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 Will the Budget 2017-18 be good news for Indians?

Source: PTI

Tomorrow’s 82nd Union Budget, is speculated to be the most dynamic budget of recent times. The good news season has already started with the relaxation on the limitations of cash withdrawals from ATMs for current account holders.  Post the demonetization drive, the people of India are looking forward to the budget presentation with optimism.

 

A NEW WAY

 

 


There are three major modifications in this year’s Budget presentation-

  • The date of the presentation of the Budget:

Since the 1st budget preparation, the budget is presented on the last working day on the month of February. But, starting this year, the Budget would be presented on 1st Feb. The reason stated for this change is to ensure that the whole process of the approval of the Finance bill is completed by 31st March 2017. Also, it will help in implementation of direct and indirect proposals from the beginning of the year.

  • The merger of the Rail and the Union Budget:

 This merger will bring the affairs of the Railway to the center stage and present a holistic picture of the financial position of the government. This will help to raise capital expenditure in Railways and boost economic growth.

  • The Merger of the plan and non- plan classification in the budget and the account:

This merger is expected to provide appropriate budgetary framework having focus on the revenue and capital expenditure. This move will link government spending to its eventual outcome more effectively.

Source: Finance Ministry’s twitter handle

Meaning of planned and non-planned budget expenditure:

 http://www.gktoday.in/blog/plan-and-non-plan-expenditures/


The twitter handle also indicated continued transformation in this new Budget, quoting “Sabke Vikas ka Budget, Nayi soch, Nayi Dishayen”, meaning, “The budget is for everyone’s prosperity, new thinking, and new direction”.


WHAT WOULD CHANGE?


Deloitte, one of the major financial advisory and consulting corporations, has listed out some major changes that could bring happiness to the citizens of the country.

  • Baseline Tax rate reduction – 30% to 20-25%

A huge amount of cash is now in the hands of the government, due to the demonetization drive. Due to this, the fiscal deficit is expected to go down. And following this, probably the baseline tax rate would come down.


“While presenting the Union Budget for 2015- 16, the Finance Minister had laid down the roadmap for reducing the corporate tax rate from 30% to 25% over a 4 year period. However, given the recent developments in India and abroad, there is a strong case for revisiting this proposal and bring down the rate to around 20% over the next 2 years” -Subhankar Sinha Head of Tax South Asia & Middle East, Siemens , On rate of tax for corporate

 

  • Incentives to financial technology companies engaged in cashless transaction business:
    Since the government was keen to introduce a cashless economy, promoting online payment companies. Thus, there could be significant economic incentives for companies engaged in cashless transaction business.

 

Ramesh Khaitan Sr. Vice President – Taxation, Lupin Limited, said, “With increased thrust on digitization the Budget should provide additional incentives for people to go digital. One such area would be waiver of transaction service fee, discount on digital payments to the customers and reduced rate of taxation”

  • Tax incentives for infrastructure and manufacturing sector:

As there is available cash with the government, again, following demonetisation, there could be a boost in the infrastructure and manufacturing sector with tax incentives.
Some of the speculations that are going around in social media say about the increase in the tax exemption slab. The slab would increase to 3 lakh rupees from the previous slab amount of 2.5 lakh rupees.


EXPERT SPEAK
Expert from the industry speak about the budget annoncement:

  • “I expect the Finance Minister to announce the GST implementation schedule & do not expect lot of changes in current indirect tax laws and rates during the interim period.”

- Satyajit Ghoshal Assistant Vice President-Taxation & Insurance, TATA Chemicals LTD

  • Raj Raghavan Director Human Resources, Amazon, said, “I will be keen to see development of a single-window of compliance for labor and employment related compliance requirements. Of course, digitizing some of these is certainly helpful but a single-window will help ease of compliance,”

Source: PTI

 

HISTORY


History of the Budget in India:

  • The budget was first presented on 26th November 1947, by R.K Shamukham Chetty, the then Finance Minister. India has had 80 more budgets after that, and tomorrow would be the 82nd session.
  • The presentation of the budget started in the evening at 5 pm, which was inherited from the colonial era. This practice was changed by former Finance Minister Mr. Yashwant Sinha, who presented the 2011 budget at 11 am.
  • Before tomorrow’s presentation, the Rail budget was presented separately since 92 years.
  • The Budget is prepared in ultimate secrecy in the North block office of Raisina Hill, New Delhi.
  • The printing of the budget starts one week before the commencement of the budget with a special “Halwa ceremony”, as a part of the Indian Tradition to eat something sweet before starting an important work.  

This year’s budget presentation is very crucial due to the above speculations of witnessing some major economic reforms, along with the GST. It is also important as we have recently come out of a major financial change of the note ban.
Source: internet
The expert opinions were published in a recent report by Deloitte.

Find report here: http//bit.ly/2kmqg9x

 

 



 

 

 

 

 

 

 

 

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