Union budget emphasises “ease of doing business”
The 2017 Union Budget, presented by Finance Minister Arun Jaitley today, focussed on creating basic infrastructure and transformation reformation in the country and easing of doing business with the objective to transform, energise and clean India.
According to the FM, demonetisation is expected to have a transient impact on the economy, and felt that demonetisation was a bold and decisive measure that will lead to higher GDP growth and the effects will not spillover to the next fiscal.
Aiming to make it easier to do business in India, FM promised to simplify labour laws, abolish Foreign Investment Promotion Board (FIPB) and reduced tax rates for the small firms that make up 96% of the Indian companies. Jaitley announced legislative reforms to simplify, rationalize and amalgamate existing labour laws into four codes—wages, social security and welfare, industrial relations and safety and working conditions. Arun Jaitley announced a reduction in the tax rate in the income tax slab of Rs 2.5 lakh to Rs 5 lakh to 5% from 10%. The FM also announced a reduction in tax rates for small and medium sized companies as part of an earlier promise to gradually reduce these corporate tax rates and phasing out of exemptions given to companies. The tax rate for companies with an annual turnover of upto Rs 50 crore has been brought down to 25% from 30%. The FM also announced a surcharge of 10% on those individuals earning an income between Rs 50 lakh to Rs 1 crore while retaining the surcharge on those earning an income above Rs 1 crore.
One important step the FM announced was that the Government will grant autonomy to higher education institutions based on performance shows that the government has its priorities set right. Government will introduce a system of measuring annual learning outcomes and come out with an innovation fund for secondary education, the focus being on 3,479 educationally-backward blocks and the Government plans to identify the colleges based on accreditation. Other key steps being launching of Skill India mission to focus on advanced skills development and preparing a global workforce through setting up 100 India International centres across the country. Another new initiative in higher education, announced by Mr. Jaitley, is setting of National Testing Agency which will handle all the entrance exams in higher education. Moreover setting up of Digi Gaon will open new vistas for technology based education for our rural folk.
The thrust on Infrastructure and railways was spelt out in the Union budget. The total allocation of Rs. 39,61,354 crore has been made for infrastructure.Total allocation for Railways is Rs. 1,31,000 crore.No service charge on tickets booked through IRCTC. Raksha coach with a corpus of Rs. 1 lakh crore for five years (for passenger safety). Unmanned level crossings will be eliminated by 2020. 3,500 km of railway lines to be commissioned this year up from 2,800 km last year. By 2019 all trains will have bio-toilets. Five-hundred stations will be made differently-abled friendly. Railways will partner with logistics players for front-end and back-end solutions for select commodities. Railways will offer competitive ticket booking facility. Rs. 64,000 crore allocated for highways. High speed Internet to be allocated to 1,50,000 gram panchayats. New Metro rail policy will be announced with new modes of financing.
A significant reform initiative in the budgeting process, announced by the Finance Minister, in his Budget Speech was the removal of the Plan and Non-Plan distinction in expenditure budgeting. This has been implemented from the Budget of 2017-18. With the removal of this distinction it is expected that the link between spending and outcomes will improve and become more holistic and focused.