3 weeks to Budget 2018: A look back at Jaitley’s 2017 reforms that eased pain of middle class

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Updated: January 19, 2018 11:11:34 PM

India is only three weeks away from Union Budget 2018, we take a look at few major steps that Arun Jaitley took in the last Union Budget 2017 to ease the financial burden and pain of the middle class.

In Budget 2017, the government introduced a simple one-page return for the people with an annual income of up to Rs 5 lakh other than business income. (Image: Reuters)

India is only three weeks away from Union Budget 2018, Finance Minister Arun Jaitley is all set to present this government’s last full budget on 1 February 2018 before the General Elections of 2019. Arun Jaitley is likely to go with a populist Union Budget 2018 which seems to have infused a wave of optimism among the people of the country, going by various news reports and analyst comments on television. Since India has entered into the poll-bound 2018, it is more likely that the Narendra Modi government’s reforms spree takes a pause for populist measures in Union Budget 2018-2019.

Meanwhile, we take a look at few major steps that Arun Jaitley took in the last Union Budget 2017 to ease the financial burden and pain of the middle class. He also took some other measures which are likely to benefit the common people in the long-term.

  • In the Union Budget 2017, Finance Minister Arun Jaitley slashed income tax rate to 5% from 10% for the income slab between Rs 2.5 lakh to Rs 5 lakh per year. While those earning up to Rs 5 lakh were the major beneficiaries of this move, all other taxpayers in subsequent brackets too got a benefit of Rs 12,500.

  • In Budget 2017-2018, Arun Jaitley lowered the holding period to qualify for long-term capital gains exemption in the case of immovable property for two years from three years. This step significantly reduced the tax burden on those selling property after two years. The government also changed the base year of indexation to 1 April 2001 from 1 April 1981. This enabled people to improve the acquisition cost of their immovable assets, thereby reducing their overall capital gains.
  • In order to promote and simplify the tax filing among young taxpayers, Modi government introduced a simple one-page return for the people with an annual income of up to Rs 5 lakh other than business income.

Other two major steps which are likely to benefit in long-term:

  • Housing for all

Narendra Modi government laid an ambitious target to build houses for homeless people by March 2019. Under the scheme of housing for all, the government said that it will build about 1 crore houses by March 2019, raising Pradhan Mantri Awas Yojana allocation to Rs 23,000 crore from Rs 15,000 crore. Up until December 2017, 10 lakh houses were built, according to Rural Development Ministry. Earlier in November 2017, the Rural Development Ministry said in an official statement that, out of the total targeted 1 crore houses by March 2019, 51 lakh houses will be completed by March 2018.

  • Power for all

The government also announced to another scheme in which it had promised to provide power for all. The government had set the deadline for electrifying all villages by 1 May 2018 and similarly, it was aiming to provide 24X7 power to all by March 2019. However, the government seems to have extended the deadline. In September 2017, Power Minister R K Singh said India will achieve the target of power for all by December 2018.

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