Finance minister Arun Jaitley is presenting the Union Budget for the fiscal year that begins on 1 April on Wednesday. In his fourth budget, Jaitley is widely expected to boost spending and ease the government’s fiscal deficit target as he attempts to accelerate economic growth. Earlier, confusion prevailed in the morning over the budget presentation after a sitting member of Parliament and former minister, E Ahamed, died but the government decided to go ahead as scheduled. Here’s a minute-by-minute account of the budget presentation.
12:58 Stock markets inch higher after budget with the BSE Sensex trading 0.4% higher and the NSE Nifty up 0.33%.
12:57 FM Jaitley ends budget speech.
12:56 FM says net revenue loss in direct tax will be Rs 20,000 crore.
12:55 FM says income tax department using big data to track tax offenders.
12:54 No changes in rates of indirect taxes as they will be subsumed under the GST soon.
12:52 First-time tax return filers not to be subject to scrutiny for the first year, says Jaitley.
12:50 Jaitley proposes 10% surcharge on taxable income in the Rs 50 lakh to Rs 1 crore bracket.
12:48 FM turns to personal income tax now. Individual income tax rates slashed. Those in the Rs 2.5-5 lakh income to be taxed at 5%. Zero tax liability up to income of Rs 3 lakh.
12:47 Time period of revising a tax return reduced to 12 months. Completion of scrutiny assessment reduced to 18 months.
12:46 Foreign portfolio investors (FPIs) of categories 1 and 2 exempted from indirect transfer provisions.
12:45 Jaitley proposes to reduce scope of domestic transfer pricing. Threshold limit for audits increased.
12:44 These reforms will bring greater tranparency in political funding, FM says.
12:42 Political parties can receive donations via cheque or digitally. Electoral bonds to be introduced. Such bonds will be redeemable only in the designated account of the political party.
12:40 FM turns to political funding. Says political parties continue to receive most funding anonymously. Maximum cash donation that a political party can receive from any one source to be Rs 2,000.
12:39 No cash transactions above Rs 3 lakh to be permitted.
12:37 Basic customs duty on LNG halved from 5% to 2.5%.
12:36 MSMEs to get some exemptions. Income tax for companies with turnover of Rs 50 crore reduced to 25%. This should help startups. FM says 96% of Indian companies will benefit.
12:34 Minimum Alternate TAx (MAT) is not being removed. Carry forward allowed for 15 years instead of 10 years at present.
12:32 Concession on withholding tax to foreign bond holders extended.
12:30 FM announces sops for builders who construct houses in the affordable segment. Proposes to make changes in capital gains tax with respect to immovable property. Holding period reduced from three years to two years. Period of indexation also changed. Liability to pay capital gains will arise only in the year a project is completed.
12:29 Rate of growth in advance tax in personal income tax is 34.8% in the last three quarters of this year. FM says this happened due to demonetisation.
12:28 Tax revenue in FY17 will rise 17% for a second year in a row. Net tax revenue of 2013-14 was Rs 11.38 lakh crore.
12:27 FM regales the house with a few more Hindi couplets, MPs have a good laugh.
12:26 Jaitley says post-demonetisaiton, preliminary analysis shows that more than 1 crore accounts got deposits between Rs 2 lakh and Rs 80 lakh.
12:25 FM says lax laws make it possible for people to evade taxes. Says last year Indians bought 1.25 crore cars, though most people don’t pay tax.
12:24 Jaitley says only 99 lakh individuals showed income below the minimum threshold and only 24 lakh show incomes above Rs 10 lakh. Only 76 lakh declare incomes above Rs 5 lakh. Only 1.72 lakh people show income of mroe than Rs 50 lakh.
12:22 FM says even companies under-declare profits.
12:22 FM comes to tax proposals now. Jaitley says direct tax collection not commensurate with income levels in the country and few salaried individuals filing returns.
12:21 Revenue deficit for next year at 1.9%; revenue deficit for this year at 2.1%.
12:20 Budget pegs fiscal deficit for FY18 at 3.2% of GDP. This is higher than the earlier target of 3%. Jaitley says fiscal deficit target for next year will be 3% of GDP.
12:18 Defence expenditure excluding pensions to be Rs 2.74 lakh crore.
12:16 Jaitley turns to fiscal situation. Total expenditure for FY18 to be Rs 21.47 lakh crore. Focus now on revenue and capital expenditure. Increased capital expenditure for FY18 increased 25.4% over the previous year; Rs 4.11 lakh crore to be allocated to states.
12:15 Jaitley says legislative changes to confiscate assets of economic offenders, especially those who have fled the country. Will Mr Vijay Mallya be in some trouble now?
12:13 Jaitley says a two-tier system for government recruitment to be set up, and tribunals to be merged.
12:12 Head post offices to now act as front offices for issuance of passports. Online pension distribution system to be set up for defence personnel.
12:11 Negotiable Instruments Act may soon be amended to settle cheque bounce cases.
12:10 A payment regulatory board to be created in the RBI, says Jaitley.
12:09 All government receipts beyond a certain threshold may soon be mandated digitally, says Jaitley.
12:08 Now FM talks about the push for digital transactions. Says 1.25 crore people have downloaded the BHIM app. Announces a referral bonus scheme for individuals and a cashback scheme for merchants to join BHIM. Aadhaar-based payments app coming soon and 20 lakh Aadhaar-based Point of Sale (PoS) targetted by October, says Jaitley.
12:07 Stand up India scheme to be launched in April, to enable dalit entrepreneurs to set up businesses.
12:05 Lending target for Pradhan Mantri Mudra Yojana doubled to Rs 2.44 lakh crore.
12:04 FM announces Rs 10,000 crore more for bank recapitalisation.
12:03 Jaitley proposes setting up an integrated public sector oil major.
12:03 Revised mechanism to ensure listing of CPSEs. Divestment policy announced in last budget to continue. IRCTC, IRFC and IRCON to be listed on stock exchanges. A new ETF with new CPSE stocks to be launched soon.
12:02 A computer emergency response team for the financial sector to be set up to enhance cyber security.
12:01 Draft bill to curtail illegal deposit schemes to be introduced soon, says Jaitley.
12:00 FM now turns to the financial sector. To abolish Foreign Investment Promotion Board. FM says FIPB can be phased out as most FDI proposals via automatic route.
12:00 Total allocation for infrastructure sector at Rs 3.96 lakh crore, says Jaitley.
11:59 Jaitley says received 250 investment proposals for electronic manufacturing.
11:58 Two more strategic crude oil reserves in Orissa and Bikaner, Rajasthan.
11:57 Now FM comes to natural resources like spectrum, says allocation for Bharat Net at Rs 10,000 crore. Says 1.5 lakh gram panchayats to have high-speed broadband connectivity.
11:56 Select airports in tier-II cities to go into the PPP mode. Budget provides Rs 2.41 lakh crore outlay for the transport sector.
11:55 Now FM comes to roads. Allocation up at Rs 64,000 crore; 2,000 km of coastal connectivity roads.
11:54 Railway tariffs to be fixed keeping various variables in mind. Indian Railways will move to accrual based accounting from 2018-19. New metro rail policy on the anvil.
11:53 Railways to provide end-to-end integrated transport solutions for selected commodities. To provide competitive ticket-booking facility; to withdraw service charge on online tickets.
11:50 Jaitley says to issue guidelines for implementation of rail safety fund. Unmaned crossings to be eliminated by 2020; throughput enhancement target at 10%; at least 25 stations to be re-developed; 500 stations to be made disabled-friendly; single-window redress for all coach-related complaints; 7,000 railway stations to have solar power.
11:48 Now FM comes to railways proposals. Total capital and development spend at Rs 1.31 lakh crore. Gross budgetary support at Rs 55,000 crore. A new fund for passenger safety with a Rs 1 lakh crore corpus over a period of five years.
11:47 Allocations for scheduled castes at Rs 52,400 crore. Allocation for minorities at Rs 4,200 crore. LIC to offer senior citizens an assured pension plan at a guaranteed 8%.
11:46 New rules regarding medical devices to bring down costs. Model Shops and Establishment Act circulated among states.
11:46 Govt has prepared action plan for eliminating measles by 2019 and tuberculosis by 2025: FM
11:45 Says 1.5 lakh health sub-centres will be upgraded. 5,000 more postgraduate medical seats. Two new AIIMS hospitals in Jharkhand and Gujarat.
11:43 Affordable housing to get infrastructure status, says Jaitley. Surplus liquidity with banks due to demonetisation has already resulted in reduced interest rates on home loans.
11:42 And now some provisions for rural women under the “anganwadi” system. Allocation for womens’ schemes up at Rs 1.84 lakh crore from Rs 1.56 lakh crore.
11:41 Five special tourism zones to be set up under an SPV model.
11:40 Several new schemes to promote the government’s skills mission. Reforms in UGC to be undertaken for reforms in higher education, says FM.
11:39 An “innovation fund” for educationally backward blocks proposed. Online courses for students on the anvil.
11:38 Jaitley says Prime Minister Narendra Modi’s clean India mission bearing fruit. Says 28,000 habitations will be provided with safe drinking water. Allocation for rural agricultural and allied sector at Rs 1.87 lakh crore.
11:35 Pradhan Mantri Gram Sadak Yojana built 133 km roads as against 73 km earlier. Provided Rs 19,000 crore for this scheme. Together with states, total will be Rs 27,000 crore. One crore houses to be built, allocations for the rural housing scheme increased to Rs 23,000 crore from Rs 15,000 crore last year. Allocations for the National Rural Livelihood Mission also increased.
11:33 Jaitley comes to rural jobs scheme MNREGA, talks about drought proofing of gram panchayats and women participation. Says MNREGA allocation at Rs 48,000 crore for FY18. Jaitley says MGNREGA allocation hiked from Rs 38,000 crore to Rs 48,000 crore, highest ever allocation to the scheme.
11:30 Model law on contract farming to be prepared. Dairy processing infrastructure fund to be created to modernise dairies with initial corpus of Rs 8,000 crore.
11:29 Says NABARD will set up a Rs 5,000-crore fund for better crop yields. Says states will be asked to denotify perishables from the Agricultural Produce Marketing Committees (APMC).
11:27 Jaitley says the government will support NABARD with computerisation. Says the crop insurance scheme’s coverage will be increased from 30% to 40% this year and to 50% next year. Says sum insured “more than doubled”. Says the government will help set up 100 mini-labs for soil health.
11:26 Jaitley says budget proposals will have 10 distinct themes. Farmers, rural population, youth, poor and underprivileged, financial sector, digital economy, public service, prudent fiscal management, tax administraiton “honouring the honest”.
11:25 Jaitley says farm growth will likely be 4.1% in 2016-17. Says farm credit target fixed at Rs 10 lakh crore. Says adequate credit will be given to underserved areas.
11:23 FM does away with plan, non-plan classification of expenditure. Jaitley says the agenda is to “transform, energise and clean” India.
11:22 He calls the merger of the railway budget a “historic step” but says the transporter’s functional autonomy will continue.
11:21 Jaitley comes to reforms now. Says bringing the budget presentation forward will help departments when it comes to allocations.
11:21 Focus to spend more in rural areas. Expect a pro “aam aadmi” budget, if the FM’s pronouncements are anything to go by.
11:20 Jaitley says pace of remonetisation has picked up and “will soon reach comfprtable levels”. Says surplus liquity will lower borrowing cost.
11:18 FM quotes Mahatma Gandhi on demonetisation – “a right cause never fails”. Regales the house with a Hindi couplet.
11:17 Jaitley says demonetisation will generate long-term benefits and will lead to higher tax revenues. Says “early evidence” that banks can bring down interest rates.
11:16 Jaitley mentions the GST and demonetisation. Says demonetisation has been a “bold and decisive” measure. For many decades tax evasion was a way of life for many, he says, adding that demonetisation seeks “to create a new normal”.
11:15 Jaitley says the IMF expects India to be one of the fastest-growing major economies. India is now the sixth-largest manufacturing country in the world, up from the ninth spot.
11:14 Jaitley says CPI inflation expected to remain within limits. The current account deficit narrowed while FDI rose 36%. India has forex reserves to cover for 12 months of imports.
11:13 Budget in the face of global headwinds, says Jaitley. The third major challenge is protectionism, referring to the policies of the Trump administration in the US.
11:12 Jaitley says the current monetary stance of the US Federal Reserve is a challenege for emerging economies. Rising crude prices is another challenge, he says.
11:11 Jaitley makes all the right noises–farmers, workers and the unemployed. Says macro policy is expected to be expansionary in large economies.
11:10 Jaitley says inflation, which was in double digits, has been controlled. Mentions the “war against black money”.
11:09 Finance minister Jaitley begins his speech. Jaitley says the Narendra Modi government was elected with huge expectations. He says the government wants to bring about a “transformative shift” in the way the country is governed.
11:07 Speaker Mahajan unwilling to budge. We will show respect to the late MP tomorrow, she says.
11:06 Congress leader in the Lok Sabha, Mallikarjun Kharge, makes an interjection and demands that the budget be presented tomorrow.
11:05 Lok Sabha speaker Sumitra Mahajan says the budget being a “constitutional obligation” will be presented as scheduled today.
11:04 Opposition members now arguing with the speaker on whether the budget should be presented.
11:00 The Lok Sabha’s proceedings begin, first with an obituary reference to former union minister E Ahmad, who died earlier today. Jaitley is expected to begin his budget speech soon after the obituary references.
10:56 Another big policy move Jaitley will factor in is the Goods and Services Tax, which is likely to be implemented from 1 July, although it still needs to clear legislative hurdles. Speculation is rife that he may align service tax rates in line with the final GST rates.
10:55 Meanwhile, minutes before the budget, the markets are just about holding up, with the BSE Sensex the NSE Nifty barely in the green. Several stocks including Maruti Suzuki and Crompton Greaves are at 52-week highs, just ahead of the budget. Expect PSU stocks, housing finance companies, auto stocks and IT companies to move.
10:54 One big metric to watch out for will be the fiscal deficit number, and whether the government will stick to its target for the near term.
10:52 The budget comes not just in the wake of demonetisation, but also just before elections in key states including Uttar Pradesh, Punjab and Goa.
10:48 Watch out for these four things in the budget–infra push and public spending, social sector spends, jobs and moves to push consumption.
10:45 There will be two firsts this time. One, the budget is being presented on the first day of February instead of the last day of the month, as has been the norm. Second, the railway budget will be presented along with the general budget after more than 90 years of being presented separately.
10:40 Lots of speculation on what Jaitley may announce on direct taxes. Media reports have said that personal income tax slabs could be tinkered with and that corporate tax rates could be reduced.
10.34 Budget on track, to be presented at 11am, Jaitley confirms on Twitter.
10:30 While the budget is yet to be tabled, the finance ministry appears to have updated the tax filing website to include the Banking Cash Transaction Tax and Fringe Benefits Tax. This has set off rumours that a banking transaction tax will be announced on cash withdrawals.
10:20 Stock markets trade flat ahead of the budget presentation.
10:00 Finance minister Arun Jaitley reaches Parliament.
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