Budget is an obligation of GoI under article 112, 113, 114(3) and 110(a) of Constitution.
This year the budget has seen three major changes: Rail Budget is merged with the Union Budget; presentation of Budget is preponed by a month; and it has done away with Plan/Non-Plan distinction in its expenditures.
Two major policy changes that precede the budget: Demonetization and passing of GST bill.
At global front, de-globalization tendencies in US and Europe, rising crude oil prices and slow global recovery adds substantially to uncertainty in Indian economy.
On the back of it, this year’s Budget has been presented with an agenda of “TEC India” (i.e.
Transform, Energise and Clean India).
To foster the agenda of TEC India, ten distinct themes have been proposed to be focused upon. These themes mainly targeted the farmers, rural population, youth, poor and underprivileged, infrastructure, financial sector, digital economy, public service, fiscal management and tax administration.
According to the Economic Survey estimates, the adverse impact on GDP of demonetization is in the range of 0.25 to 1 per cent (Many reports are showing the decline in automobile sector as well as in real estate sector).
On the other hand, despite slowdown in GDP growth, tax revenues appear to have increased substantially.
One explanation for this could be after demonetization tax base seems to have widened as tax avoidance and evasion have come down due to increased use of electronic transactions.
As an additional measures, the budget proposed to tax any cash transaction greater than Rs 3 lakh. In longer run, it will promote higher usage of non-cash payments and tax compliance would get better.
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