Jaitley presents "futuristic" Budget

Union Finance Minister Arun Jaitley outlined India's budget for the advancing fiscal in a presentation to the Parliament yesterday. Following the major Demonetisation move launched by Prime Minister Narendra Modi, the annual budget for the year 2017-18 was much awaited. The Finance Ministry was expected to deliver several surprising packages and a big bang. However, the financial plan was rather mellow with a much needed relief for small tax payers and the salaried class.

Taxes have been halved to 5 per cent for those with income between 2.5 lakhs and 5 lakhs. Small and medium scale industry got a drop of 5 per cent on their tax rate, which, Jaitley said, would benefit 96 per cent businesses. The budget put emphasis on black money, with the FM hoping that the lowering of taxes will incite more disclosures and promised no scrutiny for first-time tax payers. Digital transaction were encouraged as for all income through online transaction under this scheme , presumptive profit would be of about 6 per cent and not 8 per cent, as otherwise. Long term capital gains tax was also changed for housing, with the holding period of property being reduced from 3 to 2 years, and the base year for indexing being moved to 2001 from 1980. Cash transactions above 3 lakhs have also been banned as part of the move against black money.

However, he did not address the issue of endless deductions that businesses, from single owners to larger corporates, show as expenses, from buying cars every three years to avail of depreciation, to travel and other business-related spends. Meanwhile, the emphasis on roads, railways, ports, and airports will lead to direct job creation and, post the completion of infrastructure projects, will drive more businesses. Both, rural and urban affordable housing are also getting a big boost. Also worth nothing is the timetable to eliminate many diseases that still affect many Indians, especially the poor.

In the biggest macro step, the government accepted that it needs to keep its debt in check and keep the fiscal deficit on target. So, while Jaitley did bring the fiscal deficit down to 3 per cent, he is promising a fiscal deficit of 3.2 per cent in 2017-18, the same number as the revised estimate for this, and 3 per cent of the following year.

Calling the Union Budget "futuristic", Modi said it will bring in a new beginning to fulfil the dreams of every section. "This is a Budget for the future- for farmers, underprivileged, transparency, urban rejuvenation, rural development and enterprise." He said it was a key link between the word done by his government and the steps to be taken in future. He praised Jaitley for a "good" Budget, which, he said, will speed up the development of the country, create new employment opportunities, double farmers' income.