Budget 2017 Analysis

Union budget of 2017 acts as a salve for the commons who suffered during the period of demonetisation. It gives relief for the majority of taxpayers by halving the rate of personal income tax and provides a fiscal consolidation path. But Finance Minister Arun Jaitley increased the tax liability of the super-rich and gradually reduced corporate tax rates and phases out exemptions given to small and medium-sized companies.

This budget brought some relief to IT employees, who earns between Rs 2.5lakh and Rs 5 lakh by reducing the personal income rate to 5% from 10%. As per the new proposal, 10% surcharge for those with taxable income between RS 50lakh and Rs 1crore whereas those with above Rs 1crore continue to pay 15% surcharge.However the tax rates for the big corporates remains unchanged.


The main focus of 2017 budget:

  1. Spending in rural areas
  2. Infrastructure development
  3. Poverty alleviation


  • Affordable housing has given ‘’infrastructure status’’.
  • Instead of built up areas, carpet area of 30 and 60 sq. meters will be applicable for affordable housing.



  • The Holding period for capital gains and tax for immovable property has been reduced from 3 years to 2 years.
  • Real estate developers also get tax relief on unsold stock as liability and capital gains can be paid in the year when the project is completed.



  • Highest ever allocation for MNREGA of Rs 48,000 crore
  • Women participation in MGNREGA increased from 48% to 55%
  • 1 crore households and 50,000 Gram Panchayat to be made poverty free by 2019
  • Allocation for Pradhan Mantri Awas Yojana –Gramin increased to Rs 23,000 from Rs 15,000




  • Main focus on Railways, Roads and Rivers
  • Total allocation: Rs 3,96,135 crores


  • Total capital and development expenditure : Rs 1,31,000 crores
  • As part of Accounting Reforms, accrual based financial statements to be enrolled by March 2019
  • Shares railway PSEs like IRCTC, IRFC, and IRCON will be listed in  the stock exchange
  • Service charge on e-tickets booked through IRCTC withdrawn
  • Tariffs fixed, taking into consideration costs, quality of service and competition from other form of transports


  • Allocation for highways : Rs 64,900 crore
  • Total length of roads built from 2014-2015 till current year is 1,40,000kms


  • No transaction is permitted above Rs 3 lakh in cash
  • Setting up of the Payment Regulatory Board in RBI to replace for regulation and supervision of payment and settlement systems


  • Political parties can receive a maximum of Rs 2,000 from a single person which is reduced from Rs 20,000
  • A donor can purchase the issuance of electoral bonds from authorised banks against cheque and digital payment
  • Political parties are asked to file its return within the given time
  • It brings transparency in electoral funding


  • To make MSME viable, income tax cut for companies with annual turnover of up to Rs 50 crore is 25%
  • For startups time period increases at 3 years in the first 7 years of existence


  • Allowance provision increased for non-performing asset from 7.5% to 8.5%
  • Rs 10,000 crore for recapitalisation of banks
  • Fixing a target of Rs 2,44,000 crores under Pradhan Mantri Mudra Yojana


  • Launch of swim platform with 350 online courses, enables students to virtually attend the courses
  • Pradhan Mandri Kaushal Kendras is to be extended up to 600 districts
  • About 100 India Informational Skill Centers to be launched for those who seek job opportunities outside India



  • Senior citizens will be provided Aadhar card mentioning about their health condition
  • Two new AIIMS to come in Jharkhand and in Gujarat
  • 28,000 arsenic and fluoride affected areas to get safe drinking water in next 4 years


  • To double the income of farmers, the allocation to the agricultural sector is about 24% to about Rs 1.78 lakh crores
  • Reforms in the agricultural produce marketing law along with growing coverage of the Pradhan Mandri Fascal Bima Yojana would push the agrarian growth
  • Micro-irrigation fund of Rs 5000 crore with the NABARD.
  • Proposed to set up 688 mini-labs in Kisan Vikas Kendras in the country to give a boost to the reforms in the agriculture sector.
  • e-NAM (National Agriculture Market) would be linked to the commodities market to allow farmers access better prices for their products


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