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The System of Union Budget in India

As authorized by Article 112 of the Indian Constitution, Union Budget in India is an Annual Fiscal Statement. It is a condensed and coherent statement displaying the economic and financial plans of the Government.

For an employee, Leave Travel Allowance is an amazing tax saving medium. Many corporate companies in India grant LTA which the employee can claim if he/she goes on a vacation after submitting the actual bills for verification. The total amount given as Leave Travel Allowance is free from taxation.

Union Budget in India, 2017

The annual budget for the Financial Year 2017 was presented to the Indian Parliament on 1st February 2017, by the Finance Minister of India, Mr. Arun Jaitley.

As presented, the budget document comprised of:

  • Annual Financial Statement (AFS).
  • Demand for Grants (DG).
  • Appropriation Bill.
  • Finance Bill.
  • Medium Term Fiscal Policy Statement.
  • Expenditure Profile.
  • Expenditure Budget.
  • Macroeconomic Framework for the relevant financial year.
  • Fiscal Policy Strategy Statement for the financial year.
  • Memorandum Explaining the Provisions in the Finance Bill, 2015.
  • Receipts Budget.
  • Even Railway budget was included in the union budget that was presented.

Highlights of the Union Budget put forth by the Finance Minister

Union Budget in India
In Agriculture Sector:

The fiscal budget for the session 2017-18 brought many market reforms in the field of agriculture, with an extended waiver on the loans, increase on the allotment of funds to the crop insurance as well as increase in the amount allocated to National Bank for Agriculture and Rural Development. This initiative by the Indian Government was taken to combat the economic distress in the rural areas.

Some of the points included in the budget are:

  • With 60 days interest waiver, a sum of Rs. 10 lakh crore is allocated to the farmers.
  • NABARD will be provided with the sum of Rs. 40,000 crore.
  • Mini labs for soil testing will be set up by the Government in Krishi Vigyan Kendras.
  • Rupees 2000 crore will be initially allotted to Dairy processing infrastructures.
Agriculture Sector
In Rural Sector:

The Government plans to lower the poverty line and bring more development to the rural sector of the India society. With a budget of more than Rupees 3 lac crores allocated to the rural cause, the union aims to uplift more than 1 crore households out of poverty.

Focusing on the upliftment of rural section of the country, the budget promises:

  • To take measures for increasing the participation of women under MANREGA (Mahatma Gandhi National Rural Employment Guarantee Act) by up to 55%.
  • Doubling the farmers’ income as per MGNREGA.
  • A sum of Rupees 19,000 crore to be allocated for Pradhan Mantri Gram Sadak Yojana, for the financial year 2017-18.
  • Providing electricity to 100% of the rural part of the country.

According to the budget statement, the coverage of Swatch Bharat Mission has since gone up to 60% from 42% in October 2016.

Rural Sector
Union Budget for the Youth of India:

Growing unemployment is a matter of great concern for the Government of India. The fresh Union Budget focuses on creating jobs and providing skills to the youth for the progress of the country.

The government aims to educate every youth with core skills and this is the reason why Union Budget has been initiated to execute the following:

  • Launch STRIVE, a skill strengthening program.
  • Offering more than 350 online courses under SWAYAM.
  • Focusing on 3,479 of educationally backward blocks.
  • Skill India mission to set up 100 India International centers across the country.
  • Taking steps to create 5000 PG seats per annum.
Union Budget for the Poor and Underprivileged:

The Government plans to help uplift underprivileged groups and plans on passing reference to women.

The budget details include:

  • Rupees 1, 33,327 crore allotted to various women welfare schemes.
  • A lump sum of Rupees 500 crores to be invested in Mahila Shakti Kendra.
  • Every Woman under Maternity Benefit Scheme shall be provided with Rupees 6000 each.
  • Measures taken to eliminate leprosy and TB by 2018 and 2025 respectively as well as measures taken to reduce IMR by 2019.
  • A respective sum of Rupees 52,393 crore allotted to SCs, Rupees 31,920 crore to STs and Rupees 4,195 crore to other minorities.
Benefits of Union Budget on the Infrastructure and Railways:

For improving and providing safe travel via railways, the ministry has allotted a budget of Rupees 1, 31,000 crore to Railways, including Rupees 1 lac crore for Raksha coach (for the safety of passengers). The Government had also given ample attention to the development of infrastructure, assigning a sum of Rupees 39, 61,345 crore and another sum of Rupees 64,000 crore for the construction of Highways.

Under this segment, the developments will include:

  • No service charge on tickets booked through IRCTC.
  • From 2,800 km of railway lines last year, 3,500 km of railway lines to be commissioned this year.
  • SMS-based "clean my coach service" introduced.
  • All trains to have bio-toilets by 2019.
  • 500 station for differently abled people to be constructed.
  • High-speed internet to be provided to 1,50,000 gram Panchayats.
  • New Metro rail policy to be announced with new modes of financing.
Financial Sector:

There has been a huge overhaul of the financial sector in accordance with the Finance Bill submitted by Finance Minister.

Some of the key points of the bill included:

  • Abolition of Foreign Investment Promotion Board (FIPB).
  • A cyber security team to be set up in response to computer emergencies.
  • Fostering public accountability by listing PSEs.
  • Pradhan Mantri Mudra Yojna to land a target of Rupees 2.44 trillion.
  • 16,000 new enterprises set up under Stand-Up India Scheme.
  • Pan Card to be given after Aadhar Card.

Apart from the benefits mentioned in the article Union Budget has also made a huge impact on the digital economy of India, providing public services, promoting affordable housing and real estate etc.