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Union Budget 2017: Key highlights

Finance minister Arun Jaitley divided his budget proposal into 10 distinct themes: Farmers; rural population; energizing youth; poor and underprivileged; infrastructure; financial sector; digital economy; public service; prudent fiscal management; and tax administration.

Below are the key highlights of finance minister Arun Jaitley’s Union budget speech:

Opening Remarks:

Our government was elected amidst huge expectations; the underlying theme was good governance: Arun Jaitley
Massive war against black money has been launched
Government now seen as a trusted custodian of public money: FM
We will focus on energizing youth to reap benefits of growth
World economy faces considerable uncertainty: FM
Three major challenges for emerging economies: US Federal Reserve’s stance, uncertainty over commodity prices, especially crude prices and signs of increasing retreat from globalization as protectionist fears build up
India stands out as a bright spot
Govt has continued with steady path of fiscal consolidation: FM
We are seen as an engine of global growth: FM
There are two tectonic policy initiatives: GST implementation and demonetization
Demonetization was the continuation of series of measures taken in last two years and was a bold and decisive measure
Demonetization seeks to create a new normal where GDP would be cleaner and bigger
Drop in economic activity due to remonetization is expected to have only a transient effect
Demonetization has strong potential to generate long-term benefits
Demonetization helps to transfer resources from tax evaders to govt
Firmly believe demonetization and GST will have epoch-making impact
Pace of remonetization will soon reach comfortable levels; effect of demonetization not expected to spill over into next year
Surplus liquidity in banking system will raise access to credit, leading to multiplier effect on economic activity: FM
Overall approach in budget to spend more in rural areas
Budget 2017-18 contains 3 major reforms: advancement of date of presentation, merger of railway budget with general budget, abolition of Plan and non-Plan expenditure

Infrastructure:

Total capex and development expenditure of railways pegged at Rs1.31 trillion
Railways: Passenger safety—Safety fund corpus set up; unmanned level crossings to be eliminated by 2020
Railway lines of 3,500km to be commissioned
To launch dedicated tourism/pilgrimage trains
500 stations to be made differently-abled friendly
Cleanliness in railways: To introduce Coach Mitra facility; By 2019, biotoilets for all coaches
Railways to offer competitive ticket-booking facility; service charge withdrawn for tickets booked on IRCTC
New metro rail policy to be announced
Roads sector: Allocation for national highways at Rs. 64,000 crore
Airports Authority of India Act to be amended to enable monetization of land resources
Total allocation to transport sector at Rs. 2 trillion
Telecom sector: Allocation to Bharat Net programme at Rs. 10,000 crore
Digi-gau initiative to be launched
To make India global hub for electronics manufacture
Export infra: New restructured central scheme to be launched
Total allocation for infrastructure: Rs. 3.96 trillion

Financial Sector:

Foreign Investment Promotion Board (FIPB) to be abolished
Commodities market: panel to study legal framework for spot and derivative markets
Resolution mechanism for financial firms
Cyber-security: Computer emergency response team to be set up
Listing of PSEs will foster public accountability; revised mechanism for time-bound listing
To create integrated public sector oil major
New ETF to be launched
Pradhan Mantri Mudra Yojana: Lending target at Rs2.44 trillion
Stand-up India scheme: over 16,000 new enterprises have been set up

Digital Economy:

India at cusp of massive digital revolution
Govt. to launch two new schemes to promote BHIM app, including cashback scheme for merchants
Aadhaar Pay to be launched for people who don’t have mobile phones
Focus on rural and semi-urban areas
To strengthen financial inclusion fund
Panel on digital payments has recommended structural reforms
To create payment regulatory board at RBI

Public Services:

To use head post-office for passport services
Defence: centralized defence travel system developed
Defence: Centralized pension distribution system to be established
Govt. recruitment: To introduce two-tier exam system
Govt. looks to introduce laws to confiscate assets of economic defaulters
High-level panel chaired by PM to commemorate Mahatma Gandhi’s 150th birth anniversary

Fiscal Management:

Total budget expenditure: Rs. 21 trillion
Rs. 3,000 crore to implement various budget announcements
Defence expenditure excluding pensions: Rs. 2.74 trillion
Consolidated outcome budget for all ministries being created
Fiscal deficit for FY18 pegged at 3.2% of GDP
Revenue deficit for FY18 at 1.9%

Tax Administration:

Direct tax collection not commensurate with income/expenditure pattern of India
We are largely a tax non-compliant society; predominance of cash in society enables tax evasion
After demonetization, data received will increase tax net
Black money: No cash transactions above Rs. 3 lakh
Transparency in political funding: Parties continue to receive anonymous donations; propose system of cleaning up
Political funding: Maximum amount of cash donation that can be received is Rs2,000; political parties can receive donations by cheques or digitally; amendment proposed to RBI Act to issue electoral bonds; every party has to file returns within specified time
Personal income tax: Rate reduced to 5% for income bracket of Rs2.5-5 lakh; All other categories to get uniform benefit of Rs12,500 per person; to levy surcharge on income bracket Rs50 lakh-Rs1 crore
Personal income tax: To have simple one-page form for taxable income up to Rs5 lakh
GST: preparedness of IT system on schedule
Not many changes to excise duties since GST will be implemented soon
FPI category 1 and 2 investors exempted from indirect transfer provisions
Time period of revising tax returns reduced to 12 months
Real estate: to make changes in capital gains tax
Concessional withholding rate will be extended to 30 June 2020, rupee-denominated masala bonds to be included
MAT not to be abolished at present; to allow carry-forward for 15 years
Corporate tax rate: MSMEs’ rate (annual turnover less than Rs50crore) reduced to 25%
LNG: Reduce customs duty to 2.5%
Limit of cash donation for charitable trusts cut to Rs. 2,000.

Agriculture:

Farmer credit fixed at record level of Rs10 trillion; will ensure adequate flow to underserved areas
Soil health cards: Govt to set up mini-labs in Krishi Vigyan Kendras
Long-term irrigation fund in NABARD—corpus at Rs40,000 crore
Model law on contract farming to be circulated
Dairy processing infra fund with corpus of Rs8,000 crore
Dedicated micro-irrigation fund with Rs5,000 crore corpus

Rural Population:

Mission Antyodaya to bring 1 crore households of poverty
MGNREGA: Rs48,000 crore has been allocated; participation of women now at 55%; using space technology in a big way
Prime Minister Gram Sadak Yojana: Rs19,000 crore allocated; along with states, Rs27,000 crore will be spent in FY18
Pradhan Mantri Awas Yojana: Rs23,000 crore allocated
100% village electrification by May 2018
Rural livelihood mission: Rs4,500 crore allocated
Mason training to be provided for 5 lakh people
Panchayat Raj: Human resource reform programme to be launched
Rs. 187,223 crore allocated for rural programmes

Education and Others:

Education: System of measuring annual learning outcomes, emphasis on science
Innovation fund for secondary education
Reforms in UGC: Colleges to be identified based on ranking and given more autonomy
Propose to leverage information technology with launch of SWAYAM platform for virtual learning
National testing agency to be established for all entrance exams, freeing up CBSE, AICTE and other bodies
100 Indian international skill centres to be established with courses in foreign languages
Rs. 4,000 crore allocated to launch skill acquisition and knowledge awareness
Special scheme for creating employment in leather/footwear sector
Tourism: Five special zones to be set up
Women: Mahila Shakti Kendras with Rs500 crore corpus
Stepped up allocation to Rs. 1.84 trillion for various schemes for women and children
Affordable housing to be given infrastructure status
Action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 in 2019
To create additional PG medical seats per annum
Two new AIIMS in Jharkhand and Gujarat
New rules to be introduced for medical devices
Labour rights: Legislative reforms to simplify and amalgamate existing labour laws
Allocation to SCs increased to Rs. 52,393 crore; STs given Rs. 31,920 crore, minority affairs allocated Rs. 4,195 crore
Senior citizens: Aadhaar-based smart cards with health details to be provided

Virginia Mining Resources would be closely tracking the developments on the subject and other events in the mining & resource sector and bringing you the same.
(Source - Assorted with inputs from PTI)

The National Green Tribunal (NGT) wants to reduce pollution from power plants but the other concerned agencies — coal companies, Mahagenco and Maharashtra Pollution Control Board (MPCB) — don't seem to be showing much interest in the matter.

A Right to Information (RTI) query shows that Koradi and Khaparkheda power plants continue to get high ash content coal even after NGT issued a directive on October 15, 2015. Data obtained by activist Anil Wadpalliwar shows that in November 2015, the average ash content in the coal received by Koradi power plant was 41.50%. This was up from 38.34% in August last year. Officials of Khaparkheda plant did not provide an average figure in the reply but the data provided shows that coal companies continue to supply coal with over 40% ash content.

Western Coalfields Limited (WCL) spokesperson MK Singh said that conceptual planning of washing coal had been done but added that there was not much physical progress on the front. It is not WCL alone which is the culprit, but the other coal companies too supply substandard coal. Neither Mahagenco managing director Bipin Shrimali nor its spokespersons could be contacted despite repeated attempts. On earlier occasion the company officials had said that they were helpless as government coal companies had a monopoly over supply of coal.

MPCB, which has been asked by NGT to ensure that power plants get clean coal, has only issued notices to Mahagenco and WCL asking them to use good quality coal. It has not bothered to take any concrete steps. MPCB regional officer Anil Mohekar said that he had sent a proposal to the head office to sanction coal testing facility in Nagpur laboratory. "We have got the coal supplied to Mahagenco from other government agencies. We will share the results and our plan of action with NGT," he said.

Wadpalliwar charged all these agencies with playing with lives of Nagpurians. "The generation capacity of Koradi plant is going to increase by another 1,300MW. This means increase in power plant emissions to an unprecedented level. MPCB closes down industries if they pollute but when it comes to power plants they develop cold feet. What is a common citizen supposed to do," he asked.

The activist said that if MPCB did not take action on coal companies and Mahagenco soon then he would file a contempt petition in NGT. "I will also explore the option of filing a police complaint against MPCB, WCL and Mahagenco," he told TOI.

(Source: TOI, Jan 16, 2016 )

After 40 years long time India is getting ready to open up commercial coal mining to private companies for the first time in four decades, with the aim of shifting the world's third-biggest coal importer towards energy self-sufficiency.

Coal Secretary Mr. Anil Swarup said on Friday the government has identified mines it plans to auction, and is now finalising other terms such as eligibility criteria for companies to take part and whether and how to set up revenue sharing. He said a plan should be ready in the 2-3 months, setting a clear timeline on a plan that has previously only been vaguely marked out.

India has an ambitious plan to double its coal production to 1.5 billion tonnes a year by 2020, as part of Prime Minister Narendra Modi's push to bring power to 300 million people who live without electricity, and give a boost to manufacturing.

It would also support the government's efforts to develop eastern parts of the country, which are resource-rich and hold most of India's coal reserves but have lagged the western states in development.

State-owned Coal India is on track to produce 1 billion tonnes a year by the end of this decade, and India is counting on private firms to produce the remaining 500 million tones - which may prove a tough target to achieve.

As of now, only Coal India and a small government-owned company are allowed to mine and sell coal in India.

"It's imperative that India opens up the sector so that private companies can bring in new technologies and the efficiencies that we keep talking about," said Dipesh Dipu at energy-focused Jenissi Management Consultants. "But I don't think private companies will be able to produce more than 100 million tonnes this decade as the process has yet to start."

The move is likely to attract coal block bids from Indian conglomerates such as the Adani Group and GVK, but the government may find it harder to lure big multinational miners such as Rio Tinto, BHP Billiton, Anglo American and Peabody Energy. Rio Tinto did not respond to requests for comment.

Coal prices are at multi-year lows amid global oversupply, and foreign companies have faced obstacles to investing in India, such as problems in getting land and environmental approvals.

Some private companies also worry that the best quality mines would be left for Coal India.

FINALISING TERMS

Swarup was handpicked by Modi to lead a turnaround in the coal sector soon after the prime minister came to power in 2014.

Under Swarup's watch, Coal India has seen record production growth, and the government auctioned off a series of coal blocks successfully. Coal imports fell for a sixth straight month in December.

Until last year, India spent around $16 billion a year importing foreign coal, even though it sits on the world's fifth-biggest reserves of more than 300 billion tonnes.

Anil Swarup said there were still some aspects of the plan to bring in private players that needed to be examined carefully.

The government, for example, has to make sure that companies do not under-report sales if a revenue-sharing model is adopted, he said.

Companies can do that by selling coal to their units at discounted rates, and by calculating the government's share based on that instead of the market price.

Swarup declined to say where the identified mines were located. Most of India's coal is in the eastern states of Jharkhand, Odisha and Chhattisgarh.

(Source: Assorted With Economics Times, January 9, 2016)

Commercial negotiations between Nuclear Power Corporation of India Ltd (NPCIL) and Westinghouse on the construction of six AP1000 units at Mithi Virdi in India are on course to be finalized in 2016, the In-dian cabinet has said. Separately, Prime Minister Mr. Narendra Modi and Russian President Mr. Vladimir Putin have welcomed progress towards identifying a new site for VVERs in India.

A statement issued by the cabinet on 30 December also noted its ratification of the administrative ar-rangements for the implementation of the India-Australia Civil Nuclear Cooperation Agreement that came into force on 13 November.

The Cabinet said that the administrative arrange-ment for the implementation of civil nuclear coopera-tion agreement between the USA and India have now been signed and "international and domestic con-cerns" over India's liability laws have been resolved with the 2015 establishment of the India Nuclear In-surance Pool.

Mithi Virdi, in the Bhavnagar district of Gujarat, is intended to host up to six AP1000s built in three stages. NPCIL commenced site works in 2012, and Westinghouse and NPCIL signed a preliminary com-mercial contract in September 2013.

Mithi Virdi is on a list of ten proposed sites for new nuclear power plants given in-principle approval by the Indian government in April 2015. The list included sites for indigenous pressurized heavy water reactors at Gorakhpur in Haryana's Fatehabad; Chutka and Bhimpur in Madhya Pradesh; Kaiga in Karnataka; and Mahi Banswara in Rajasthan, and plants with foreign cooperation at Kudankulam in Tamil Nadu (VVER); Jaitapur in Maharashtra (EPR); Kovvada in Andhra Pradesh (ESBWR) and Haripur in West Bengal (VVER).

Russian links
India and Russia signed 16 agreements during Mr. Modi's visit to Moscow on 24-25 December, which included those on the nuclear and defense sectors.

In a joint statement following their talks, Mr. Modi and Mr. Putin said that cooperation between the two countries on the peaceful uses of nuclear energy was a "cornerstone" of their strategic partnership.

Mr. Putin said that unit 2 of the Russian-built Ku-dankulam nuclear power plant in Tamil Nadu will be commissioned within weeks and that negotiations are at an advanced stage for units 3 and 4.

The statement added that the two leaders welcomed progress in identifying the second site in India for an additional six units. They agreed to work towards localization of manufacturing in India under Mr. Modi's 'Make in India' program.

Mr. Modi said: "The pace of our cooperation in nu-clear energy is increasing. We are making progress on our plans for 12 Russian nuclear reactors at two sites. The agreement today will increase Indian manufacturing content in these reactors. It supports my mission of Make in India. I thank President Putin for his support."

(Source – World Nuclear News, 05-January-2016)

India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8 per cent in fiscal 2016-17, more than a percentage point higher than China's, according to the World Bank.

In its latest Global Economic Prospect report - which is released every six months -- the World Bank marginally reduced India's growth rate - 0.2 per cent in 2015 and 0.1 per cent in both 2016 and 2017.

However, India continues to be the bright spot of the global economy as Chinese growth is projected to slow further. India, the dominant economy in Asia, is projected to grow by a robust 7.8 per cent this year and 7.9 per cent in the next two years.

The World Bank estimates that China grew at an estimated 6.9 per cent in 2015 (0.3 per cent less than its June projection).

According to the report, China is estimated to grow at 6.7 per cent in 2016 and 6.5 per cent each in 2017 and 2018. The growth rate projection is 0.3 per cent in 2016 and 0.4 per cent in 2017. Russia and Brazil are expected to remain in recession in 2016.

"In contrast to other major developing countries, growth in India remained robust, buoyed by strong investor sentiment and the positive effect on real incomes of the recent fall in oil prices," the World Bank said.

India's currency and stock markets were largely resilient over the past year, even during bouts of volatility in global financial markets, the report said.

Reserve Bank of India, it said, has rebuilt reserves while net FDI flows have remained positive. Ongoing fiscal consolidation in India has reduced the central government's fiscal deficit to close to 4 per cent of GDP (on a 12-month rolling basis), down from a peak of 7.6 per cent in 2009.

In the report, South Asia is projected to be a bright spot in the outlook for emerging and developing economies, with growth speeding up to 7.3 per cent in 2016 from 7 per cent in the year just ended.

The region has smaller trade links with China than other regions, and is a net importer of oil and will benefit from lower global energy prices. Pakistan (on a factor cost basis) is expected to accelerate to 4.5 per cent, the report said.

According to the report, weak growth among major emerging markets will weigh on global growth in 2016, but economic activity should still pick up modestly to a 2.9 per cent pace, from 2.4 per cent growth in 2015, as advanced economies gain speed.

"More than 40 per cent of the world's poor live in the developing countries where growth slowed in 2015," said World Bank Group President Jim Yong Kim.

"Developing countries should focus on building resilience to a weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies," he said.

Global economic growth was less than expected in 2015, when falling commodity prices, flagging trade and capital flows, and episodes of financial volatility sapped economic activity.

Firmer growth ahead will depend on continued momentum in high income countries, the stabilisation of commodity prices, and China's gradual transition towards a more consumption and services-based growth model.

Developing economies are forecast to expand by 4.8 per cent in 2016, less than expected earlier but up from a post-crisis low of 4.3 per cent in the year just ended.

"There is greater divergence in performance among emerging economies. Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy," World Bank Group Vice President and Chief Economist Kaushik Basu said without naming any country.

"A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth," he said.

(Source: NDTV Profit, January 7, 2015)

Australian environmentalists believe the political climate is changing. They say that last month’s Paris climate summit signaled a shift toward a zero-carbon global economy, so Prime Minister Malcolm Turnbull should get with the program, phasing out fossil fuels and slashing emissions further than his center-right government’s target of 26% to 28% below 2005 levels by 2030.

On the surface, the climate debate has shifted away from the skepticism of Tony Abbott,the former conservative prime minister whose opposition to the Labor Party’s carbon tax helped ensure his election victory in 2013. After all, Paris was a public-relations success for the anticarbon crowd. Stocks in fossil-fuel companies plummeted and renewables soared on the Australian stock exchange following the conclusion of the global pact.

Since toppling Mr. Abbott in a party-room coup in September, Mr. Turnbull has overturned the ban on government subsidies to wind farms. Mr. Abbott, now an outspoken parliamentary backbencher, is denounced as a Neanderthal for expressing faith in the coal industry.

But at a more fundamental level, nothing has changed. Climate sensitivity—which measures how much the climate will warm—still appears to be at the low end of the Intergovernmental Panel on Climate Change’s range. There is no new cause for alarm, and the most prominent doomsayers, from American James Hansen to the Brit George Monbiot, have expressed their dismay at the toothlessness of the Paris accord.

ENLARGE

Coal mines such as this one north of Sydney are expected to ramp up production. PHOTO:WILLIAM WEST/AGENCE FRANCE-PRESSE/GETTY IMAGES

The 196 nations only agreed to volunteer their carbon-cutting promises to the IPCC every five years. They don’t have to set ambitious goals, not least because there are no common standards for measuring improvement.

Nor are they required to meet their targets, largely because there is no penalty for noncompliance. Unlike 1997’s Kyoto Protocol, Paris isn’t a legally binding treaty. Nations can provide excuses for failure and pledge to do better next time. That hardly bodes well for verifiable and enforceable action to slash greenhouse gas emissions.

The non-OECD nations that account for about 60% of global emissions are producing more coal and building more coal-fired power stations than ever. More than 2,500 stations are either under construction or planned world-wide, mostly in India and China. Although President Barack Obama has discouraged the World Bank and its affiliates from investing in coal power, the new China-led Asian Infrastructure and Investment Bank won’t be so constrained.

China will continue to improve the energy efficiency of its economy as it grows—a goal it has long pursued—but it says it will only start reducing emissions in 2030. On the eve of the Paris summit, Beijing revealed it had burned 17% more coal a year than it had formally disclosed. Its leaders talk a big game, but the world’s No. 1 emitter won’t sacrifice economic growth for climate change.

Ditto the No. 3 emitter, India. Within days of Paris, Coal India confirmed that coal production would double in the next decade. Millions of Indians still live in the dark, and their leaders are unwilling to depress economic growth.

Carbon remains the cheapest source of energy to reduce poverty. As Indian economistRathin Roy told the Australian public broadcaster after Paris, “I don’t think any country or any Australian would want any Indian child to not have access to a light bulb.”

Climate enthusiasts hail the global climate fund, through which rich nations foot the bill for climate mitigation in the developing world. Industrialized countries say they will provide $100 billion a year from 2020 onward. Don’t bet on it. The developed world raised less than $1 billion last year.

It is also far from clear where the aid will go and on what conditions. Will the U.S. Congress participate at all? Imagine an American politician asking voters to pay higher taxes so Uncle Sam can help China become more energy efficient and economically competitive. Greening the economy is not a cost-free exercise.

Which brings us back to Australia, a coal-producing powerhouse that weathered the global financial storm largely because of the commodities boom. Green activists and their well-heeled urban supporters insist the Paris pact represents the beginning of the end of Australian coal, but command-and-control mechanisms lack broad public support.

Labor Prime Minister Julia Gillard’s carbon tax in 2011-13 was met with public backlash, as was her predecessor Kevin Rudd’s proposed cap-and-trade scheme. These mechanisms amount to lost jobs, lower growth and higher prices up and down the energy chain. No renewable energy source is as efficient as carbon.

Within days of Paris, the Turnbull government approved one of the world’s largest coal mines, at the Abbot Point port in the northeast state of Queensland. The mine will be expanded by Indian energy giant Adani Enterprises. Environmental groups fret that the project poses a threat to the health of the Great Barrier Reef, a charge dismissed by Unesco. Canberra’s decision, subject to rigorous safeguards, serves the national interest and the greater good.

Adani’s expansion will help provide cheap electricity, improve living standards and save lives across developing nations, especially India. It will create thousands of construction and operational jobs in Queensland. And if one or more of Queensland’s proposed Galilee Basin coal-mine projects go ahead, which now seems likely, the Abbot port could be developed to allow increased Australian exports.

None of this should be surprising. According to the International Energy Agency, Southeast Asian coal demand will triple for at least 25 years, and Australia will be the world’s largest coal exporter by 2020. The politicians at Paris harbor illusions, but Mr. Abbott’s belief that “coal is the future” sounds correct.

(Source: Mr. Switzer is a research associate at the University of Sydney’s United States Studies Centre and host of “Between the Lines” on Australia Broadcasting Corporation’s Radio National, Wall Street Journal, January 5, 2016)

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Virginia Mining Resources would be closely tracking the developments on the subject and other events in the mining & resource sector and bringing you the same.
(Source - Assorted with inputs from PTI)

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Welcome to VMR MINING

Virginia Mining Resources would be closely tracking the developments on the subject and other events in the mining & resource sector and bringing you the same. (Source - Assorted with inputs from PTI)

Contact us

Total Pageviews

Virginia Mining Resources would be closely tracking the developments on the subject and other events in the mining & resource sector and bringing you the same.
(Source - Assorted with inputs from PTI)