In an election year, Arun Jaitley favours middle, small tax payers

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budgetFM Arun Jaitley on February 1 presented his fourth Budget in the Lok Sabha. Just as many industry captains had foreseen, here are some of the announcements Jaitley has made :

1. Income tax for salaried class has been halved.

2. Income tax rate on incomes between Rs 2.5 lakh and Rs 5 lakh has been slashed to 5 per cent from 10 per cent.

3. Targeting the rich class, Jaitley said those earning income between Rs 50 lakh and Rs 1 crore will now have to pay an additional surcharge of 10 per cent.

4. The finance minister has abolished all cash transactions over Rs 3 lakh.

5. Budgetary allocation for MNREGA has been increased to Rs 48,000 crore.

6. Rs 1.31 lakh crore sanctioned to the Railways for developmental work.

7. Jaitley proposed to set up two new AIIMS in Jharkhand and Gujarat.

Pointing to harsher times to come, Jaitley said out of 3.7 crore who filed tax returns in 2015-16, 24 lakh persons had shown income over and above Rs 10 lakh. It was pity that out 4.2 crore people in the organised sector employment, tax assesees are only 1.74 crore. The poor state of affairs calls for increasing the tax net.

Similarly, basic customs duty on LNG has been proposed to be reduced from 5 per cent to 2.5 per cent.

Announcing that the government was proposing to tighten laws on cheque dishonour, he said some offenders fled the country to escape the law. In such a scenario, the government is only left with formulating new laws to seize the assets of the guilty.

To cut down corruption and also to increase the tax net, the finance minister has abolished all cash transactions over Rs 3 lakh.

Playing the spoilsport, he announced that the maximum amount one can donate to political parties was Rs 2,000. This move will make many political parties see red.

The government’s demonetisation move was a bold one, he said it’s main aim was tax evasion. Its impact wasn’t likely to spill over into the next year. Demonetisation will lead to higher tax revenue, and reduce corruption.

Stating that the Good and Services Tax would promote various sectors, he said that the manufacturing sector now stood at the sixth position in the world.

Stating that he felt privileged to present the first merged Budget, he said presenting an early Budget has its own advantages. Every department starts making schemes right from the start of the fiscal year, added Jaitley.

More than Rs 3 lakh crore are spent in various forms in rural areas every year, he said steps would be taken to give that something extra to farmers in the budget.

Stating that agriculture was likely to grow at 4.1 per cent, Jaitley said an irrigation fund has been set up under NABARD, the corpus of which stands at Rs 40,000 crore.

Claiming that Swachh Bharat Mission’s coverage has increased by 60 per cent, Jaitley said budgetary allocation for MNREGA has been increased to Rs 48,000 crore. This was the highest allocation given to it so far, he added.

Proposing to create an integrated state-run energy company to take on other companies in this sector, he said the railway related state-run companies such as Ircon, IRCTC would be listed on stock exchanges. This apart, shares of railway public enterprises will also be listed on stock exchanges.

Stating more reforms in foreign direct investment guidelines will be taken up soon, he said the government has decided to abolish Foreign Investment Promotion Board.

Total allocation for infrastructure at record level of Rs 3.96 lakh crore, he said for transport sector as whole, Rs 2.41 lakh crore for 2017-18; the fund will also boost infrastructure sector.

Stating that Railways will focus on passenger safety, cleanliness, developmental works, he announced the government has sanctioned Rs 1.31 lakh crore to the Railways for developmental work. In this regard, a safety fund has been set up with Rs 1 lakh crore. In the same breath, he proposed to make 500 railway stations disabled friendly.

Jaitley proposed to set up two new AIIMS in Jharkhand and Gujarat. Also, steps would be taken to create an additional 5,000 postgraduate seats per annum for medical education.

This apart, passports can also be had at Head Post Offices one need go all the way to Passport office to get the service.

Meanwhile stock markets went up after the the finance minister completed his Budget presentation. Sensex shot up by as many as 160 points at 27,816 and Nifty advances 40 points to 8,602.