MUMBAI (Commoditiescontrol) – The 2017-18 Budget presented by finance minister Arun Jaitley is neither grandiose nor naïve but is sharply focused on wooing farmers and urban salaried keeping in view the upcoming assembly elections and carry its memories into the general elections of 2019.
The minister, in his third budget speech, clearly said “We shall continue to undertake many more measures to ensure that the fruits of growth reach the farmers, the workers, the poor, the scheduled castes and scheduled tribes, women and other vulnerable sections of our society”.
Deciphering the budget papers and the numbers in it, it is apparently that the budget is void of any new scheme or plan, but only an extension of current projects and plans with some twists and turns. The results will lie only in their implementation.
The three major reforms mentioned including advancement of budget to 1st February, merger of the Railways Budget with the General Budget and doing away with the plan and non-plan classification of expenditure will see marginal changes in the functioning of the government. The first one will of course enable the ministries and departments to operationalise all schemes and projects right from the commencement of the financial year, the second one was much overdue. The third one plan and non-plan classification is, however, replaced by Scheme Expenditure and Expenditure on Other than Schemes.
Agriculture Min Allocation hiked to Rs42,000 cr
The budget has ensured adequate credit available to farmers in time. The target for agricultural credit in 2017-18 has been fixed at a record level of Rs10 lakh crores. Special efforts will ensure credit flow to the under serviced areas, the Eastern States and Jammu & Kashmir. The farmers will also benefit from 60 days’ interest waiver announced by Prime Minister in respect of their loans from the cooperative credit structure.
The Fasal Bima Yojana coverage will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. A provision of Rs5,500 crores budgeted for this Yojana in 2016-17 was increased to Rs13,240 crores to settle the arrear claims. For 2017-18, a sum of Rs9,000 crores has been allocated.
To enable farmers to get better prices for their produce in the post-harvest phase, the coverage of National Agricultural Market (e-NAM) will be expanded from the current 250 markets to 585 APMCs. Assistance up to a ceiling of Rs75 lakhs will be provided to every e-NAM market for establishment of cleaning, grading and packaging facilities.
The budget proposes to integrate farmers growing fruits and vegetables with agro processing units for better price realisation and reduction of post-harvest losses. A model law on contract farming would be prepared and circulated among the States for adoption.
Rural Development Dept Gets Rs10,000 cr hike
For rural sector, conscious effort has been made to reorient MGNREGA to support doubling of farmers’ income. Apart from providing 100 days employment to every rural household, MGNREGA has been used to create productive assets to improve farm productivity. A target of 5 lakh farm ponds and 10 lakh compost pits was set in the 2016-17 Budget from MGNREGA funds. As against this, it is expected that about 10 lakh farm ponds would be completed by March 2017. In 2017-18, another 5 lakh farm ponds will be taken up. Thus, the budget provision of Rs38,500 crores under MGNREGA in 2016-17 has been raised to Rs48,000 crores in 2017-18.
Under Pradhan Mantri Gram Sadak Yojana, construction of roads was accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014. For 2017-18, a sum of Rs19,000 crores in 2017-18 for this scheme. Together with the contribution of States, an amount of Rs27,000 crores will be spent on PMGSY in 2017-18.
For rural housing, the budget proposes to complete 1 crore houses by 2019 for the houseless and those living in kutcha houses. Allocation has been stepped up for Pradhan Mantri Awaas Yojana – Gramin from Rs15,000 crores in BE 2016-17 to Rs23,000 crores in 2017-18.
For the welfare of women and children under various schemes across ministries, the allocation has been raised from Rs156,528 crores in BE 2016-17 to Rs184,632 crores in 2017-18.
For Salaried Class
The budget has proposed to reduce the existing rate of taxation for individual assesses between income of Rs2.5 lakhs to Rs5 lakhs to 5% from the present rate of 10%. Thus, the tax liability would reduce of all persons below Rs5 lakh income either to zero (with rebate) or 50% of their existing liability. In order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs2500 available only to assessees up to income of Rs3.5 lakhs. The combined effect of both these measures will mean that there would be zero tax liability for people getting income up to Rs3 lakhs p.a. and the tax liability will only be Rs2,500 for people with income between Rs3 and Rs3.5 lakhs. If the limit of Rs1.5 lakh under Section 80C for investment is used fully the tax would be zero for people with income of Rs4.5 lakhs. All the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs12,500.
The above mentioned proposals will directly benefit both rural and urban population by way of increase in purchasing power or increase in economic opportunities and safety net against adverse climatic condition for farmers.
Nevertheless, there are few worth mentioning development moves made in the budget like;
> Giving infrastructure status for affordable housing,
> Changes in the capital gain taxation provisions in respect of land and building where holding period for considering gain from immovable property has been reduced to 2 years from 3 years now,
> Reduction in income tax rate for smaller companies with annual turnover up to Rs50 crore to from 30% to 25%.
(By Commoditiescontrol Bureau; +91-22-40015522)
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