Wednesday, 1 February 2017

Why Union Budget 2017 is Important?

This seems to be a game-changing budget 2017 fortunately not populist as had been expected just before some major state elections due shortly. Neither is this a pro-rich budget as the opposition had predicted in the event of it not being pro-poor. For the first time, the railway budget has been clubbed with the general budget.

Some of the Key Takeaways:
·         MNREGA scheme gets 48K crore, participation of women 55%
·         SC/ST schemes get over 50K crore in allotments - populist no doubt!
·         Tax cut for MSMEs with turnover up to 50cr.
·         Incomes in the range 2.5L-5L get IT relief
·         Digital transactions get a big thumbs up
·         Railway to focus on safety, improvement of basic amenities, 7000 stations go solar, 500 stations to get lifts and escalators, bio-toilets, 3500 km of new tracks laid by 2020
·         Most welcome move of all is that there is a push for more transparency in political funding with a cap of 2K as the maximum allowed per donation and a nudge towards cashless transactions even here - finally, the government has decided to walk the talk

This is being referred to as clean-up budget:
·         Clean-up of the way politics shall be played in the country henceforth - cleaner funding, cleaner campaigning
·         Each political party will have a bank account and donors would draw bonds of amount to donate which the party would deposit and encash. Just not too sure about the “anonymity” of donations. Hopefully, legitimate cash enters this system and is traceable back to the donor
·         Clean-up of taxes
·         Cashless push - digitization
·         High on investment push
·         Creation of jobs by easing taxation in micro, small and medium enterprises
·         Mollifying rural poor
·         Tax benefits for the agricultural sector
Allocations in major sections:
Defence: 2.74L crore
Transport: 2.4L crore
Agriculture/Rural: 1.87L crore
Women welfare: 1.84L crore
Railways: 1.3L crore (with a promise to improve safety by 2020)

MNREGA: 48K crore

Truth be told, the statistics in Budget 2017 quoted by the FM about people not being as poor as the tax collections show, seriously throws light in the fact that more people have been evading paying taxes than the other way around. Businesses need to shape up and this clean-up shall be good for all of us in the long run.

                               ----Bhuvi Jain


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