Economy has moved on a high growth path. India’s Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17. FDI grew 36% in H1 2016-17 over H1 2015-16, despite 5% reduction in global FDI inflows. Foreign exchange reserves have reached 361 billion US Dollars as on 20th January, 2017
CHALLENGES IN 2017-18
World economy faces considerable uncertainty, in the aftermath of major economic and political developments during the last year.
The US Federal Reserve's , intention to increase policy rates in 2017, may lead to lower capital inflows and higher outflows from the emerging economies
TRANSFORMATIONAL REFORMS IN LAST YEAR
Passage of the Constitution Amendment Bill for GST and the progress for its introduction
Demonetisation of high denomination bank notes
Enactment of the Insolvency and Bankruptcy Code; amendment to the RBI Act for inflation targeting; enactment of the Aadhar bill for disbursement of financial subsidies and benefits.
AGRICULTURE & RURAL SECTOR
Target for agricultural credit in 2017-18 has been fixed at a record level of Rs. 10 lakh crores
Coverage under Fasal Bima Yojana scheme will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and provision Rs. 9000 crore has been made.
Aim to bring one crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019
Pace of construction of PMGSY roads accelerated to 133 km roads per day in 2016-17, against an avg. of 73 km during 2011-2014.
Well on our way to achieving 100% village electrification by 1st May 2018.
For transportation sector as a whole, including rail, roads, shipping, provision of Rs 2,41,387 crores has been made in 2017-18
Railway lines of 3,500 kms will be commissioned in 2017-18.
A new Metro Rail Act will be enacted by rationalising the existing laws. This will facilitate greater private participation and investment in construction and operation
2,000 kms of coastal connectivity roads have been identified for construction and development.
By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats.
Proposed to set up strategic crude oil reserves at 2 more locations in Chandikhole in Odisha and Bikaner in Rajasthan. This will take our strategic reserve capacity to 15.33 MMT
Second phase of Solar Park development to be taken up for additional 20,000 MW capacity
A new and restructured Central scheme with a focus on export infrastructure, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18
125 lakh people have adopted the BHIM app so far. The Government will launch two new schemes to promote the usage of BHIM
A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards
Banks have targeted to introduce additional 10 lakh new POS terminals by March2017. They will be encouraged to introduce 20 lakh Aadhar based POS by September 2017
PRUDENT FISCAL MANAGEMENT
Stepped up allocation for Capital expenditure by 25.4% over the previous year
Fiscal deficit for 2017-18 is targeted at 3.2% of GDP and Government remains committed to achieve 3% in the following year
Revenue Deficit of 2.3% in BE 2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is pegged at 9% , against 2% mandated by the FRBM Act
Expenditure for science and technology is Rs. 37,435 crore
Total allocation for Railways is Rs. 1,31,000 crore
Under the corporate tax, in order to make MSME companies more viable, there is a proposal to reduce tax for small companies with a turnover of up to Rs 50 crore to 25%. About 67 lakh companies fall in this category. Ninety-six % of companies to get this benefit.
The Income Tax Act to be amended to ensure that no transaction above Rs 3 lakh is permitted in cash.
Proposal to have a carry-forward of MAT for 15 years.
HIGHLIGHTS FOR INDUSTRY
Customs Duty reduction of 2.5 % on three critical components (CNC systems, ball screws and linear motion guides), extended to all CNC machine tools under HSS code 8456 to 8463.
Over 20 % increase in capital outlay for Defence amounting to Rs. 86,488 crores in 2017-2018.
Capital outlay for Indian Ordnance Factories budgeted at Rs. 803.68 in 2017-2018.
Capital and development expenditure for Indian Railways pegged at Rs. 1,31,000 crores in 2017-2018.
Capital outlay for machinery and plant in Indian Railways budgeted at Rs. 650.99 crores in 2017-2018.
Launch of next phase of ‘Skill Strengthening for Industrial Value Enhancement’ (STRIVE) with a cost of Rs. 2,200 crores in 2017-2018.
100 India International Skill Centres to be established across the country in 2017-2018. Pradhan Mantri Kaushal Kendras to be extended to more than 600 districts.
Proposal for Innovation fund for secondary education.
Debt-to-GDP ratio to be a principal macro-economic anchor of fiscal policy – set at 60 % for combined Union and State Government by 2023.
Foreign Investment Promotion Board to be abolished in 2017-18 and further liberalisation of FDI policy is under consideration