On 1/2/2017 Finance Minister Arun Jaitley presented budget for 2017-18. It is the first time budget was presented on 1 February. This time Railway Budget was incorporated into budget. Opposition parties wanted postponement of budget due to elections in UP, Punjab, Manipur, Goa and Uttarakhand. Government did not agree. The matter went to Supreme Court. Supreme Court upheld government’s decision to present budget on 1 February. On 31/1/2017 E. Ahamed, MP and former member, collapsed and taken to hospital. Congress wanted postponement of budget by a day because a sitting member of Lok Sabha had died. BJP said in 1974 when an MP died budget was presented as scheduled. Sumitra Mahajan said budget will go ahead and 2/2/2017 will be a holiday. If Congress members wanted a holiday they should have walked out after obituary reference.
Expected expenditure for 2017-18 is 21 lakh crore rupees. Cash in India as on 8/11/2016 when demonetisation was announced which proved to be a disaster was 18 lakh crore rupees. Expected expenditure is 3 lakh crore rupees more than that. There is still limit of 24,000 rupees on withdrawal from savings bank accounts. Things were supposed to be normal by 30/12/2016. It is not normal even after one month after that date. Election Commission wanted RBI to lift withdrawal limit from savings bank accounts to enable candidates to pay in cash. RBI withdrew limit on current accounts. If candidates want to withdraw 28 lakh rupees or so during election time they have to open current accounts.
There is reduction of Income Tax from 10% to 5% in 2.5 — 5 lakh rupees category and 12,500 rupees for income above 5 lakh rupees. There is 10% surcharge for income between 50 lakh and 1 crore rupees. There is some tinkering in direct and indirect tax rates.
Donations above 2,000 rupees to political parties have to be in cheque or digital. It was anonymous donations up to 20,000 rupees which is brought down ostensibly to ensure accountability and transparency. In reality anonymous donations up to 2,000 rupees is a loophole which political parties will exploit. BJP has not gone cashless and digital in accepting donations. Ban on anonymous donations to political parties, audit of accounts of political parties by CAG and bringing political parties under RTI are necessary to curb black money in politics.
Sensex went up 485 points. Usually if Sensex goes up during Budget Day it comes down during succeeding days and vice versa.
Ban on cash transactions above 3 lakh rupees is proposed. It remains to be seen how far the ban will be successful.
Cash donation to charitable trusts is limited to 2,000 rupees.
Abolition of Foreign Investment Promotion Board is good.
More than half of Modi government’s term is over. There were great expectations when he became PM. Not much changed under him. Things are worse in recovery of bank loans. MNREGA continues and more money is given to it. Schemes with freebies and subsidies continue and more get added. Current account deficit, fiscal deficit, and revenue deficit continue. Rupee has depreciated more. India is just four ranks up in ease of doing business. Credit rating has not changed much. This year in Davos there was no talk of India. There is not much difference between Congress budgets and BJP budgets. If Modi thought he had ten years he was mistaken. Victory in elections is not to be taken for granted.
