Energy Sector – Announcements in Budget 2017
- Basic Custom Duty on LNG reduced to 2.5% from 5%.
- Strategic crude reserves in 2nd Phase at Odisha and Rajasthan shall take up 15.3 MMT
- Additional 20 GWs for Solar Scheme
- 5000 stations to be fed from solar power
- 100% village electrification by 1st May, 2018
- Chandigarh and 8 other Districts of Haryana declared Kerosene free
- MAT to be carried forward to 15 years from 10 years shall give thrust to Captive Power Plants and Renewable Capacity Addition
- Corporate tax rate for smaller companies of income up to INR 50 Crore reduced to 25% from 30%, which opens up opportunity for fresh investments in energy projects
- GST shall see reaching out to industry and roll out from 1st April, 2017
- No bracket changes in Excise and Custom Duty as these shall be replaced by GST
Railways – Announcements in Budget 2017
- Capital Expenditure for FY 2017-18 stands at INR 1,31,000 Crore
- Budgetary allocation of INR 55,000 Crore for FY 2017-18
- Rail Safety fund of INR 1 Lakh Crore to be created over 5 years
- Focus on Swacchh Railways
- Throughput 10% improvement in next 3 years
- 3,000 km of new railway lines to be commissioned in FY 2017-18
- 5000 stations to be fed from solar power
- All trains to be fitted with bio toilets by 2019
- Service Charge from IRCTC withdrawn
- Tariff shall be determined on the basis of quality of service and other modes of transportation costs
- New Metro Rail Act will be announced, to open up greater private participation in the sector
- Railways will implement end-to-end transport solutions for certain logistics
- 500 stations to be made disabled friendly by providing lifts and escalators
- 25 stations to be re developed in FY 2017-18
Infrastructure – Announcements in Budget 2017
- Total length of roads built from 2014-15 is about 1,40,000 km higher than previous 3 years
- Budgetary allocation for National Highways INR 64,000 Crore
- INR 2000 Crore announced for Coastal Road connectivity – essentially to enhance connectivity to ports and coastal villages
- Roads commissioned under Pradhan Mantri Gram Sadak Yojana (PMGSY) 14,000 km from FY 2014-15 to present
- Construction of roads under PMGSY accelerated to 133 km/day in FY 2016-17 against 71 km/day from 2011-14.
- Multi Modal logistic parks to be set up
- Airports in Tier-2 cities to be developed under PPP mode
- Total budgetary allocation for Transport sector (Airport/Shipping) stands at INR 2,47,387 Crore
- New Optic Fibre cable line of 1,55,000 km, budgetary allocation to Bharat Net of INR 10,000 Crore
- Total Infrastructure Budgetary allocation for FY 2017-18 stands at INR 3,96,135 Crore
Agriculture and Farmers Welfare – Announcements in Budget 2017
- Agriculture sector expected to grow @ 4% in FY 2017-18
- Dairy Processing Infra Fund will be created with corpus of INR 8,000 Crore in three years with the help of NABARD
- Assistance of upto INR 75 Lakh for cleaning and packaging of farmer products
- Agriculture expenditure targeted at INR 10 Lakh Crore
- Focus on Credit agriculture disbursements
- Fasal Bima Yojana will be increased from 30% to 40% in FY 2017-18 and 50% in FY 2018-19
- INR 13,420 Crores to settle farmers’ arrear claims
- 40% loans through co operative structure
- Model Law to be enacted for contract farming
- Dedicated micro irrigation fund will be set up by NABARD to achieve goal of “Per Drop More Crop” with an initial corpus of INR 5000 Crore
- Highest ever allocation to MGNREGA stands at INR 48,000 Crore for FY 2017-18
- 100% village electrification by 1st May, 2018
- Swacchh Bharat Mission: Sanitation in rural increased from 42% to 60% in FY 2016-17
- Allocation to Rural, Agricultural and Allied sectors is 24% higher than last FY
Education and Skill Development Sector – Announcements in Budget 2017
- The budget estimates for the education sector have been pegged at INR 79,685 Crore for FY 2017-18
- Setting up of two new All India Institute of Medical Sciences (AIIMS) in Jharkhand and Gujarat
- Innovation fund for education at primary levels
- A new platform “SWAYAM” will be launched
- Budgetary allocation for SWAYAM stands at INR 4500 Crore
- Propose to leverage ICT with the launch of “Swayam” platform which has 350 free courses
- Government to promote Pradhan Mantri Kaushal Kendra to 600 districts and will set up centers
- Setting up of 100 international skill centers in FY 2017-18
- Government to undertake reforms in the UGC, and shall identify colleges on basis of ranking and accordingly, give autonomous status
- A National Testing Agency will be established as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions. This would free CBSE, AICTE and other premier institutions from these administrative responsibilities so that they can focus more on academics
- An innovation fund for Secondary education will be created to encourage local innovation for ensuring universal access, gender parity and quality improvement. This will include ICT-enabled learning transformation. The focus will be on 3,479 educationally backward blocks
- Launch of Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) at a cost of INR 4,000 Crore
- The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will be launched in 2017-18 at a cost of INR 2,200 Crore
- Five Special Tourism Zones, anchored on SPVs, will be set up in partnership with the states
Financial Proposals – Announcements in Budget 2017
- Existing rate of tax for individuals with income between INR 2.5 and INR 5 Lakh would be reduced to 5% from 10%
- All other categories of tax payers in subsequent brackets will get a benefit of INR 12,500
- 10% surcharge shall be levied on individual with income between INR 50 Lakh and 1 Crore
- The surcharge of 15% on income above 1 Crore shall continue
- There would be no scrutiny by the government for the persons filing IT returns for the first time
- Single page submission of IT return for those with an annual income of INR 5 Lakh
- Capital Gain tax liability to be reduced by moving base year to 2001 instead of 1981
- ECB borrowings to extend till March, 2020
- MAT is levied on Advanced Tax. Phasing out of MAT will be possible from 7 to 10 years time. MAT would be carried forward to 15 years from existing 10 years
- Corporate Tax rate to be 25%for smaller companies with income up to INR 50 Crore
- Custom and Central Excise duty reduced
- No transaction above INR 3 Lakh is permissible in cash
- FIPB Abolished
- FDI liberalisation in future
- Integrated Oil and Gas major to match up with global companies
- ETF diversion for CPSE’s
- Capitalisation of Non Performing Assets (NPAs) to be done
- Lending target under PMLY doubled to INR 2.44 Lakh Crore
- AADHAR based POS by Banks
- Financial Inclusion fund to be set up by government
- Payment Regulatory Board to be setup in RBI
- Negotiable Lending Act to be amended
- Confiscation of holdings of defaulters to be encouraged
Defence – Announcements in Budget 2017
- Budget Outlay for Defence sector pegged at INR 2,74,114 Crore for FY 2017-18 excluding pensions
- The budget outlay includes INR 86,488 Crore for defence capital
- The allocation is about 12.78% of the total government expenditure of INR 21.47 Lakh Crore
- Creation of web based interactive pension distribution system for defence pensioners
- Centralised defence travel system for defence personnel’s to book tickets online
Political Funding Transparency – Announcements in Budget 2017
- Maximum Cash donation for political parties from a single source to be INR 2000
- Political Parties are entitled to receive payments in cheques or digital modes and Electoral bonds by RBI
- Filing of tax returns by political parties under IT Act
Will electricity duty (ED) shall be removed upon power generation and distribution sectors in India Budget 2017?
Indian power sector witnesses a cascade of taxation regime with intermittent taxes applicable at concurrent levels which is also proving detrimental in the organic growth of the segment. In this regard the power sector expectations are clear to witness GST as an envelope tax applicable for all transactions in the segment. This apart from other concurrent taxes shall see electricity duty being waived off upon both power generation and consumption, marking relief for the gencos and consumers alike with a reduced cost of electricity. However, the revenue of discoms shall be affected which means further struggle for the cash strapped utilities if the electricity duty is removed. Also, this shall demand a new credit structure for power sector in the country. To be updated upon the key budgetary expectation of sectors like energy & infrastructure, please keep visiting this space. #BUDGET 2017 #eninconIndiaBudget2017.
Corporate Tax Rate likely to be slashed to 25% in BUDGET 2017; will it be able to attract more investments in the country?
The Corporate Tax Rate is likely to slashed from 30% to 25% in the upcoming budget 2017 and is most likely to be the biggest boon in driving multitude of investments in the country as per the industry participants. Though, being a certain step in elevating the interests of investors more in the country the lowering of corporate tax shall still be far from being the biggest driver of investments as other constraints also need primary attention from Government viz. the regulatory barriers. Also, if compared with other growing Asian economies the rate of corporate tax shall still be higher by a quantum of 5-10% which might not spring the FDI by great levels, however the domestic investments shall witness a high.
Through bringing down the CTR the Government is most likely to willfully apply volume based strategy as the loss in taxation revenue due to revised rates is expected to turn green by envisaging more investments in the country. Overall the only thing with assurance could be claimed is the domestic investment levels shall increase which is good for Indian economy. For more updates upon CTR keep looking #eninconIndiaBudget2017. #Budget2017.
Will India witness an exemption on import duty on LNG? What impact will it have if the exemption is mandated in the BUDGET 2017-18?
LNG business in India has gained momentum in past of couple of years given the demand rise in the country for natural gas coupled with Government’s positive intent to felicitate the end consumer with sufficient gas. Moreover the with India’s drive to be a gas based economy the quantum of LNG imports is slated to increase by the double the current levels in coming five years which shall mean GoI has to declare some incentives for the sector & in this regard the industry opines that exemption of import duty will be a great boon for the participants. Currently, India promotes duty free import is allowed for LNG if it is used for electricity production and public distribution and on the other side LNG consumption in other pivotal consuming sectors like that of fertilizers, LPG, CNG, PNG and petrochemicals business attract an import duty of 5 per cent which proves a dampener for these sectors.
The impact of promoting duty free LNG shall embolden the move of GoI to be gas based economy coupled with the lower pollution rate in the country with key consuming sectors getting direct benefit which is bound to lay a positive outcome for the end consumers and common citizens. Seems in its most likelihood the exemption for key consuming sectors shall be applicable in the upcoming #Budget 2017. Watch out for more updates and keep following #eninconIndiaBudget2017.
Union Budget 2017-18
The Union Budget 2017-18 (Union Budget) is certain to move away from conventions in many ways, for being the Indian Railways Budget shall be merged with it in as a part for the first time in history. Another departure from conventional processes being followed is moving away from the plan and non-plan expenditure which again is for the maiden time attempted.
With GST round the corner and ambiguity surrounding its application time is ascertain to raise the mercury in the winter laid budget for especially the energy sector with oil & gas industry curious to learn the status of application of the bracket tax regime. Also, for the conventional thermal power plants the Budget can be a game changer courtesy the capacity additions through UMPPs which skipped a mention in the last edition.
The aftershock of demonetization for infrastructure sector shall also be a keen observation point in the Union Budget 2017-18. With fresh views and complete coverage round-up our dedicated micro-site upon the Budget shall prove to be a one-stop for all regarding the energy & infrastructure is concerned. Watch out this space to be updated upon BUDGET 2016-17 for not being updated is being out-dated.
Catch all the updates and built-up and keep a tab on our pre-budget polls and analysis here and follow us on #eninconIndiaBudget2017 .