[Union Minister for Finance and Corporate Affairs Arun Jaitley arrives at Parliament House to present the General Budget 2017-18, in New Delhi on February 01, 2017.]
New Delhi: Union Finance Minister Arun Jaitley on Wednesday started his budget speech amid protests from Congress members who were demanding adjournment of the proceedings for the day due to the death of sitting member E. Ahamed.
Arun Jaitley whil present the budget said that the drop in economic activity due to demonetisation was only transient and its effect would not spill over to the next financial year.
"Demonetisation has a strong potential to generate long-term benefits in terms of increased flow of financial savings and greater formalisation of economy," Jaitley said here while presenting the Union Budget 2017-18 in the Lok Sabha.
"The effects of demonetisation are not expected to spill over to the next year. We firmly believe that demonetisation and Goods and Services Tax (GST) will have an epic impact on the lives of people," he added.
The Economic Survey, released on Tuesday, took into account the possible fallout of demonetisation of high value currency, and sharply cut the GDP growth for 2016-17 to 6.5 per cent, from 7.6 per cent last financial year.
The growth is likely to return to trend in 2017-18, following a temporary decline in 2016-17, said the Survey, while predicting the GDP to expand by 6.75-7.5 per cent in the next fiscal.
Demonetisation was a bold and decisive strike in a series of measures to arrive at a new normal of bigger, cleaner and real GDP, Jaitley said.
The measure helps transfer resources from tax evaders to the government and there is early evidence of it in the increased capacity of banks to lend, Jaitley said.
"Suplus liquidity will also lower the borrowing cost," the Finance Minister said.
"We are moving from informal to formal economy and the government is now seen as a trusted custodian of public money," he added.
The Finance Minister said that tax evasion had become a way of life and had bred a parallel economy, which demonetisation aimed to change.
As soon as the House met for the day, Speaker Sumitra Mahajan led the house in paying tributes to Ahamed who died early on Wednesday morning following cardiac arrest. The House observed a two-minute silence to pay respects to Ahamed.
Mahajan said that presentation of Budget was a constitutional obligation and President Pranab Mukherjee had specifically fixed Feb 1 as the day for Budget presentation.
She said the House would be adjourned on Thursday as a mark of respect to Ahamed.
Congress member Mallikarjun Kharge, however, urged her to adjourn the House for the day and said Ahamed was a senior leader.
"E. Ahamed was a Member of Parliament and he was on duty; he collapsed during the joint session of the Parliament. He was taken to hospital and he was declared dead in hospital," the Congress leader said.
The Speaker said that she had already explained the position and asked Jaitley to go ahead with presentation of the Budget.
As Jaitley started speaking, the Congress members protested.
Ahamed, 78, was an Indian Union Muslim League leader elected to the house from Mallapuram. He was Minister of State for External Affairs in the UPA government.
Following are budget higlights:
- Political parties can receive donation in cash only up to Rs 2000
- Customs duty on LNG halved to 2.5 pc
- Tax rate for individual earning of Rs 2.5-5 lakh reduced to 5%
- Payment regulatory board to be set up in RBI to regulate electronic payments, replacing Board for Regulation and Supervision in Payments and Settlements System.
- More than 2000 rupees political parties can receive donations through cheque and in electronic mode
- Five special tourism zones anchored on SPV (Special purpose vehicle) will be set up in partnership with the states
- Increase in the allocation for Pradhan Mantri Awas Yojana (PMAY) Gramin to Rs 23,000 crore for the next fiscal
- Rs 10,000 crore allocation for laying optic fibre cables
- To set up Dairy Processing Infrastructure Fund under Nabard, with corpus of Rs 8,000 crore
- 100 per cent electrification of villages by May 2019 and majorly hiking the MNREGA fund
- Creation of a Railway Safety Fund of Rs one lakh crore over a period of five years
- Plan to create a dedicated micro irrigation fund with initial amount of Rs 5,000 crore under the National Bank for Agriculture and Rural Development (Nabard)
- Firmly believe that GST, demonetisation, built on JAM, will have an epoch-making impact on the lives of our people
- Demonetisation aims to create a new normal, where the GDP would be bigger, cleaner and real
- Recalls #MahatmaGandhi's words: A right cause never fails
- 3 challenges in current global scenario:Monetary stance of US FED Reserve, Commodity prices specially crude oil & retreat from globalisation
- We have moved from a discretionary administration to a policy-based administration
- Expectations included burning issues like inflation and price rise, issue of corruption & crony capitalism
- Our government was elected amidst huge expectations of people, the underlying theme of expectations being good governance
- Hope to resolve all issues regarding GST via consultations
- We are moving from informal to formal economy & the Government is now seen as a trusted custodian of public money
- Merger of Railway Budget with Budget 2017 a historic step
- Transform, Energize and Clean India - #TECIndia - our agenda for the next year
- Advancement of budget will enable all ministries, departments to operationalize all schemes right from beginning of next fiscal
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