Highlights of Union Budget for 2017-18 on 01 Feb 2017

 MUMBAI - Highlights of the Union Budget for 2017-18 (Apr-Mar), presented
by Finance Minister Arun Jaitley in the Lok Sabha today:
 
FY18 ESTIMATES
* Pegs FY18 nominal GDP growth at 11.75%
* FY18 fiscal deficit aim 3.2% of GDP
* FY18 revenue deficit pegged at 1.9% of GDP
* FY18 net market borrow pegged at 3.48 trln rupees post buyback
* FY18 net market borrowing pegged at 4.23 trln rupees
* FY18 gross market borrowing pegged at 5.8 trln rupees
* FY18 gilt repayments 1.56 trln rupees
* FY18 gilt buyback pegged at 750 bln rupees
* To switch 405 bln rupees of gilts maturing in FY18 by Mar
* Without buyback, FY18 net mkt borrow 4.23 trln rupees
* FY18 total expenditure pegged at 21.47 trln rupees
* FY18 divestment receipts pegged at 725 bln rupees
* Capital expenditure allocation up 25.4% in FY18
* Transfer of resources to states, UTs at 4.11 trln rupees
* Allocate 2.74 trln rupees for defence, excluding pension
* Outlay for scientific ministries at 374.35 bln rupees
* FY18 PSU divestment receipts pegged at 465 bln rupees
* FY18 strategic sale receipts pegged at 150 bln rupees
* FY18 receipts from listing of insurance PSUs 110 bln rupee
* FY18 gross tax revenue pegged 11.3% of GDP
* FY18 small savings receipt pegged at 1 trln rupees
* FY18 net short term borrowing at 20 bln rupees
* FY18 gross tax revenue seen 19.12 trln rupee, up 12.2%
* FY18 tax-GDP ratio seen 11.3%
* FY18 corporation tax mop-up seen 5.39 trln rupees
* FY18 total income tax mop-up seen 4.41 trln rupees
* FY18 excise duty mop-up seen 4.07 trln rupees
* FY18 total customs duty mop-up seen 2.45 trln rupees
* FY18 total service tax mop-up seen 2.75 trln rupees
* FY18 fertiliser subsidy pegged at 700 bln rupees
* FY18 revenue expenditure pegged 18.4 trln rupees
* FY18 fiscal deficit pegged at 5.46 trln rupees
* FY18 telecom revenue with spectrum seen 443 bln rupees
* FY18 PSU dividend seen 675 bln rupees
* FY18 RBI surplus, PSU bank dividend seen 749 bln rupees
* FY18 capital expenditure pegged 3.1 trln rupees, up 10.7%
* FY18 revenue expenditure pegged 18.4 trln rupees, up 5.9%
* FY18 food subsidy pegged at 1.45 trln rupees
* FY18 petroleum subsidy seen at 250 bln rupees
* FY18 revenue deficit pegged at 3.21 trln rupees
* FY18 major subsidies pegged at 2.4 trln rupees
* FY18 total subsidies pegged at 2.72 trln rupees
* Allocates 649 bln rupees for road transport ministry
* Allocates 68.87 bln rupees for water ministry, Ganga plan
* Allocates 342.12 bln rupees for urban development ministry
* Allocates 54.73 bln rupees for renewable energy ministry
* Allocates 64.06 bln rupees for housing ministry
* Allocates 271.31 bln rupees for National Health Mission
* Allocates 60.50 bln rupees for rural drinking water plan
* Allocates 295.56 bln rupees for National Education Mission
* Allocates 22.5 bln rupees for National Ganga plan
* Allocates 180 bln rupees for metro rail projects
* Allocates 35 bln rupees for price stabilisation for pulses
* Allocates 6 bln rupees for Sagarmala project
* Allocates 25 bln rupees for LPG connection for poor
* Allocates 100 bln rupees for National mid-day meal scheme
* Allocates 90-bln-rupee for smart cities, urban renewal plan
* Allocates 162.5 bln rupees for Swachh Bharat plan
* Allocates 207.6 bln rupees for integrated child dev plan
* 2 bln rupee to farm min for mkt intervention, price support
* 35 bln rupees to consumer min for price stabilisation fund
* FY19 revenue deficit target 1.6% of GDP
* FY19, FY20 fiscal deficit target at 3.0% of GDP
* FY20 revenue deficit target 1.4% of GDP
 
FY17 REVISED
* FY17 fiscal deficit revised to 3.2% of GDP
* FY17 fiscal deficit pegged at 5.34 trln rupees
* FY17 revenue deficit revised to 2.1% of GDP
* Advanced tax in personal income up 34.8% so far FY17
* FY17 net tax mop-up to grow by over 17% for 2nd year running
* FY17 gilt buyback/switch pegged at 1 trln rupees
 
POLICY
* To abolish FIPB in FY18; roadmap to be finalised in few months
* Further liberalisation of FDI under consideration
* To launch trade infrastructure export scheme FY18
* Mission to bring transformative shift in governance
* Underlying theme of our govt was good governance
* Moved to a system, policy-based administration
* Massive war against black money has been launched
* Govt moved from blanket entitlement to targeted delivery
* India considerably improved policies, econ profile
* GST, demonetisation two "tectonic" changes for economy
* Witnessed historic econ reforms in last one year
* Prudent fiscal management to be one of 10 themes of Budget
* FY18 Budget approach has been to spend more on rural areas
* Presenting FY18 Budget early to avoid Vote on Account
* Transform, energise, and clean India agenda for next year
* To focus on public service, effective governance
* Aim to provide relief to middle class, curb black money
* Demand to get boost from accommodative monetary policy
* Computer emergency response team for cyber security
* To allocate more funds to recapitalise PSU banks if needed
* To rationalise number of tribunals by merging some
* Panel on FRBM for far reaching structural reforms
* Focus on maintaining best standards of fiscal prudence
* To use head post office as front office for passport service
* To have comprehensive web-based system for defence pensions
* To make 50,000 gram panchayats poverty free by 2019
* Efforts to reorient MGNREGA to double farm income
* 480 bln rupees for MGNREGA FY18
* Spent 470 bln rupees on MNREGA FY17
* 500,000 ponds to be dug up under MGNREGA FY18
* Will use space technology to plan MGNREGA projects
* Allocation for rural agri, allied sector 1.87 trln rupees
* FY18 rural farm, allied sector outlay at all-time high
* Focus on removing non-transparent political funding
* Political parties can get funds by cheque or digital mode
 
TAXATION
* India largely a tax non-compliant economy
* Halves income tax for 250,000-500,000 rupee slab to 5%
* 10% surcharge on taxable income of 5-10 mln rupees
* 15% surcharge on taxable income above 10 mln rupee remains
* Net revenue loss on direct tax at 200 bln rupee FY18
* To set up one Advance Ruling body for direct, indirect tax
* Committed to make tax rates reasonable, expand tax base
* Extend concessional withholding tax for debt until June 2020
* To allow carry-forward of MAT for 15 years from 10 years now
* Long-term capital gain period for land, building 2 years now
* Cut tax rate to 25% for cos with sub-500-mln-rupee turnover
* 96% of Indian cos to get benefit of lower corporate tax
* Tax rate cut to make MSME cos more viable
* To cut basic customs duty on LNG to 2.5% from 5%
* Revenue loss from low corporate tax for MSMEs 72 bln rupee
* Cash transactions above 300,000 rupees banned
* Cash donation limit for charity trusts cut to 2,000 rupees
* Announces tax sops for manufacture of digital pay devices
* Efforts needed to clean political funding system
* Removes 5% tax deduction at source for insurance agents
* To reduce levies on point-of-sale machines
* GST Council has finalised almost all recommendations
* Not many changes in indirect tax due to upcoming GST
* No significant gain or loss on indirect tax
* Ups excise duty on pan masala to 9% from 6%
* Ups excise duty on unmanufactured tobacco to 8.3% from 4.2%
* Ups excise on handmade paper-rolled bidi to 28 rupee/1000
* Ups excise on machine made paper-roll bidi to 78 rupee/1000
* Cuts excise duty on raw material for solar-tempered glass
* Levies 6% excise duty on solar-tempered glass
* Ups additional excise duty on some cigarette categories
* Ups additional excise on gutkha, chewing tobacco to 12%
* Ups customs duty on cashew nut to 45% from 30%
* Scraps customs duty on nickel
* Levies 12.5% countervailing duty on silver medallion, coin
 
MACROECONOMY
* Will ensure fruits of growth reach the vulnerable
* India seen as engine of global growth
* Govt has replaced sluggish growth with high growth
* To take many more steps to ensure growth reaches all
* India 6th largest manufacturing country, up from 9th
* India's macro-economic stability the foundation of success
* India FX reserves comfortable to cover for 12 month of imports
* Govt has pursued path of fiscal consolidation steadily
* To have fiscal consolidation without compromising on expenses
* Increased capacity of banks to lend at cheaper rates
* Surplus liquidity in banking system to boost credit access
* Expect CPI inflation to remain in RBI's mandated 2-6% range
* Inflation controlled, high growth replaced sluggish growth
* FDI at 1.45 trln rupees in Apr-Sep
* India at an important point in growth, development path
* Pickup in economy premised on policy, economic reforms
 
DEMONETISATION
* Demonetisation a bold and decisive measure, seeks to create a new normal
* Demonetisation aims for bigger, cleaner, more real GDP
* Note ban aims to transfer resource from tax evaders to govt
* Economic activity slowdown post demonetisation to be transient
* Tax evasion created an unacceptable parallel economy
* Demonetisation will up GDP growth, tax revenues
* Demonetisation will lead to greater digitisation of economy
* Demonetisation, GST to have epoch-making impact on Indians
* Effects of demonetisation won't spill over to next year
* Banks' surplus liquidity post note ban to lower borrow cost
* Surplus liquidity in banks to boost credit growth
* Pace of remonetisation has picked up
* Remonetisation to soon reach comfortable level
 
FINANCIAL MARKETS
* FPIs exempt from category I, II of indirect transfer norms
* To introduce Bill for resolution of financial firms in FY18
* Expert panel for integrated spot, futures commodity market
* Moots amendment to RBI Act for issuance of electoral bonds
* Draft bill to curb illegal deposit scheme ready
* To revise norms for time-bound listing of central PSUs
* Released mechanism for time-bound listing of PSUs
* Listing of PSUs to unlock true value of enterprises
* IRCTC, IRCON, IRFC to be listed
* To create a new ETF with diverse PSUs FY18
* To continue use of ETFs for divestment
 
BANKS, FINANCIAL SECTOR
* Allots 100 bln rupees to recapitalise PSU banks as per plan FY18
* PM Mudra Yojana lending target doubled to 2.44 trln rupees
* Exceeded Mudra Yojana FY17 lending aim of 1.22 trln rupee
* India on the cusp of massive digital revolution
* 12.5 mln users have adopted BHIM app
* To start referral bonus, cash-back plan to promote BHIM payment app
* Merchant version of Aadhaar-enabled payment scheme shortly
* Digital payment infra to be strengthened
* Aim 25 bln digital transactions via digital payment schemes
* Banks to set up 1 mln new point-of-sale terminals by March
* To strengthen financial inclusion fund
* Aim 2 mln Aadhaar-based point-of-sale terminals by Sep
* Moot payment regulatory board under RBI
* To review law to encourage digital payments
* Mull only digital payments beyond a level for govt receipts
* To work to implement proposals of CM digital payments panel
* To amend law to provide relief to dud cheque receivers
* Mull legislation to confiscate assets of econ offenders
 
INDUSTRY
* Propose to create integrated public sector oil major
* To set up strategic crude oil reserves in Rajasthan, Odisha
* Total strategic oil reserve capacity to rise to 15.3 mln tn
* To focus on infrastructure development
* To launch Incredible India phase-2 across the world
* Textile, leather, footwear to get cluster development plan
* To have special job scheme for leather, footwear sector
* Got 250 proposals for electronic manufacturing worth 1.26 trln rupee
* Trade export infrastructure scheme to be launched FY18
* 190 bln rupees allotted for PM rural road plan FY18
* PM road plan built 133 km/day in FY17
* Propose to create 10 mln houses for the houseless by 2019
* To achieve 100% rural electrification by May 1, 2018
* PM housing plan allocation raised to 230 bln rupees FY18
* Rural road plan outlay along with states 270 bln rupees
* National Housing Bank to refinance 200-bln-rupee loans FY18
* Allocate 2.41 trln rupees for overall transport sector FY18
* Allocate 640 bln rupees for national highways FY18
* To amend Airports Authority Act to monetise land assets
* Airports in Tier-2 cities to be taken on PPP mode
* 100 bln rupees allocated for BharatNet
* Allocate 3.96 trln rupees for infra FY18
* To link low-cost housing sop to carpet, not built-up, area
 
RAILWAY
* Merger of rail, general Budget a historic step
* Functional autonomy of railways to continue
* Indian Railways capital expenditure 1.31 trln rupees FY18
* FY18 Budget allocation for railways at 550 bln rupees
* To create rail safety fund of 1 trln rupees over 5 years
* Railway lines of 3,500 km to be commissioned in FY18
* Unmanned level crossings to be eliminated by 2020
* 500 railway stations to be made disabled friendly
* 25 railway stations to be redeveloped FY18
* Railways face stiff competition from other transport modes
* All rail coaches to have bio toilets
* Railway throughput to be enhanced by 10% in 3 years
* Railway to offer competitive ticket booking service
* Service charge on rail e-tickets via IRCTC to go
* 7,000 railway stations to be solar powered in medium term
* New metro rail policy to be announced
* Rail tariff to be fixed with eye on competition
* Rail to become end-to-end transport for some commodities
* Rail to involve private logistic companies for end-to-end transport
 
FARM SECTOR
* Commodity prices uncertainty a risk for emerging econ fisc
* Will double farm income in 5 years
* Agriculture sector expected to grow at 4.1% in FY17
* Target farm credit at 10 trln rupees FY18
* Will try to take farm loans to remote areas
* Will support NABARD to digitise 63,000 primary agricultural co-ops
* Cost of digitising agriculture co-ops 19 bln rupees in 3 years
* NABARD to get 50 bln rupees to set up micro irrigation fund
* To up crop insurance coverage to 40% FY18 vs 30% now
* To up crop insurance coverage to 50% FY19
* To double long-term irrigation fund corpus to 400 bln rupee
* National agriculture markets to be expanded to 585 markets
* 7.5 mln rupees to each APMC under e-NAM
* To form modern law for contract farming
* Over 3 trln rupees spent on rural programmes every year
* To set up dairy processing fund
* Dairy processing fund initial corpus at 20 bln rupees
* Dairy processing fund corpus to be 80 bln rupees over 3 years
* States to denotify perishables from APMC Act
 
SOCIAL SECTOR
* To strengthen social security system
* To energise youth through education, job creation
* Focus on energising youth to provide them with jobs
* Innovation Fund to be created for secondary education
* Sanitation in villages near 60% from 42% in Oct 2014
* To up allocation to Deen Dayal rural plans to 45 bln rupees
* To provide safe drinking water to polluted areas in 3 years
* To introduce measure of annual learning outcomes in schools
* To bring plan to assess annual learning outcome in schools
* To set up agency for entrance exams for higher education
* TO have outcome-based accreditation of colleges
* Allocate 40 bln rupees for skill acquisition programme
* Affordable housing to get infra status
* Allocation for women, children 1.84 trln rupees FY18
* 5 bln rupees marked for women empowerment
* Aim to eliminate leprosy by 2018, TB by 2025
* Two new AIIMS to be set up in Jharkhand, Gujarat
* New rules regarding medical devices will be formulated
* Committed to transform medical training, administration
* To amend rules on drugs, cosmetics to control prices
* 150,000 health sub-centres to become health wellness centre
* To bring reforms to simplify, rationalise labour laws
* To create 5,000 more seats for medical courses
* Allocate 523.93 bln rupees for Scheduled Caste schemes FY18
* Allocation for scheduled caste welfare 524 bln rupees
* Allocation for scheduled tribe welfare 319 bln rupees
* Allocation for minority affairs 41.95 bln rupees
* To bring Aadhaar-based health cards for senior citizens
* LIC to launch assured pension income for the elderly at 8%
 
EXTERNAL FACTORS
* US Fed stance on rate hike may lead to capital outflows
* US Fed policies are a challenge
* Protectionism may hit export from emerging markets like India
* US Fed's monetary policy stance may cause lower capital inflow
* Signs of retreat from globalisation on rising protectionism
* Present this Budget amid global uncertainty
* India stands out as a bright spot in global econ scene
* Economy has weathered external shocks
End

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ABOUT ISSUE: ISSUE DETAILS ISSUE HIGHLIGHTS OFFER STRUCTURE ISSUE BREAKUP Reservation for % of Issue ` In Crs. Price Band:  ` 805 to ` 806 Issue Size : ` 1,243.43 Cr. Issuance Details QIB 50 621.72 Issue Open on: 23 January, 2017 Issue Closes on: 25 January, 2017  No of Shares: 1,54,27,197 Fresh Issue - Non-Institutional 15 186.51 Offer for Sale 1,54,27,197 Retail 35 435.20 Total 100 1,243.43

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