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Highlights of Union Budget (Relevant for GS Prelims and Mains Paper III)

1. The tax rate for small and medium enterprises with an annual turnover of up to Rs. 50 crore has been slashed to 25%. 

2. Income tax rate from 10% to 5% for those in the lowest tax slab of Rs. 2.5 lakh to Rs. 5 lakh. All other taxpayers have been given a benefit of Rs. 12,500 each.

3. There is a redistributive element to such sops, with part of the revenue loss from these income tax giveaways being funded by a 10% surcharge on the income tax of those in the Rs. 50 lakh to Rs. 1 crore bracket. The existing surcharge of 15% of tax on people earning more than Rs. 1 crore will continue.

4. A bar on cash transactions of more than Rs. 3 lakh and a nudge to businesses to make all payments over Rs. 10,000 digitally.

5. Granting infrastructure status to affordable housing, together with a few changes in the tax treatment to incentivise builders, and the interest subventions already announced for low-ticket home loans, could spur construction activity, and thus job-creation. 

6. Social Sector Contributions
There is higher allocation for MGNREGA, irrigation and infrastructure projects. Rural employment scheme gets highest-ever funding. Finance Minister Arun Jaitley indicated that the funds dispensed would come under increased digital scrutiny. Last year, the Rural Development Ministry had signed an agreement with the National Remote Sensing Centre (NRSC), ISRO, Hyderabad, for geo-tagging assets. This involves the use of ‘Bhuvan’, a web-based application developed by ISRO that gives a three-dimensional map of the globe.

Geo-tagging can help track the location and development status of, say, a pond or a bridge, funded by MGNREGA and located in any of India’s 6 lakh villages. The geo-tagging exercise will allow citizens to report on the state of a project and be made available to village panchayats.

Criticism
The increase is a mere 1%, of Rs.500 crore. At present, 54% of the wage payments continue to be delayed and, as a result, 231 crores in compensation to workers also remains due.

Drinking water scheme
In a bid to ensure safe drinking water to over 28,000 arsenic and fluoride affected habitations in the next four years, the government will start a sub-mission of the National Rural Drinking Water Programme.
In this year’s budget, the allocation for the Rural Development Ministry has also been increased by more than 10 per cent .

7. Promise to confiscate assets of defaulters such as Vijay Mallya who flee the country.

8. In a move to cleanse the system of political funding, government  proposed a Rs. 2,000 ceiling on cash donation by any individual to a party. Political parties could receive donations by cheque or digital mode from donors.

Electoral Bonds
He also indicated that the Reserve Bank of India Act would be amended to facilitate issuance of electoral bonds in line with the scheme that the government would come out.A donor can purchase bonds from authorised banks against cheque and digital payments. They shall be redeemable only in the designated account of a registered political party. The budget also made it mandatory for political parties to file returns within a time limit.

Criticism of reducing donation limit to political parties
Reducing the cash donation limit from any one source to political parties from Rs. 20,000 to Rs. 2,000 is meaningless as long as there is no cap on the number of such people who can make donations anonymously. 

What is the 'electoral bond'?
An instrument that will be used to donate money to political parties. The parties involved will probably be a donor, the political party and the RBI, which acts as the intermediary.

9.  Investment in Raliways
Rashtriya Rail Sanraksha Kosh 
The Rs. 1 lakh crore to be devoted over five years for a safety fund, the Rashtriya Rail Sanraksha Kosh, will have to address the imperatives identified by expert panels such as the Kakodkar Committee. 
The Centre has provided a budgetary support of Rs. 5,000 crore out of the Rs. 20,000 crore earmarked for the fund in 2017-18. The Railways will arrange the balance fund from its own resources, the Finance Minister said. Unmanned level crossings on broad gauge will be eliminated by 2020.

No new trains
Finance Minister refrained from announcing any new railway lines and trains in this budget as he was constrained by the model code of conduct in force for the Assembly elections in Uttar Pradesh, Uttarakhand, Goa, Punjab and Manipur.

Changes in Ticketing Procedure
The Minister talked about offering a “competitive ticket booking facility” to the public.Significantly, service charge on e-tickets booked through the Indian Railway Catering and Tourism Corporation (IRCTC) has been withdrawn. Earlier, the IRCTC used to levy a service charge of Rs. 20 on sleeper class and Rs. 40 on AC class e-tickets. At present, 68% of rail tickets are booked through the IRCTC.
The service charge waiver may hit the Railways’ revenues by Rs. 2 crore a day, senior Railway Ministry officials said. However, the IRCTC will be able to raise money from the market as Mr. Jaitley announced a plan to list the railway PSU on the stock markets. The Indian Railway Finance Corporation and Indian Railway Construction Company (IRCON) too will be listed.

Bio Toilets
For cleanliness, all rail coaches will have bio-toilets by 2019. Plants for environment-friendly disposal of solid waste, along with conversion of biodegradable waste to energy, will be set up at the Jaipur and the New Delhi railway stations, along with five more stations.

What are Bio toilets?
Bio-Digester is a decomposition mechanized toilet system which decomposes Human Excretory Waste in the digester tank using specific high graded bacteria further converting it into methane and water, discharged further to the desired surface.

10. Apart from the merger of the railway budget with general budget, the government abolished the distinction between Plan and Non-Plan expenditure.

11. Infrastructure gets a major boost
Presented as part of 10-point package to drive the government’s agenda to ‘transform, energise and clean India’, the 2017-18 Budget gives a major push to the infrastructure sector. This sector will see a major rise in allocation from Rs. 3.4 lakh crore to Rs. 3.9 crore (BE). Transport (including rail,roads and shipping) accounts for a bulk of the expenditure at Rs. 2.4 lakh crore.

12. BHARAT Net Project
About Rs. 10,000 crore has been allocated to the BharatNet Project, which aims to provide high speed broadband connectivity via optical fibre to more than 1.5 lakh gram panchayats by the end of 2017-18. The stated aim is to offer “wi-fi hotspots and access to digital services at low tariffs.



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