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Total expenditure of Rs. 21.47 lakh crore in Budget 2017-18, fiscal deficit pegged at 3.2%

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Finance Minister Arun Jaitley presented the General Budget for 2017-18 to the Lok Sabha today, proposing a total expenditure of Rs. 21.47 lakh crore which, he said, would have multiplier effects and lead to higher economic growth.
 
The total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores, against Rs.3.60 lakh crores in Budget Estimates (BE) 2016-17. 
 
Defence expenditure, excluding pensions, for the year has been proposed at Rs. 2,74,114 crores.
 
This was the first time that the Budget was presented on February 1, a full month ahead of February 28, the date on which the Budget was presented for decades. This was also the first time that the Railway Budget has been subsumed in the General Budget.
 
This year’s Union Budget also does not have Plan and Non-plan classifications.
 
Mr. Jaitley said the Government's agenda was “Transform, Energise and Clean India” (TEC) to transform the quality of governance for better quality of life.
 
The aim is to energise various sections of society, especially the youth and the vulnerable and to clean the country from the evils of corruption, black money and non-transparent political funding.  He said the approach was to spend more in rural areas, on infrastructure and poverty alleviation while maintaining fiscal prudence. 
 
Economic reforms will be continued to promote higher investments and accelerate growth for the benefit of the poor and the underprivileged, he said.
 
He said he had taken into consideration the need for higher public expenditure in the context of sluggish private sector investment and slow global growth. He, however, said that he had kept in mind the recommendation of the Fiscal Responsibility and Budget Management (FRBM) Committee that a sustainable debt should be the underlying basis of prudent fiscal management.
 
He said that, considering aspects in the committee report, the fiscal deficit for 2017-18 had been pegged at 3.2% of GDP.  He said that he remained committed to achieve 3% in the following year. 
 
Mr. Jaitley also said that the revenue deficit for next year is pegged at 1.9% , against 2% mandated by the FRBM Act.
 
For the first time, a consolidated Outcome Budget, covering all Ministries and Departments, was tabled in Parliament along with the Union Budget.
 
Mr. Jaitley said the target for agricultural credit in 2017-18 had been fixed at a record level of Rs. 10 lakh crore.  A Micro Irrigation Fund with an initial corpus of Rs. 5,000 crore with an objective to achieve the goal, ‘per drop more crop’ and a Long Term Irrigation Fund with corpus of Rs. 40,000 crore will be set up, he said.
 
He said that a model law on contract farming would be prepared and circulated among the States for adoption. He also said that a Dairy Processing and Infrastructure Development Fund with a corpus of Rs. 8,000 crore over three years would be set up in NABARD. Initially, the fund will have a corpus of Rs. 2,000 crore.
 
Mr. Jaitley said the Government would launch Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the year marking the 150th birth anniversary of Mahatma Gandhi, the Father of the Nation. He said the strategy was to utilise the existing resources more effectively along with annual increases and a focused micro plan for sustainable livelihood for every deprived household.
 
Under the reoriented Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) to support the Government's resolve to double farmers’ income, about 10 lakh farm ponds are expected to be completed by March 2017 against the targeted 5 lakh farm ponds. This will contribute greatly to drought proofing of gram panchayats, he said. The budgetary provision of Rs. 38,500 crore under MGNREGA in 2016-17 has been increased to Rs. 48,000 crore in 2017-18, the highest ever allocation for the scheme.
 
Mr. Jaitley said the pace of construction of the Pradhan Mantri Gram Sadak Yojana (PMGSY) had accelerated to reach 133 km of roads per day in 2016-17, as against an average of 73 km during the period 2011-2014. He said the Government was committed to complete the current target under PMGSY by 2019.  A sum of Rs. 19,000 crore has been allocated in 2017-18 for this scheme and together with the contribution of States, an amount of Rs. 27,000 crores is to be spent on it in 2017-18.
 
An allocation of Rs. 23,000 crore has been made in 2017-18 for the Pradhan Mantri Awaas Yojana – Gramin, the Government's flagship rural housing programme, against Rs.15,000 crore in BE 2016-17. Mr. Jaitley said the Government proposed to complete 1 crore houses by 2019 for the houseless and those living in "kutcha" houses. He said the allocation for Prime Minister's Employment Generation Programme (PMEGP) and credit support schemes has been increased more than three times.
 
Mr. Jaitley said the total allocation for the rural, agriculture and allied sectors in 2017-18 was Rs. 1,87,223 crores, 24% higher than in the current year.
 
To give a boost to skill development programmes for the youth, the Pradhan Mantri Kaushal Kendras (PMKK), set up in more than 60 districts, will be extended to more than 600 districts, he said.
 
A programme called SANKALP  - Skill Acquisition and Knowledge Awareness for Livelihood Promotion -- to provide market relevant training to 3.5 crore youth with a budget of Rs. 4,000 crore has been announced . The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be launched in 2017-18 at a cost of Rs. 2,200 crore to focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry cluster approach.
 
A National Testing Agency is proposed to be established as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions in the country.
 
Leveraging Information Technology, a platform called SWAYAM is proposed to be launched to teach at least 350 courses by the best faculty online. This will enable students to virtually, attend the courses taught, access high quality reading resources; participate in discussion forums; take tests and earn academic grades.
 
For higher education reforms in UGC and for secondary education an Innovation Fund to encourage local innovation for ensuring universal access, gender parity and quality improvement with initial focus on 3479 educationally backward blocks is proposed. For schools, flexibility in curriculum to promote creativity through local innovative content with  emphasis on science education and introduction of a system for measuring annual learning outcomes is proposed.
 
Mr. Jaitley announced that Mahila Shakti Kendras would be set up at village level with an allocation of Rs. 500 crore in 14 lakh ICDS Anganwadi Centres. He said these Kendras  are for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition.
 
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Recalling announcements made by Prime Minister Narendra Modi in an address to the nation on December 31,  the Finance Minister said Rs. 6,000 each would be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children. 
 
The budget for the welfare of women and chilren has been stepped up from Rs.  1,56,528 crore in BE 2016-17 to Rs 1,84,632 crore in 2017-18.
 
As a part of efforts to strengthen the overall health infrastructure in the country, Mr. Jaitley said two new All India Institutes of Medical Sciences (AIIMS) would be set up in Jharkhand and Gujarat. He said the Government was committed to take all necessary steps for structural transformation of the Regulatory framework of medical education and practice in India, which includes an increase in the number of post-graduate medical seats.
 
The allocation for the welfare of Scheduled Castes has been stepped up from Rs. 38,833 crore in BE 2016-17 to Rs. 52,393 crore in 2017-18, an increase of about 35%. The allocation for Scheduled Tribes has been increased to Rs. 31,920 crore and for Minority Affairs to Rs. 4,195 crore. The Government will introduce outcome based monitoring of expenditure in these sectors by the NITI Aayog, he said.
 
Mr. Jaitley said Rs. 3,96,135 crore had been made for infrastructure development in 2017-18, out of which Rs. 2,41,387 crore is for  railways, roads and shipping.
 
The total capital and development expenditure on Railways for 2017-18 will  be Rs. 1,31,000 crore,. Out of this Rs. 55,000 crores will be provided by the Government. Railway lines of 3,500 kms will be commissioned in 2017-18, as against 2,800 kms in 2016-17. A Rashtriya Rail Sanraksha Kosh will be created with a corpus of Rs. 1 lakh crore over a period of five years for passenger safety. The Government will lay down clear cut guidelines and timeline for implementing various safety works to be funded from this Kosh, he said.
 
Mr. Jaitley said a new Metro Rail Policy woulc be announced with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. He also said that a new Metro Rail Act would be enacted by rationalising  the existing laws to facilitate greater private participation and investment in construction and operation.
 
In the roads sector, a Budgetery allocation of Rs. 64,900 crore has been made for 2017-18 for highways against Rs. 57,976 crore in BE 2016-17. He said 2,000 kms of coastal connectivity roads have been identified for construction and development to facilitate better connectivity with ports and remote villages.
 
Mr. Jaitley said the Airport Authority of India Act would be amended to enable effective monetisation of land assets. The resources, so raised, would be utilised for airport upgradation. He said that select airports in Tier 2 cities would be taken up for operation and maintenance in the public-private partnership (PPP) mode.
 
He said that, by the end of 2017-18, high-speed broadband connectivity on optical fibre would be available in more than 1,50,000 gram panchayats, with wi-fi hot spots and access to digital services at low tariffs. He said that, accordingly, the budget for Bharat Net Project had been stepped up to Rs. 10,000 crore in 2017-18. He pointed out that under the Bharat Net Project, optical fibre cables had already been laid in 1,55,000 kms. The Minister said that a ‘DigiGaon’ initiative will be launched to provide tele-medicine, education and skills through digital technology.
 
In the energy sector, Mr. Jaitley said the Government had decided to take up the second phase of Solar Park development for additional 20,000 MW capacities. Similarly, in the second phase, the government has decided to set up two more Strategic Crude Oil Reserves, one at Chandikhole in Odisha and other at Bikaner in Rajasthan, besides the three set up earlier.
 
He said that a new and restructured Central scheme, Trade Infrastructure for Export Scheme (TIES), will be launched in 2017-18.
 
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Mr. Jaitley announced that the Government had decided to abolish the Foreign Investment Promotion Board (FIPB) in 2017-18.  He said that a roadmap in this regard would be announced in the coming months. According to him, this had become possible as FIPB had successfully implemented e-filing and online processing of FDI applications and more than 90% of the total FDI inflows are now through the automatic route. In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course, he added.
 
He said a Bill would be introduced in the Parliament to curtail the menace of illicit deposit schemes.
 
He said that an amendment Bill to change the Arbitration and Conciliation Act 1996 will be introduced to streamline institutional arrangements for resolution of disputes in infrastructure related  construction contracts, PPP and public utility contracts.
 
The Minister asserted that the disinvestment policy announced in the last budget would continue and the Government would put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges.
 
He said a Computer Emergency Response Team for the Financial Sector (CERT-Fin) would be established and it would work in close coordination with all financial sector regulators and other stakeholders.
 
Other proposals announced by the Minister are:
 
1.      The commodities and securities derivative markets will be further integrated by integrating the participants, brokers, and operational frameworks.
2.      The process of registration of financial market intermediaries like mutual funds, brokers, portfolio managers, etc. will be made fully online by SEBI to improve ease of doing business.
 3.      A common application form for registration, opening of bank and demat accounts, and issue of PAN will be introduced for Foreign Portfolio Investors (FPIs). SEBI, RBI and CBDT will jointly put in place the necessary systems and procedures. This will greatly enhance operational flexibility and ease of access to Indian capital markets.
 4.       Steps will be taken for linking of individual demat accounts with Aadhar.
5.       Presently institutions such as banks and insurance companies are categorised as Qualified Institutional Buyers (QIBs) by SEBI. They are eligible for participation in IPOs with specifically earmarked allocations. It is now proposed to allow systemically important NBFCs regulated by RBI and above a certain net worth, to be categorised as QIBs. This will strengthen the IPO market and channelize more investments.
6.       Listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows in to the securitisation industry and will particularly be helpful to deal with bank NPAs.
 
The Finance Minister announced that the Government will put in place a revised mechanism and procedure to ensure time bound listing of identified Central Public Sector Enterprises (CPSEs) on stock exchanges. He announced that the shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed on the stock exchanges.
 
He also said that the Government proposed to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies. He said the Government saw possibilities of strengthening CPSEs through consolidation, mergers and acquisitions.
 
Mr. Jaitley said Rs. 10,000 crore for recapitalization of banks had been allocated in 2017-18 and additional allocations would be made if required. He said listing and trading of Security Receipts issued by a securitization company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows into the securitization industry and will particularly be helpful to deal with bank NPAs.
 
For  the the Pradhan Mantri Mudra Yojana the lending  target has been set at Rs. 2.44 lakh crore in 2017-18, doubling it from the level in 2015-16 with priority to be given to Dalits, Tribals, Backward Classes, Minorities and Women.
 
The Finance Minister announced that a new exchange traded fund (ETF) with diversified CPSE stocks and other Government holdings will be launched in 2017-18.
 
Mr. Jaitley said the BHIM app launched by the Government for digital transactions would unleash the power of mobile phones and Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly for those who do not have debit cards, mobile wallets and mobile phones for digital payments and financial inclusion.
 
 The minister said that a Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards. He said a proposal to mandate all Government receipts through digital means, beyond a prescribed limit, was under consideration. The minister also said that necessary amendments are proposed in the Finance Bill 2017  to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems. Government is also considering the option of amending the Negotiable Instruments Act suitably to ensure that the payees of dishonoured cheques to be able to realise the payments.
 
Stating that the Government is committed to improve the standards of public service and transparent governance, the Finance minister announced that the fallowing measures will be taken:
 
Government now proposes to utilise the Head Post Offices as front offices for rendering passport services to people in far flung areas.
 
A comprehensive web based interactive Pension Disbursement System for Defence Pensioners will be established to receive pension proposals and make payments centrally.
 
A Centralised Defence Travel System has now been developed through which travel tickets can be booked online by oursoldiers and officers.
 
Government is considering introduction of legislative changes, or even a new law, to confiscate the assets within the country of such economic offenders who flee the country, till they submit to the jurisdiction of the appropriate legal forum. 
 
The government proposes to rationalise the number of tribunals and merge tribunals wherever appropriate.
 
NNN
 
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