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Old 1st February 2017, 12:58   #1
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Default The 2017 Union Budget!

Dear Fellow Bhpians,

Since, i was able to see the entire budget speech of the Honorable FM, i am presenting snippets herewith for the benefit of our members:

1. World GDP as per IMF to be at 3.4%
2. Agricultural growth expected at 4.6%
3. MNREGA allocation increased to Rs 48000 cr from Rs 38,500 crore
4. Total allocation for rural and other agriculture sector is Rs 1,87,223 crore
5. For poor population 1 crore houses to be built by 2019
6. 2 new AIIMS to be started in the states of JH and GJ respectively
7. New Railway Lines measuring to 3500 kms to be laid
8. IRCTC e-ticket booking charges waived
9. For the safety of railways and its passengers, a safety fund of Rs 1,00,000 core to be created for a period of over 5 years
10. With the focus on Metro Rail, new metro rail policy to be formulated
11. FIPB-The board which was acting as Single Window clearance for FDIs in the country stands abolished, giving a fillip to investments in the country
12. Government will bring a new law for confiscating the assets of offenders who have escaped from the country
13. Ambitious fiscal deficit target set at 3.2%
14. Big news for small companies having a turnover of Rs 50 crore annually will need to pay only 25% of income tax as against the prevailing rate of 30%
15. No cash transaction above Rs 3 lakh
16. Political funding reduced to Rs 2000 per head
17. Electoral bonds for political parties
18. ZERO Tax upto Rs 3 lakh per annum
19. Tax on income upto Rs 5 lakh cut by 5%
20. Additional surcharge of 10% on income above Rs 50 lakh to Rs 1 crore
21. Public Sector Oil companies may be consolidated
22. Public Sector Enterprises will be listed and divested
23. AAI Act to be amended to unlock the value of assets held and the fund so raised shall be utilized for improving the infrastructure of airports.
24. Public Sector Banks will get Rs 10000 crore for capitalization.

The budget is a holistic approach addressing the various issues of the country and the impetus has been provided to the rural sector and targeting youth of the country.

Last edited by Rehaan : 2nd February 2017 at 12:17. Reason: Adding some line spaces :)
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Old 1st February 2017, 13:11   #2
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Default re: The 2017 Union Budget!

Some interesting facts:
- The no. of individuals filing IT returns is 1.74 crore.
- No of individuals declaring incomes above 5 lakhs - 76 lakhs.
- Only 1.72 lakh people showed income of more than Rs. 50 lakhs a year.

Defence allocation raised by 10% to 274000 crores, excluding pensions. (249000 crores for 2016-17)

Last edited by deerhunter : 1st February 2017 at 13:13.
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Old 1st February 2017, 14:00   #3
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Default re: The 2017 Union Budget!

its a mediocre budget, the salaried class again gets the stick, direct taxes are still at the same rates except 3-5 lac bracket. previous government used to give 50k relief in nil tax slab during every budget, they followed the trend, nothing great.

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Old 1st February 2017, 14:24   #4
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Default re: The 2017 Union Budget!

We talk about how many people pay income tax, do we know what is the total amount collected in income taxes ?

I am assuming this sum to be very less and the infrastructure around these (they have bigger buildings specifically for large tax payers) to be wasteful.
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Old 1st February 2017, 14:48   #5
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Default re: The 2017 Union Budget!

Quote:
Originally Posted by srishiva View Post
We talk about how many people pay income tax, do we know what is the total amount collected in income taxes ?

I am assuming this sum to be very less and the infrastructure around these (they have bigger buildings specifically for large tax payers) to be wasteful.
Total income tax collection estimated for the year 2016-17 is Rs. 353173 crores. The actual collection maybe a little less.

Corporate tax estimate for 2016-17 is Rs. 493923 crores.

Link

Last edited by deerhunter : 1st February 2017 at 14:50.
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Old 1st February 2017, 15:05   #6
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Default re: The 2017 Union Budget!

GAAR is not deferred and will be effective April 2017.

Which effectively means, end of Corporate car lease benefits for salaried employees! This is a big bummer for the auto industry i feel.
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Old 1st February 2017, 15:08   #7
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Default re: The 2017 Union Budget!

Quote:
Originally Posted by deerhunter View Post
Some interesting facts:
- The no. of individuals filing IT returns is 1.74 crore.
- No of individuals declaring incomes above 5 lakhs - 76 lakhs.
- Only 1.72 lakh people showed income of more than Rs. 50 lakhs a year.

Defence allocation raised by 10% to 274000 crores, excluding pensions. (249000 crores for 2016-17)
And out of these 76 lakhs with income above 5 lakhs (and paying taxes), 56 lakhs are salaried class with TDS!!
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Old 1st February 2017, 17:17   #8
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Default re: The 2017 Union Budget!

I stopped reading anything about the budget many years ago; there is very little degree of freedom for any government to do anything but tinker around the fringes, given the fixed expenses/things it can't do anything about in the budget itself - the salary bill, be it for bureaucrats, security forces of all kinds, and other government employees as one example of a big item. The other givens are interest payments and rural subsidies.

What needs to be done and usually isn't, in terms of enhanced governance is done/can be done outside the budget, in terms of reform measures and other policy actions in that direction.
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Old 1st February 2017, 17:34   #9
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Default re: The 2017 Union Budget!

Quote:
Originally Posted by DCEite View Post
GAAR is not deferred and will be effective April 2017.

Which effectively means, end of Corporate car lease benefits for salaried employees! This is a big bummer for the auto industry i feel.
Interesting, but difficult for the govt to implement. Car lease policy is omnipresent in Indian corporate circles and falls under tax planning umbrella, rather than tax avoidance, although the line is thin.
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Old 1st February 2017, 20:59   #10
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Default re: The 2017 Union Budget!

Budget - No Game Changer.

Stock Market is happy that nothing has been tinkered on STT or LTCG. Lot of fear garnered before the Budget.

Disappointment on Personal Income Tax Rates. BJP, while in opposition has been protesting for the last 10 years, to increase the IT Limit to 5 lakhs. This year was a good opportunity, but wasted.

Nothing in Service Tax. ST will be increased to 18% in July, to match with GST.

Nothing much in Excise and Customs. Slight boost to Real Estate transactions as LTCG has been tweaked.

Automobile - No changes. The real change we can expect once GST will be implemented.
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Old 2nd February 2017, 06:20   #11
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Default re: The 2017 Union Budget!

Quote:
Originally Posted by Sawyer View Post
I stopped reading anything about...and other policy actions in that direction.
Share your same feelings here; in addition, I stopped reading the newspaper & stopped wasting my time as well; all these negative news somehow find their way to reach our ears without newspapers. If one gets down to streets, we'll get to know the reality than the falsified truths in the news.

If at all there're any benefits, there will be some other loophole to close that; remember, few years ago there was an outcry towards VAT. Many believed the VAT will help to pay lesser tax, but now I find that the VAT is more beneficial for the govt to collect more money from people but at the end of the chain, we're paying just too much money than what it used to be.

Last edited by aargee : 2nd February 2017 at 06:21.
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Old 2nd February 2017, 10:13   #12
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Default re: The 2017 Union Budget!

There was nothing so exceptional in this budget.
Any year, there are very few things that actually bring a smart dose of positivism for salaried class (More so those working in private sector).
Whats really amusing : India's growth of GDP was highest last year and is likely to be a global leader in economic growth, but in 2015 it had lowest new job creation out of last 7 years.
This jobless growth is something I am not able to comprehend. There is a promise and always future is predicted as rosy with huge opportunity that would be capitalized. Next year, same old story, and the saga moves on.

I would be a bit blunt here, but the data shown by government about income tax is horrible and embarrassing. Its failure of govt., and citizens. Honesty hurts here. From what I have read, the indirect tax would increase further in form of VAT (VAT was shown to citizens as savior of country when introduced) . How cars would be classified under GST remains a question. I think GST will also be very complex, given the nature of any government.

At the end of the day, nothing to cheer about, just some modifications in tax to increase revenue collection.
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Old 2nd February 2017, 12:16   #13
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Default re: The 2017 Union Budget!

Sharing a Whatsapp forward I received:

Quote:
Budget in 2 mins:

• It's a historic session as Railway Budget is merged with the Union Budget.
• 1.4 lakh villages declared open defecation free.
• Adhaar based smart cards with health details for senior citizens.
• Surplus liquidity in the banking system will aid in lower loan interest rate & credit growth.
• Holding period Long Term Capital Gains Tax (LTCG) on land and building reduced from 3 yrs to 2 yrs. Base for indexation raised from FY 1981 to FY 2001.
• To achieve 100% Village electrification by 1st May 2018.
• PM Gram Sadak Yojana construction at 133 km per day now vs 73 km per day earlier.
• Affordable Housing given Infra Status. Affordable Housing criteria increased by 30%.
• MAT Increased from 10 to 15Yrs
• Companies having Turnover less than 50Cr to pay 25%.
• No Cash Payment over 3 lac to be accepted.
• Tax to GDP Ratio is very low
Income upto 2.5 Lakhs - Nil Tax
Income above 2.51 Lakhs to 5 Lakhs - Reduces to 5% Tax from 10%
Income above 50 Lakhs to 1 Crore - 10% surcharge.
• Introduction of E-Assessment
• Mahila Shakti Kendra will be set up at village level & it will aim for Woman Empowerment,
• Govt will launch 2 new schemes to promote BHIM App.
• IRCTC, IRCON & IRFC to be listed on stock exchanges
• Scrutiny reduced to 18Months for AY 18-19 and 12 months for AY 19-20.
• No changes in service tax & excise duty as GST draft will be launching soon
• Double income of Farmers in 5 years
• 8% guaranteed pension for for Senior Citizens by LIC of India scheme
• Rail Budget: 1.31 Lakh Crores, New Railway Line of 3500 kms, No service charge on IRCTC Ticket booking.
• Continue through ETF's and timely disinvestments of PSU's, Target 72500 Crores.
• Propose transparency in political party funding. Political funding limit set at Rs 2000; checks, e-payments only.
• Post Offices to become front end for Passport services.
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Old 2nd February 2017, 15:15   #14
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Quote:
Originally Posted by aaggoswami View Post
India's growth of GDP was highest last year and is likely to be a global leader in economic growth, but in 2015 it had lowest new job creation out of last 7 years.
This jobless growth is something I am not able to comprehend.
Excellent question, and THE elephant in the room that no one wants to even look at. India needs to create about 250 million more jobs by 2030, if it is not to descend into massive social unrest caused by that many people that will need to have them to keep them usefully occupied in constructive and economically rewarding ways. Because if they do not have these, they will not sit on their hands and watch the rest of us having a good time.
http://www.livemint.com/Opinion/o4f3...ss-growth.html
is an excellent analysis, except that it only says how that problem needs to be addressed and no insights into what the solutions will look like.
On top of it all, this needs to be done with the challenge of doing this in a manner that does not simultaneously and proportionately do the same damage to the environment that has been done so far by the growth till now. Witness the rapidly degrading quality of life in our major cities.
And in a time where the prevailing environment in the West is moving to more protectionism, less globalisation - while existing things are difficult to reverse, I can't see another global manufacturing hub of the kind China was able to become, being able to come up in this environment where the West is looking to answers to drive up its own low growth in a manner that also drives up domestic median incomes. The languishing of these for decades now is the reason for things like Brexit and Trump.
Pardon me therefore for being a pessimist. And for thinking more and more, that Mahatma Gandhi was right after all in all he espoused as an economic development model for India.
India needs viable and installed solutions for this issue very quickly and the budget exercise is an irrelevancy in that context. In the long run, jobs aren't created by government spending to address populist demands, even if the sky high levels of leakages in these spending schemes were to be addressed - which is nowhere near happening.
Yes, the direct tax collection story reflects very poorly on both the government and the governed but instead of beating ourselves for that, we need to ask our leaders the real questions that no one seems to want to:
1. What are you doing with all the taxes that ARE collected, such that all the leakages are plugged?
2. How is that adding to job creation in a manner that preserves the environment - and by jobs here, I exclude the digging ditches just to justify the payment of a wage kind of jobs - at a run rate that will create 250 million jobs in less than 15 years?

Further to the above, here is an interesting snap shot of the budget proposals that few are aware of, with confusing zeros stripped out to make it meaningful to us!:
1. Taxes collected: Rs 12 lakhs
2. Expenditure: Rs 15 lakhs - try doing this with your family budget!
3. New loans from banks - Rs 5 lakhs
4. Level of existing debt - Rs 70 lakhs
What I have not been able to find is how much of the Rs 12 lakhs in item 1 consists of salary to employees of the GOI and interest payments on existing debt. It is almost certainly more than Rs 6 lakhs and may even be close to Rs 9 lakhs. If anyone can answer that, or fine tune the above numbers, my thanks.

Last edited by GTO : 2nd February 2017 at 15:31. Reason: Merging back to back posts
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Old 2nd February 2017, 15:37   #15
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Default Re: The 2017 Union Budget!

If you ask me, the annual 'budget' took place that night in November when demonetisation happened . Big supporter of the move.

Yesterday's budget was good. Holding the ship steady.

Happy that companies now pay merely 25% in tax. This is an incredibly fair rate and I'll happily pay it. Hope such a low rate encourages more companies to become legitimate. End of the day, the power of white money is 10X greater than black money.

Quote:
Income upto 2.5 Lakhs - Nil Tax
Income above 2.51 Lakhs to 5 Lakhs - Reduces to 5% Tax from 10%
In other words, someone with an income of 5 lakhs pays merely 12,500 bucks in taxes.

The auto industry (as always) got no desserts or cakes yesterday. They were royally ignored (as always), after months of useless lobbying (as always) by the useless SIAM.

The Budget's support to rural India will keep the sales of 2-wheelers strong. It'll also benefit players like Maruti, Hyundai & Mahindra who have a powerful presence in rural markets.

Last edited by GTO : 2nd February 2017 at 15:38.
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