Union Budget of India: Information & 2016 − 17 Highlights YouTube Lecture Handouts

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Union Budget of India

Highlights 2016-17

Key Aspects

  • Annual Financial Statement – Article 112

  • 1st Budget by RK Shanukham Chetty in 1947

  • Morarji Desai – Maximum Budget (10)

  • Only women Finance Minister – Indira Gandhi

  • Printing of Budget – 1 Week Before – Complete Isolation – North Block

  • 1973-74: Black Budget – Deficit Rs. 550 Crore

  • 1997-98: Dream Budget – Economic Reforms

  • Starting 2017: Presented on 1st Feb

  • Merger of Union & Rail Budget

  • Removal of plan & non-plan expenditure for holistic allocations

Kautilya’S Arthashastra

  • Estimate the Revenue

  • Revenue = Receipts for Current year + Delayed Payment due in Earlier Years – (Expenditure + Exemptions + Postponement of Payments)

  • Norman Period → Treasury + Exchequer

  • Budget from “Bougette” French Word for Leather Bag

India – Budget by Finance Minister

  • Estimates of expenditures (Plan & Non-Plan) and revenues (Capital & Current)

  • First estimate of deficit (Shortfall in revenue)

  • Narrowing of deficit

  • Presentation and approval of budget

Plan & Non – Plan Expenditure

Plan Expense

  • Major Proportion

  • Grants to Various Ministers

Non Plan Expense

  • Interest payments

  • Subsidies

  • Wage and salary payments

  • Grants to States and UTs

  • Pensions, police, economic services

  • Tax collection, social services

  • Grants to foreign governments

  • Defense

Capital & Current Receipts

Capital receipts

  • Repayment of loans given by the government

  • Receipts from divestment of public-sector equity and borrowings—both domestic and external

Current receipts

  • Tax revenues

  • Receipts by way of dividends from public-sector units

  • Interest payments on loans given out by the central government

Image of Budget Of Government Receipts

Image of Budget of Government Receipts

Image of Budget Of Government Receipts

Important Articles

  • Article 114: Government can withdraw money from Consolidated Fund of India only on approval from Parliament & get the Appropriation Bills approved by Parliament. This authorizes the executive to spend money.

  • Article 265: Prohibits the government from collecting any taxes without the authority of law. Finance Bill is released & it may levy new taxes, modify or continue the existing tax structure beyond the period approved by Parliament earlier.

Important Documents

  • Macro-Economic Framework Statement: Enjoined by the Fiscal Responsibility and Budget Management Act, 2003 (FRBM Act), contains an assessment of the growth prospects of the economy with specific underlying assumptions.

  • Medium Term Fiscal Policy Statement: Enjoined by the FRBM Act sets forth a three year rolling target for specific fiscal indicators along with underlying assumptions..

  • Fiscal Policy Strategy Statement: Enjoined by the FRBM Act, contains the policies of the Central Government for the ensuing financial year relating to taxation, expenditure, lending and investments, administered pricing, borrowings and guarantees.

2016-17 Highlights

  • Current Account Deficit declined from 1% last year to 0.3% of GDP in the first half of 2016-17

  • FDI ↑ by 36%

  • Foreign Exchange Reserves at 361 Billion US $

  • War against black money

  • Fiscal Consolidation

  • Uncertainty for crude oil

  • Retreat from globalization – Focus on protectionism

  • Constitutional Amendment Bill for GST

  • Demonetization of high currency notes

  • Enactment of the Insolvency and Bankruptcy Code

  • Enactment of the Aadhar bill for subsidies & benefits

  • Farmers: Double the income in 5 years

  • Rural Population: Employment & basic infrastructure

  • Youth: Education, skills and jobs

  • Poor and the Underprivileged: Social security, health care and affordable housing

  • Infrastructure: Efficiency, productivity and quality of life

  • Financial Sector : Growth & stability by stronger institutions

  • Digital Economy : Speed, accountability and transparency

  • Public Service : Effective governance and efficient service delivery through people’s participation

  • Prudent Fiscal Management: Deployment of resources and preserve fiscal stability

  • Tax Administration: Honoring the honest

  • Demonetization: Liquidity in banking system will ↓ borrowing costs & ↑ access to credit

  • Integrate Agri. Credit Society with Core Banking

  • 1 crore households out of poverty by 2019

  • Make 50,000 Gram Panchayats poverty free by 2019

  • 100% village electrification by 2018

  • National Rural Drinking Water Program (NRDWP): Safe drinking water to over 28,000 arsenic and fluoride affected areas in next 4 year

  • Annual learning outcome in schools

  • SWAYAM platform – 350 online courses

  • National Testing Agency: Autonomous and self-sustained premier testing organization to conduct all entrance examinations for higher education institutions

  • Skill Acquisition and Knowledge Awareness for Livelihood Promotion program (SANKALP) to be launched

  • Eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018, Measles by 2020 and Tuberculosis by 2025

  • Reduce IMR from 39 in 2014 to 28 by 2019 and MMR from 167 in 2011-13 to 100 by 2018-2020

  • 2 new AIIMS – Jharkhand & Gujarat

  • Amend drugs & cosmetic rules

  • Aadhar based smart cards for senior citizens

  • For passenger safety, Rashtriya Rail Sanraksha Kosh: Rs. 1 lakh crores over 5 years

  • Unmanned level crossings on Broad Gauge lines will be eliminated by 2020

  • ‘Coach Mitra’, a single window interface, to register all coach related complaints

  • 500 stations with lift & escalator

  • All coaches with bio-toilets – by 2019

  • New Metro Rail Policy – Innovative & indigenous

  • By 2017-18: high speed broadband connectivity on optical fibre will be available in more than 1, 50,000 gram panchayats, under BharatNet

  • DigiGaon initiative: Tele-medicine, education and skills through digital technology

  • Establish strategic oil reserves at Chandikhole in Odisha and Bikaner in Rajasthan

  • Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18

  • Abolish Foreign Investment Promotion Board in 2017-18

  • Establish Computer Emergency Response Team for our Financial Sector (CERT-Fin)

  • Launch New ETF with diversified CPSE stocks and other Government holdings in 2017-18

  • BHIM app - Referral Bonus Scheme for individuals & Cashback Scheme for merchants

  • Aadhar Pay: Merchant version of Aadhar Enabled Payment System to be launched

  • 10 lakh new POS terminals by March 2017

  • Payments Regulatory Board in RBI by replacing existing Board for Regulation and Supervision of Payment and Settlement Systems

  • Government e-market place: Functional for procurement of goods and services

  • To utilize the Head Post Offices as front offices for rendering passport services

  • Centralized Defense Travel System developed - travel tickets can be booked online by soldiers and officers

  • Web based interactive Pension Disbursement System for Defense Pensioners to be established

  • Demonetization: Deposits between 2 to 80 lakh Rupees were made in about 1.09 crore accounts with an average deposit size of Rs. 5.03 lakh.

  • Deposits of more than 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs. 3.31 crores.

  • Profit-linked income tax deduction for promotion of affordable housing: Carpet area instead of built up area of 30 and 60 Sq. Mtr. will be counted

  • 30 m2 limit: municipal limits of 4 metropolitan cities

  • 60 m2: For the rest of India & peripheral areas of metros

  • No transaction above Rs. 3 lakh would be permitted in cash subject to certain exceptions

  • Miniaturized POS card reader for m-POS, micro ATM standards version 1.5.1, Finger Print Readers / Scanners and Iris Scanners manufacture to be exempt from BCD, Excise/CV duty and SAD

  • Maximum amount of cash donation, a political party can receive: Rs. 2000/- from one person, can receive cheque & digital payments

  • Threshold limit for audit of business entities who opt for presumptive income scheme ↑ from Rs. 1 crore to Rs. 2 crores.

  • Threshold for maintenance of books for individuals and HUF ↑ from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs

  • Existing rate of taxation for individual assesses between income of Rs. 2.5 lakhs to 5 lakhs ↓ to 5% from 10%

  • Surcharge of 10% of tax: Annual taxable income is between Rs. 50 lakhs and Rs. 1 crore

  • Simple one-page form to be filed as Income Tax Return for the category of individuals with taxable income upto Rs. 5 lakhs other than business income

  • Appeal to all citizens of India to contribute to Nation Building by making a small payment of 5% tax if their income is falling in the lowest slab of 2.5 lakhs to 5 lakhs.

  • RAPID (Revenue, Accountability, Probity, Information and Digitisation) - Maximize efforts for e-assessment in the coming year

  • Enforcing greater accountability of officers of Tax Department for specific act of commission and omission