The Prime Minister's announcement of the withdrawal of ?1000 and ?500 notes ranks amongst the most significant economic measures taken by his government. The audacious move has given birth to hopes of a decisive blow to the black economy, terrorism and counterfeit currency. It is also being lauded for its potential to convert India into a cashless economy. The backdrop to the Budget was a fairly volatile past few months with multiple issues such as (a) demonetisation; (b) ambiguities on indirect transfer taxes; (c) treaty changes to India-Mauritius Treaty etc.
Union finance minister Arun Jaitley stepped into Parliament on February 1, 2017, unveiled India’s first post demonetisation Budget. Many people have questioned if this move is the biggest disruption for electronic payments in 2016. Remonetisation has made a difference to the situation on the ground in the recent months with cash being inducted back into the system easing the pain and discomfort associated with missing cash for large segments of a cash-dependent population.
“It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from small shops to consumers is pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital. Payments,” said Sharma highlighting that the focus of this budget was the digitisation of the Indian economy.
The Budget announcements by finance minister Arun Jaitley clearly reflect Modi’s confidence that the aam aadmi would support the “bigger moral purpose” behind demonetisation, which now guides various policy measures aimed at “cleansing the economy”.
Among the many firsts that the Union Budget 2017 has been associated with, policy and budget measures to construct a digital economy stand out as original and groundbreaking, especially for a growing economy with tremendous competition for financial resource allocations in the sectors of poverty alleviation, education, infrastructure development, health, etc.Focusing on “Digital Economy every person from small shops to consumers is pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments,” The BHIM app has been launched. It will unleash the power of mobile phones for digital payments and financial inclusion.Affordable housing, spending on rural areas, infrastructure and fighting poverty are noteworthy steps. The two big economic efforts of the Budget were towards housing and a tax break for Micro and Small Medium Enterprises (MSMEs).
Many have damned the Union Budget 2017-18 with faint praise: “Workmanlike”, “conservative”, “middle of the road”, “does no harm”, “please-all” and so on. Calling the Budget “mildly growth supportive,” rating agency Crisil notes: “The Union Budget 2017 has performed a balancing act.
Prime Minister Modi’s attempt to formalize the economy through the Goods and Services Tax and the demonetization drive, could be the only solution to India’s jobs problem. Undoubtedly GST and demonetization will go a long way in creating jobs but Budget 2017 may have failed to remove the regulatory hurdles that hamper creation of jobs, especially in the education sector, according to some expert.
The compiled book entitled ‘Post Demonetisation Budget-2017- Expectations, Apprehensions and Reality’ presents in-depth analysis, insights and key highlights from experts. For convenience of readers the book is divided into the following chapters.Chapter-1: Expectations from Budget-2017, Chapter-2: Economic Survey 2017, Chapter-3: Budget-2017-Opening Speech of President of India, Chapter-4: Fiscal Issues and Chapter-5: Union Budget 2017. It is expected that the book with latest information about post demonization budget will generate interest among interested readers.
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