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

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Union Budget of India: Information & 2016-17 Highlights

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 ₹ 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
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: ₹ 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 ₹ 5.03 lakh.
  • Deposits of more than 80 lakh were made in 1.48 lakh accounts with average deposit size of ₹ 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 limit: municipal limits of 4 metropolitan cities
  • 60 : For the rest of India & peripheral areas of metros
  • No transaction above ₹ 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: ₹ 2000/- from one person, can receive cheque & digital payments
  • Threshold limit for audit of business entities who opt for presumptive income scheme ↑ from ₹ 1 crore to ₹ 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 ₹ 2.5 lakhs to 5 lakhs ↓ to 5 % from 10 %
  • Surcharge of 10 % of tax: Annual taxable income is between ₹ 50 lakhs and ₹ 1 crore
  • Simple one-page form to be filed as Income Tax Return for the category of individuals with taxable income upto ₹ 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.

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