Finance Minister, Arun Jaitley's Budget comes at a time marked by bold changes in both global politics as well as domestic policies. The theme of this Budget was 'Transform, Energise and Clean India', and has focused on 10 main pillars - farmers, rural population, youth, poor and underprivileged, infrastructure, financial sector, digital economy, public service, prudent fiscal management and tax administration.

It is commendable that a fiscal deficit of 3.2% of the GDP was achieved despite increased spending on the rural economy and infrastructure developments to spur economic growth in the backdrop of demonetisation.

The focus as demonstrated earlier this year, remains the removal of black money and counterfeit currency, digitising the economy and undertaking intrinsic reforms to set India on the path towards holistic growth. Furthermore, the tax administration aims to widen the tax net through 'operation clean money', which intends to bring non-compliant individuals within its ambit.

On the direct tax front, corporate MSMEs with a turnover of less than INR 500 million have been fortunate to get a reduction in the headline tax rate of 25% which will provide them with an opportunity to grow beyond the size of INR 500 million. Salaried persons and middle-class taxpayers who fall within the INR 250,000 to INR 500,000 tax slabs will receive a reduction in the effective tax rate to 5% from 10% earlier. From an indirect tax perspective, only minor reforms were undertaken as the finance minister reiterated the government's commitment towards implementing GST in the next financial year.

Despite the short-term downfall on account of demonetisation, international institutions such as the World Bank and the International Monetary Fund expect India to be amongst the fastest growing major economies in the financial year 2017-18.

For more details on the Union Budget 2017, please click on the link below to read our publication.

Click here to download SKP's Budget 2017-18 Publication

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