Highlights of India’s 2017 Union Budget

    View Authors February 2017
    On 1 February 2017, India’s finance minister, Arun Jaitley, presented India’s Union Budget for 2017 with the theme “Transform, Energise and Clean India”. This budget was unique because it changed the tradition of being presented on the last day of February and, for the first time in independent India, the railway budget was combined with the union budget. However, what was perhaps more unique was that the budget was presented in the wake of tumultuous domestic and international developments. 

    On the domestic side, an amendment to India’s constitution has paved the way for a long-awaited and transformational goods and services tax (GST), while the radical move to demonetize large currency notes has caused disruption by slowing down demand and consumption. On the international front, Brexit and the US elections herald signs of increasing protectionism in developed markets for people, goods and services. Against this backdrop, India’s economic survey for 2017, prepared by chief economic adviser Arvind Subramanian, projected GDP growth for 2017-18 between 6.75% and 7.5%.

    In his budget speech, Arun Jaitley has vowed prudent fiscal management, while raising the 2017/18 federal deficit target to 3.2% of gross domestic product (GDP) to meet his spending promises. Jaitley called India “an engine of global growth”, but highlighted risks to its economic outlook from likely US interest rate hikes, rising oil prices and signs that globalisation is in retreat. 

    India’s union budget for 2017 has introduced several measures towards the ease of doing business and contains tax reforms aimed at stimulating growth, promoting digitization and transparency, simplifying tax administration, reducing corporate and personal income taxes, and widening the nation’s tax base.