) plus $17 bn (e-commerce)
Employment figure: Approx 3.9 million 
Contribution to GDP: About 9.3% 

Key issues or areas of concern for the sector

Budget 2017 Date| Global political uncertainty due to the recent developments in the US and UK could impact growth for the Indian IT sector as these are one of the largest markets for the Indian IT-ITeS companies. Given that emphasis could be to create jobs in the US could have negative influence on outsourcing of jobs from outside the US, which in turn could have implications on mobility of IT specialists

The new GST law poses multiple challenges for e-commerce firms, especially around compliance and related formalities, with e-commerce platform being liable to collect TCS (tax collected at source) on supply of goods and services by supplier.

Due to significant automation and changes in technology, employees are being re-skilled, and work culture is witnessing a major shift with enhanced focus on digital skills and just-in-time training.

Industry demands
Defer applicability of Place of Effective Management and clarify provisions around claim of foreign tax credit

Definition of Equalisation Levy is ambiguous and clarity is required. There is absence of clarity on availability of credit. Notification has to be issued to clarify that the levy is in nature of tax and eligible for credit.|READ MORE 

Sebi wishlist for Budget 2017: Here are the key points

Ahead of Union Budget 2017, the capital market regulator Securities and Exchange Board of India (Sebi) has sent its list of recommendations to the Finance Ministry. Sebi has asked the government to encourage stock trading and investments in mutual funds by easing tax rules. 

The regulator has also recommended lowering the securities transaction tax (STT) for tax trading and a slew of other measures, a report published in Economics Times said. 

Lower STT for trading 

After its introduction in 2004, STT was fully deductible against the income tax payable. But, after four years, an amendment was made to allow STT as a deductible business expenditure and the rebate under section 88E was also withdrawn. 

Now, Sebi has recommended lowering the STT for tax trading. 

Increase limit for tax-saving equity mutual fund 

For relief under Section 88E, Sebi has recommended an increase in the investment limit for tax-saving equity mutual fund schemes from Rs 1.5 lakh to Rs 2 lakh. 

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Expect an anti-rich Budget 2017; realty buyers should watch out, says Ambit

The Union Budget 2017 this year seems particularly important in the aftermath of the India’s biggest decision of 2016 – demonetisation and preceding elections in UP. A recent report by Ambit capital suggests that Union Budget is likely to be focussed primarily on reinforcing the ‘black money crackdown’ theme with a secondary focus on delivering token payments to the poor as well as income tax cuts.

Even though it was a massive political success, it’s still unclear if the experiment worked for the government in its stated attempt to curb black money or raise the tax base by bringing a larger share of unaccounted income.

According to the report by the brokerage firm, the government is expected to announce an ‘anti-rich’ budget with a secondary focus on: delivering token payments to the poor; and tax cuts for the middle class

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Railways' 'Mission 41K' to save energy worth Rs 41,000 cr

Union Railway Minister Suresh Prabhu today unveiled 'Mission 41K' to save Rs 41,000 crore on the Indian Railways' expenditure on energy consumption over the next 10 years.

This target will be achieved by taking a slew of measures which include moving 90 per cent of traffic to electric traction over diesel. Presently, this is at 50 per cent of the total rail traffic.The ministry plans to achieve this target by doubling the current pace of electrification, Railway Board Chairman A K Mittal said in an official statement.

The railways also aim to procure more and more electricity at cheaper rates through open market instead of sourcing it through DISCOMs and thereby hopes to save as much as 25 per cent on its energy expenses.

In the last Budget  2017 the railways have already set a target of generating 1000 MW of solar power and 200 MW of wind energy. 

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