Union Budget 2017: Read full text of Finance Minister Arun Jaitley's Budget 2017 speech in Parliament

Finance Minister Arun Jaitley on Wednesday presented a historic Budget in which the railway budget was merged with the Union Budget.

Here is Finance Minister Arun Jaitley's full budget speech

On this auspicious day of Vasant Panchami, I rise to present the Budget for 2017-18.  Spring is a season of optimism. I extend my warm greetings to everyone on this occasion. 

2. Madam Speaker, our Government was elected amidst huge expectations of the people. The underlying theme of countless expectations was good governance. The expectations included burning issues like inflation and price rise, corruption in day to day transactions and crony capitalism. There was also expectation for a major change in the way the country's natural resources were allocated, processed and deployed.

3. In the last two and half years, it has been our mission to bring a Transformative Shift in the way our country is governed. We have moved from a discretionary administration to a policy and system based administration;   from favouritism to transparency and objectivity in decision making; from blanket and loose entitlements to targeted delivery; and from informal economy to formal economy.

Inflation, which was in double digits, has been controlled; sluggish growth has been replaced by high growth; and a massive war against black money has been launched.  

We have worked tirelessly on all these fronts and feel encouraged by the unstinted support of the people to our initiatives.  The Government is now seen as a trusted custodian of public money.  I take this opportunity to express our gratitude to the people of India for their strong support.

4. We shall continue to undertake many more measures to ensure that the fruits of growth reach the farmers, the workers, the poor, the scheduled castes and scheduled tribes, women and other vulnerable sections of our society.   Our focus will be on energising our youth to reap the benefits of growth and employment.

5. Madam Speaker, I am presenting this Budget when the world economy faces considerable uncertainty, in the aftermath of major economic and political developments during the last one year.  Nevertheless, the International Monetary Fund (IMF) estimates that world GDP will grow by 3.1% in 2016 and 3.4% in 2017. The advanced economies are expected to increase their growth from 1.6% to 1.9% and the emerging economies from 4.1% to 4.5%. As per current indications, macro-economic policy is expected to be more expansionary in certain large economies. Growth in a number of emerging economies is expected to recover in 2017, after relatively poor performance in 2016.These are positive signs and point to an optimistic outlook for the next year.

6.There are, however, three major challenges for emerging economies.&First, the current monetary policy stance of the US Federal Reserve, to increase the policy rates more than once in 2017, may lead to lower capital inflows and higher outflows from the emerging economies. Second, the uncertainty around commodity prices, especially that of crude oil, has implications for the fiscal situation of emerging economies. It is however expected that increase, if any, in oil prices would get tempered by quick response from producers of shale gas and oil. This would have a sobering impact on prices of crude and petroleum. Third, in several parts of the world, there are signs of increasing retreat from globalisation of goods, services and people, as pressures for protectionism are building up.These developments have the potential to affect exports from a number of emerging markets, including India.  

7. Amidst all these developments, India stands out as a bright spot in the world economic landscape. India's macro-economic stability continues to be the foundation of economic success.  CPI inflation declined from 6% in July 2016 to 3.4% in December, 2016 and is expected to remain within RBI's mandated range of 2% to 6%. Favourable price developments reflect prudent macro-economic management, resulting in higher agricultural production, especially in pulses. India's Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17. Foreign Direct Investment (FDI) increased from Rs1,07,000 crores in the first half of last year to Rs1,45,000 crores in the first half of 2016-17. This marks an increase by 36%, despite 5% reduction in global FDI inflows. Foreign exchange reserves have reached 361 billion US Dollars as on 20th January, 2017, which represents a comfortable cover for about 12 months of imports. 

8. The Government has also continued on the steady path of fiscal consolidation, without compromising on the public investment requirements of the economy. Externally, the economy successfully weathered a number of shocks, the redemption of FCNR deposits, volatility from the US elections and the Fed rate hike. According to IMF forecast, India is expected to be one of the fastest growing major economies in 2017. 

9. A number of global reports and assessments, over the last two years, have shown that India has considerably improved its policies, practices and economic profile. These are reflected in Doing Business Report of the World Bank; World Investment Report 2016 of UNCTAD; Global Competitiveness Report of 2015-16 and 2016-17 of the World Economic Forum; and several other Reports. India has become the sixth largest manufacturing country in the world, up from ninth previously. We are seen as an engine of global growth.

10. In the last one year, our country has witnessed historic and impactful economic reforms and policy making. In fact, India was one of the very few economies undertaking transformational reforms. There were two tectonic policy initiatives, namely, passage of the Constitution Amendment Bill for GST and the progress for its implementation ; and demonetisation of high denomination bank notes. The advantages of GST for our economy in terms of spurring growth, competitiveness, indirect tax simplification and greater transparency have already been extensively discussed in both Houses of Parliament. I thank all Members of both the Houses for having passed the Constitution Amendment unanimously. I also thank the State Governments for resolving all relevant issues in the GST Council.

11. Demonetisation of high denomination bank notes was in continuation of a series of measures taken by our Government during the last two years. It is a bold and decisive measure. For several decades, tax evasion for many has become a way of life. This compromises the larger public interest and creates unjust enrichment in favour of the tax evader, to the detriment of the poor and deprived. This has bred a parallel economy which is unacceptable for an inclusive society. Demonetisation seeks to create a new 'normal' wherein the GDP would be bigger, cleaner and real. This exercise is part of our Government's resolve to eliminate corruption, black money, counterfeit currency and terror funding.   Like all reforms, this measure is obviously disruptive, as it seeks to change the retrograde status quo.  Drop in economic activity, if any, on account of the currency squeeze during the remonetisation period is expected to have only a transient impact on the economy.  I am reminded here of what the Father of the Nation, Mahatma Gandhi, had said: "A right cause never fails".

12.  Demonetisation has strong potential to generate long-term benefits in terms of reduced corruption, greater digitisation of the economy, increased flow of financial savings and greater formalisation of the economy, all of which would eventually lead to higher GDP growth and tax revenues. Demonetisation helps to transfer resources from the tax evaders to the Government, which can use these resources for the welfare of the poor and the deprived.  There is early evidence of an increased capacity of Banks to lend at reduced interest rates and a huge shift towards digitisation among all sections of society. We firmly believe that demonetisation and GST which were built on the third transformational achievement of our Government, namely, the JAM vision, will have an epoch making impact on our economy and the lives of our people.

13. Madam Speaker, we are at an important turning point in the path of our growth and development.

14. The pace of remonetisation has picked up and will soon reach comfortable levels. The effects of demonetisation are not expected to spill over into the next year. Thus IMF, even while revising India's GDP forecast for 2016 downwards, has projected a GDP growth of 7.2% and 7.7% in 2017 and 2018 respectively. The World Bank, however, is more optimistic and has projected a GDP growth of 7% in 2016-17, 7.6% in 2017-18 and 7.8% in 2018-19. This pick up in our economy is premised upon our policy and determination to continue with economic reforms; increase in public investment in infrastructure and development projects; and export growth in the context of the expected rebound in world economy.  The surplus liquidity in the banking system, created by demonetisation, will lower borrowing costs and increase the access to credit. This will boost economic activity, with multiplier effects.

15. The announcements made by Honourable Prime Minister on 31st December, 2016 address many of the key concerns of our economy at this juncture, such as, housing for the poor; relief to farmers; credit support to MSMEs; encouragement to digital transactions; assistance to pregnant women and senior citizens; and priority to dalits, tribals, backward classes and women under the Mudra Yojana.

16. My overall approach, while preparing this Budget, has been to spend more in rural areas, infrastructure and poverty alleviation and yet maintain the best standards of fiscal prudence.  I have also kept in mind the need to continue with economic reforms, promote higher investments and accelerate growth. 

17. The last one year was a witness to other major reforms, namely, enactment of the Insolvency and Bankruptcy Code; amendment to the RBI Act for inflation targeting; enactment of the Aadhar bill for disbursement of financial subsidies and benefits; significant reforms in FDI policy; the job creating package for textile sector; and several other measures.  We will continue the process of economic reforms for the benefit of the poor and the underprivileged.  

18. Madam Speaker, the Budget for 2017-18 contains three major reforms. First, the presentation of the Budget has been advanced to 1st February to enable the Parliament to avoid a Vote on Account and pass a single Appropriation Bill for 2017-18, before the close of the current financial year.  
This would enable the Ministries and Departments to operationalise all schemes and projects, including the new schemes, right from the commencement of the next financial year. They would be able to fully utilise the available working season before the onset of the monsoon. Second, the merger of the Railways Budget with the General Budget is a historic step.  We have discontinued the colonial practice prevalent since 1924. This decision brings the Railways to the centre stage of Government's fiscal policy and would facilitate multi modal transport planning between railways, highways and inland waterways. The functional autonomy of Railways will, however, continue. Third, we have done away with the plan and non-plan classification of expenditure.  This will give us a holistic view of allocations for sectors and ministries. This would facilitate optimal allocation of resources.

19. Madam Speaker, we are aware that we need to do more for our people. Continuing with the task of fulfilling the people's expectations, our agenda for the next year is : "Transform, Energise and Clean India", that is, TEC India.  This agenda of TEC India seeks to Transform the quality of governance and quality of life  of our people; Energise various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and Clean the country from the evils of corruption, black money and non-transparent political funding.
I propose to present my Budget proposals under ten distinct themes to foster this broad agenda.  The themes are :  (i)  Farmers : for whom we have committed to double the income in 5 years;(ii) Rural Population : providing employment and basic infrastructure; (iii) Youth : energising them through education, skills and jobs;(iv) Poor and the Underprivileged : strengthening the systems of social security, health care and affordable housing; (v) Infrastructure:  for efficiency, productivity and quality of life;(vi) Financial Sector : growth and stability through stronger institutions; (vii) Digital Economy :  for speed, accountability and transparency;(viii) Public Service : effective governance and efficient service delivery through people's participation;(ix) Prudent Fiscal Management : to ensure optimal deployment of resources and preserve fiscal stability; and(x)Tax Administration : honouring the honest.

Also Read: Budget 2017-18: Income tax for Rs 2.5 lakh-Rs 5 lakh slab reduced to 5%; 10% surcharge for Rs 50 lakh-1 cr; 15% surcharge on income above Rs 1 crore to continue

I.  FARMERS

20. The Indian farmer has once again shown his commitment and resilience in the current year. The total area sown under kharif and rabi seasons are higher  than the previous year. With a better monsoon, agriculture is expected to grow at 4.1% in the current year.

21. In last year's Budget speech, I focused on 'income security' of farmers to double their income in 5 years. I had also announced a number of measures. We have to take more steps and enable the farmers to increase their production and productivity; and to deal with post-harvest challenges.

22. For a good crop, adequate credit should be available to farmers in time.  The target for agricultural credit in 2017-18 has been fixed at a record level of Rs10 lakh crores. We will take special efforts to ensure adequate flow of credit to the under serviced areas, the Eastern States and Jammu & Kashmir.  The farmers will also benefit from 60 days' interest waiver announced by Honourable Prime Minister in respect of their loans from the cooperative credit structure.

23. About 40% of the small and marginal farmers avail credit from the cooperative structure. The Primary Agriculture Credit Societies (PACS) act as the front end for loan disbursements. We will support NABARD for computerisation and integration of all 63,000 functional PACS with the Core Banking System of District Central Cooperative Banks. This will be done in 3 years at an estimated cost of Rs 1,900 crores, with financial participation from State Governments. This will ensure seamless flow of credit to small and marginal farmers.

24. At the time of sowing, farmers should feel secure against natural calamities. The Fasal Bima Yojana launched by our Government is a major step in this direction.  The coverage of this scheme will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. The Budget provision of Rs 5,500 crores for this Yojana in BE 2016-17 was increased to Rs 13,240 crores in RE 2016-17 to settle the arrear claims. For 2017-18, I have provided a sum of Rs 9,000 crores. The sum insured under this Yojana has more than doubled from Rs 69,000 crores in Kharif 2015 to Rs 1,41,625 crores in Kharif 2016.

25. Issuance of Soil Health Cards has gathered momentum. 

The real benefit to farmers would be available only when the soil samples are tested quickly and nutrient level of the soil is known. Government will therefore set up new mini labs in Krishi Vigyan Kendras (KVKs) and ensure 100% coverage of all 648 KVKs in the country. In addition, 1000 mini labs will be set up by qualified local entrepreneurs. Government will provide credit linked subsidy to these entrepreneurs.

26. A Long Term Irrigation Fund has already been set up in NABARD. Honourable Prime Minister has announced an addition of Rs 20,000 crores to its corpus. This will take the total corpus of this Fund to Rs 40,000 crores.

27. A dedicated Micro Irrigation Fund will be set up in NABARD to achieve the goal, 'per drop more crop'. The Fund will have an initial corpus of Rs 5,000 crores.

28. For the post-harvest phase, we will take steps to enable farmers to get better prices for their produce in the markets. The coverage of National Agricultural Market (e-NAM) will be expanded from the current 250 markets to 585 APMCs. Assistance up to a ceiling of Rs 75 lakhs will be provided to every e-NAM market for establishment of cleaning, grading and packaging facilities. This will lead to value addition of farmers' produce.

29. Market reforms will be undertaken and the States would be urged to denotify perishables from APMC. This will give opportunity to farmers to sell their produce and get better prices.

30. We also propose to integrate farmers who grow fruits and vegetables with agro processing units for better price realisation and reduction of post-harvest losses. A model law on contract farming would therefore be prepared and circulated among the States for adoption.

31. Dairy is an important source of additional income for the farmers. Availability of milk processing facility and other infrastructure will benefit the farmers through value addition. A large number of milk processing units set up under the Operation Flood Programme has since become old and obsolete. A Dairy Processing and Infrastructure Development Fund would be set up in NABARD with a corpus of Rs 8,000 crores over 3 years.  Initially, the Fund will start with a corpus of Rs 2,000 crores.  

Also Read: Budget 2017: A quick glance at what's cheaper, what's costlier

II. RURAL POPULATION

 
32. I now turn to the Rural Sector, which was so dear to the heart of Mahatma Gandhi. 33. Over Rs 3 lakh crores are spent in rural areas every year, if we add up all the programmes meant for rural poor from the Central Budget, State Budgets, Bank linkage for self-help groups, etc. With a clear focus on improving accountability, outcomes and convergence, we will undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the 150th birth anniversary of Gandhiji. We will utilise the existing resources more effectively along with annual increases. This mission will work with a focused micro plan for sustainable livelihood for every deprived household. A composite index for poverty free gram panchayats would be developed to monitor the progress from the baseline.

34. Our Government has made a conscious effort to reorient MGNREGA to support our resolve to double farmers' income. While providing at least 100 days employment to every rural household, MGNREGA should create productive assets to improve farm productivity and incomes. The target of 5 lakh farm ponds and 10 lakh compost pits announced in the last Budget from MGNREGA funds will be fully achieved. In fact, against 5 lakh farm ponds, it is expected that about 10 lakh farm ponds would be completed by March 2017. During 2017-18, another 5 lakh farm ponds will be taken up. This single measure will contribute greatly to drought proofing of gram panchayats.

35. Participation of women in MGNREGA has increased to 55% from less than 48% in the past.

36. Honourable Members would be happy to note that the budget provision of Rs 38,500 crores under MGNREGA in 2016-17 has been increased to Rs 48,000 crores in 2017-18. This is the highest ever allocation for MGNREGA. The initiative to geo-tag all MGNREGA assets and putting them in public domain has established greater transparency. We are also using space technology in a big way to plan MGNREGA works.

37. The Pradhan Mantri Gram Sadak Yojana (PMGSY) is now being implemented as never before. The pace of construction of PMGSY roads has accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014. We have also taken up the task of connecting habitations with more than 100 persons in left wing extremism affected Blocks. We have committed to complete the current target under PMGSY by 2019. I have provided a sum of Rs 19,000 crores in 2017-18 for this scheme. Together with the contribution of States, an amount of Rs 27,000 crores will be spent on PMGSY in 2017-18.

38. We propose to complete 1 crore houses by 2019 for the houseless and those living in kutcha houses. I have stepped up the allocation for Pradhan Mantri Awaas Yojana - Gramin from Rs 15,000 crores in BE 2016-17 to Rs 23,000 crores in 2017-18.

39. We are well on our way to achieving 100% village electrification by 1st May 2018. An increased allocation of Rs 4,814 crores has been proposed under the Deendayal Upadhyaya Gram Jyoti Yojana in 2017-18.

40. I have also proposed to increase the allocations for Deendayal Antyodaya Yojana- National Rural Livelihood Mission for promotion of skill development and livelihood opportunities for people in rural areas to Rs 4,500 in 2017-18. The allocation for Prime Minister's Employment Generation Programme (PMEGP) and credit support schemes has been increased more than 3 times.

41. Swachh Bharat Mission (Gramin) has made tremendous progress in promoting safe sanitation and ending open defecation. Sanitation coverage in rural India has gone up from 42% in October 2014 to about 60%. Open Defecation Free villages are now being given priority for piped water supply. 

42. We propose to provide safe drinking water to over 28,000 arsenic and fluoride affected habitations in the next four years. This will be a sub mission of the National Rural Drinking Water Programme (NRDWP). 

43. For imparting new skills to the people in the rural areas, mason training will be provided to 5 lakh persons by 2022, with an immediate target of training at least 20,000 persons by 2017-18. 

44.Panchayati raj institutions still lack human resources for implementing development programmes. A programme of "human resource reforms for results" will be launched during 2017-18 for this purpose. 

45. The Government will continue to work closely with the farmers and the people in the rural areas to improve their life and environment. This is a non-negotiable agenda for our Government. The total allocation for the rural, agriculture and allied sectors in 2017-18 is Rs 1,87,223 crores, which is 24% higher than the previous year.

Also Read: Union budget 2017: Govt abolishes FIPB; More FDI policy easing expected

III. YOUTH 

 
46. Let me now focus on my proposals for the youth.47. Quality education will energise our youth. In the words of Swami Vivekananda, "The education which does not help the common mass of people to equip themselves for the struggle for life is it worth the name?.

48. We have proposed to introduce a system of measuring annual learning outcomes in our schools. Emphasis will be given on science education and flexibility in curriculum to promote creativity through local innovative content. 

49. An Innovation Fund for Secondary Education will be created to encourage local innovation for ensuring universal access, gender parity and quality improvement. This will include ICT enabled learning transformation. The focus will be on 3479 educationally backward blocks.

50. In higher education, we will undertake reforms in the UGC. Good quality institutions would be enabled to have greater administrative and academic autonomy. Colleges will be identified based on accreditation and ranking, and given autonomous status. A revised framework will be put in place for outcome based accreditation and credit based programmes.

51. We propose to leverage information technology and launch SWAYAM platform with at least 350 online courses. This would enable students to virtually attend the courses taught by the best faculty; access high quality reading resources; participate in discussion forums; take tests and earn academic grades. Access to SWAYAM would be widened by linkage with DTH channels, dedicated to education.

52. We propose to establish a National Testing Agency as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions. This would free CBSE, AICTE and other premier institutions from these administrative responsibilities so that they can focus more on academics.

53. We have a huge demographic advantage. Skill India mission was launched in July 2015 to maximise the potential of our youth.

54. Pradhan Mantri Kaushal Kendras (PMKK) have already been promoted in more than 60 districts. We now propose to extend these Kendras to more than 600 districts across the country. 100 India International Skills Centres will be established across the country. These Centres would offer advanced training and also courses in foreign languages.This will help those of our youth who seek job opportunities outside the country.

55. In 2017-18, we also propose to launch the Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) at a cost of Rs 4,000 crores. SANKALP will provide market relevant training to 3.5 crore youth.

56. The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be launched in 2017-18 at a cost of Rs 2,200 crores. STRIVE will focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry cluster approach.

57. A special scheme for creating employment in the textile sector has already been launched. A similar scheme will be implemented for the leather and footwear industries.

58. Tourism is a big employment generator and has a multiplier impact on the economy. Five Special Tourism Zones, anchored on SPVs, will be set up in partnership with the States. Incredible India 2.0 Campaign will be launched across the world.

Also Read: Budget 2017: Government to infuse Rs 10,000 crore in public sector banks in FY 2018 under 'Indradhanush plan'

IV. THE POOR AND THE UNDERPRIVILEGED

59. Madam Speaker, I now turn to my proposals for the poor and the underprivileged.

60.Sabka Saath Sabka Vikas begins with the girl child and women. Mahila Shakti Kendra will be set up at village level with an allocation of Rs 500 crores in 14 lakh ICDS Anganwadi Centres. This will provide one stop convergent support services for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition. A nationwide scheme for financial assistance to pregnant women has already been announced by Honourable Prime Minister on 31st December, 2016. Under this scheme, Rs 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children.

61. For the welfare of Women and Children under various schemes across all Ministries, I have stepped up the allocation from Rs 1,56,528 crores in BE 2016-17 to Rs 1,84,632 crores in 2017-18.

62. We propose to facilitate higher investment in affordable housing. Affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits.

63. The National Housing Bank will refinance individual housing loans of about Rs 20,000 crore in 2017-18. Thanks to the surplus liquidity created by demonetisation, the Banks have already started reducing their lending rates, including those for housing.  In addition, interest subvention for housing loans has also been announced by the Honourable Prime Minister.

64. Poverty is usually associated with poor health. It is the poor who suffer the maximum from various chronic diseases. Government has therefore prepared an action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018 and Measles by 2020. Elimination of tuberculosis by 2025 is also targeted. Similarly,action plan has been prepared to reduce IMR from 39 in 2014 to 28 by 2019 and MMR from 167 in 2011-13 to 100 by 2018-2020. 1.5 lakh Health Sub Centres will be transformed into Health and Wellness Centres.

65. We need to ensure adequate availability of specialist doctors to strengthen Secondary and Tertiary levels of health care. We have therefore decided to take steps to create additional 5,000 Post Graduate seats per annum. In addition, steps will be taken to roll out DNB courses in big District Hospitals; strengthen PG teaching in select ESI and Municipal Corporation Hospitals; and encourage reputed Private Hospitals to start DNB courses. We will work with the State Governments to take these tasks forward. The Government is committed to take necessary steps for structural transformation of the Regulatory framework of Medical Education and Practice in India.

66. Two new All India Institutes of Medical Sciences will be set up in the States of Jharkhand and Gujarat.

67. We propose to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines. New rules for regulating medical devices will also be formulated.  These rules will be internationally harmonised and attract investment into this sector.  This will reduce the cost of such devices.

68.  We are keen on fostering a conducive labour environment wherein labour rights are protected and harmonious labour relations lead to higher productivity.     Legislative reforms will be undertaken to simplify, rationalise and amalgamate the existing labour laws into 4 Codes on (i) wages; (ii) industrial relations; (iii) social security and welfare; and (iv) safety and working conditions.  The Model Shops and Establishment Bill 2016 has been circulated to all States for consideration and adoption.  This would open up additional avenues for employment of women. The amendment made to the Payment of Wages Act, is another initiative of our Government for the benefit of the labour and ease of doing business.  

69.Our Government is giving special importance to implementation of the schemes for welfare of Scheduled Castes, Scheduled Tribes and Minorities.  The allocation for the welfare of Scheduled Castes has been stepped up from `38,833 crores in BE 2016-17 to ` 52,393 crores in 2017-18, representing an increase of about 35%. The allocation for Scheduled Tribes has been increased to `31,920 crores and for Minority Affairs to `4,195 crores. The Government will introduce outcome based monitoring of expenditure in these sectors by the NITI Aayog.  

70. For senior citizens, Aadhar based Smart Cards containing their health details will be introduced.  A beginning will be made through a pilot in 15 districts during 2017-18.  The LIC will implement a scheme for senior citizens to provide assured pension, with a guaranteed return of 8% per annum for 10 years.

V.  INFRASTRUCTURE

71.The fifth component of TEC India agenda is Infrastructure.  

72. Railways, roads and rivers are the lifeline of our country.  I feel privileged to present the first combined Budget of independent India that includes the Railways also.  We are now in a position to synergise the investments in railways, roads, waterways and civil aviation. For 2017-18, the total capital and development expenditure of Railways has been pegged at ` 1,31,000 crores.  This includes ` 55,000 crores provided by the Government.   

73. Among other things, the Railways will focus on four major areas, namely :

(i) Passenger safety (ii) Capital and development works; (iii) Cleanliness; and (iv) Finance and accounting reforms.

74. For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a corpus of ` 1 lakh crores over a period of 5 years.  Besides seed capital from the Government, the Railways will arrange the balance resources from their own revenues and other sources.  Government will lay down clear cut guidelines and timeline for implementing various safety works to be funded from this Kosh. Unmanned level crossings on Broad Gauge lines will be eliminated by 2020.  Expert international assistance will be harnessed to improve safety preparedness and maintenance practices.

75. In the next 3 years, the throughput is proposed to be enhanced by 10%.  This will be done through modernisation and upgradation of identified corridors.  Railway lines of 3,500 kms will be commissioned in 2017-18, as against 2,800 kms in 2016-17. Steps will be taken to launch dedicated trains for tourism and pilgrimage.  

76.Railways have set up joint ventures with 9 State Governments. 70 projects have been identified for construction and development.

77.A beginning has been made with regard to station redevelopment. At least 25 stations are expected to be awarded during 2017-18 for station redevelopment.  500 stations will be made differently abled friendly by providing lifts and escalators.  

78. It is proposed to feed about 7,000 stations with solar power in the medium term.  A beginning has already been made in 300 stations. Works will be taken up for 2,000 railway stations as part of 1000 MW solar mission. 

Our focus is on swachh rail.  SMS based Clean My Coach Service has been started.  It is now proposed to introduce 'Coach Mitra' facility, a single window interface, to register all coach related complaints and requirements.  By 2019, all coaches of Indian Railways will be fitted with bio toilets.  Pilot plants for environment friendly disposal of solid waste and conversion of biodegradable waste to energy are being set up at New Delhi and Jaipur railway stations.  Five more such solid waste management plants are now being taken up.

80.          Today Indian Railways face stiff competition from other modes of transportation which are dominated by the private sector.  Transformative measures have to be undertaken to make Indian Railways competitive to retain their position of pre-eminence. The following steps will therefore be taken :(i)            Railways will implement end to end integrated transport solutions for select commodities through partnership with logistics players, who would provide both front and back end connectivity.  Rolling stocks and practices will be customised to transport perishable goods, especially agricultural products.(ii)           Railways will offer competitive ticket booking facility to the public at large. Service charge on e-tickets booked through IRCTC has been withdrawn. Cashless reservations have gone up from 58% to 68%.   

(iii)          As part of accounting reforms, accrual based financial statements will be rolled out by March 2019.  

81. It will be our continuous endeavour to improve the Operating Ratio of the Railways.  The tariffs of Railways would be fixed, taking into consideration costs, quality of service, social obligations and competition from other forms of transport.

82. Metro rail is emerging as an important mode of urban transportation.  A new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software.  This will open up new job opportunities for our youth. 

83. A new Metro Rail Act will be enacted by rationalising the existing laws.  This will facilitate greater private participation and investment in construction and operation.

84.          In the road sector, I have stepped up the Budget allocation for highways from ` 57,976 crores in BE 2016-17 to ` 64,900 crores in 2017-18.   2,000 kms of coastal connectivity roads have been identified for construction and development. This will facilitate better connectivity with ports and remote villages.  The total length of roads, including those under PMGSY, built from 2014-15 till the current year is about 1,40,000 kms which is significantly higher than previous three years.

85.          An effective multi modal logistics and transport sector will make our economy more competitive.  A specific programme for development of multi-modal logistics parks, together with multi modal transport facilities, will be drawn up and implemented.

86.          Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode.  Airport Authority of India Act will be amended to enable effective monetisation of land assets.  The resources, so raised, will be utilised for airport upgradation.

87.          For transportation sector as a whole, including rail, roads, shipping, I have provided ` 2,41,387  crores in 2017-18.  This magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities.

88.          Telecom sector is an important component of our infrastructure eco system.  The recent spectrum auctions have removed spectrum scarcity in the country.  This will give a major fillip to mobile broadband and Digital India for the benefit of people living in rural and remote areas.

89.          Under the BharatNet Project, OFC has been laid in 1,55,000 kms.  I have stepped up the allocation for BharatNet Project to ` 10,000 crores in 2017-18.  By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats,   with wifi hot spots and access to digital services at low tariffs. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology.  

90.          For strengthening our Energy sector, Government has decided to set up Strategic Crude Oil Reserves.  In the first phase, 3 such Reserves facilities have been set up.  Now in the second phase, it is proposed to set up caverns at 2 more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan.  This will take our strategic reserve capacity to 15.33 MMT.

91. In solar energy, we now propose to take up the second phase of Solar Park development for additional 20,000 MW capacity.

92. We are also creating an eco-system to make India a global hub for electronics manufacturing.  Over 250 investment proposals for electronics manufacturing have been received in the last 2 years, totalling an investment of ` 1.26 lakh crores.  A number of global leaders and mobile manufacturers have set up production facilities in India.  I have therefore exponentially increased the allocation for incentive schemes like M-SIPS and EDF to ` 745 crores in 2017-18.  This is an all-time high.

93. We have to focus on our export infrastructure in a competitive world.  A new and restructured Central scheme, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.

94.  The total allocation for infrastructure development in 2017-18 stands at `3,96,135 crores.

VI.          FINANCIAL SECTOR 

95. I now turn to the Financial Sector.  The focus of TEC India agenda in this sector is on building stable and stronger institutions.  We will continue with our reform agenda with several new measures.  

96. Our Government has already undertaken substantive reforms in FDI policy in the last two years.  More than 90% of the total FDI inflows are now through the automatic route.  The Foreign Investment Promotion Board (FIPB) has successfully implemented e-filing and online processing of FDI applications.  We have now reached a stage where FIPB can be phased out.  We have therefore decided to abolish the FIPB in 2017-18.  A roadmap for the same will be announced in the next few months.  In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course.

97. The Commodities markets require further reforms for the benefits of farmers.  An expert committee will be constituted to study and promote creation of an operational and legal framework to integrate spot market and derivatives market for commodities trading.  e-NAM would be an integral part of such framework.  

98. The draft bill to curtail the menace of illicit deposit schemes has been placed in the public domain and will be introduced shortly after its finalisation.  There is an urgent need to protect the poor and gullible investors from another set of dubious schemes, operated by unscrupulous entities who exploit the regulatory gaps in the Multi State Cooperative Societies Act, 2002.  We will amend this Act in consultation with various stakeholders, as part of our 'Clean India' agenda.

99. The bill relating to resolution of financial firms will be introduced in the current Budget Session of Parliament.  This will contribute to stability and resilience of our financial system.  It will also protect the consumers of various financial institutions.  Together with the Insolvency and Bankruptcy Code, a resolution mechanism for financial firms will ensure comprehensiveness of the resolution system in our country.

100. I had stated in my last Budget speech that a Bill will be introduced to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP and public utility contracts.  After extensive stakeholders' consultations, we have decided that the required mechanism would be instituted as part of the Arbitration and Conciliation Act 1996.  An amendment Bill will be introduced in this regard.

101.        Cyber security is critical for safeguarding the integrity and stability of our financial sector.  A Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established.  This entity will work in close coordination with all financial sector regulators and other stakeholders.

102.        I have also proposed several other measures in the financial sector which are listed in Annex I.103.        Listing of Public Sector enterprises will foster greater public accountability and unlock the true value of these companies.  The Government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges. The disinvestment policy announced by me in the last budget will continue.

104.        The shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges.

105.        We see opportunities to strengthen our CPSEs through consolidation, mergers and acquisitions.  By these methods, the CPSEs can be integrated across the value chain of an industry.  It will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders. Possibilities of such restructuring are visible in the oil and gas sector.  We propose to create an integrated public sector 'oil major' which will be able to match the performance of international and domestic private sector oil and gas companies.

106.        Our ETF, comprising shares of ten CPSEs, has received overwhelming response in the recent Further Fund Offering (FFO).  We will continue to use ETF as a vehicle for further disinvestment of shares.  Accordingly, a new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18.

107.        The focus on resolution of stressed legacy accounts of Banks continues.  The legal framework has been strengthened to facilitate resolution, through the enactment of the Insolvency and Bankruptcy Code and the amendments to the SARFAESI and Debt Recovery Tribunal Acts.  In line with the 'Indradhanush' roadmap, I have provided ` 10,000 crores for recapitalisation of Banks in 2017-18.  Additional allocation will be provided, as may be required.

108.        Listing and trading of Security Receipts issued by a securitization company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows into the securitization industry and will particularly be helpful to deal with bank NPAs.

109.        The Pradhan Mantri Mudra Yojana has contributed significantly to funding the unfunded and the underfunded.  Last year, the target of ` 1.22 lakh crores was exceeded.  For 2017-18, I propose to double the lending target of 2015-16 and set it at ` 2.44 lakh crores.   Priority will be given to Dalits, Tribals, Backward Classes, Minorities and Women.

110.        The Stand Up India scheme was launched by our Government in April 2016 to support Dalit, Tribal and Women entrepreneurs to set up greenfield enterprises and become job creators.  Over 16,000 new enterprises have come up through this scheme in activities, as diverse as food processing, garments, diagnostic centres, etc.

VII.         DIGITAL ECONOMY

111.        Promotion of a digital economy is an integral part of Government's strategy to clean the system and weed out corruption and black money.  It has a transformative impact in terms of greater formalisation of the economy and mainstreaming of financial savings into the banking system.  This, in turn, is expected to energise private investment in the country through lower cost of credit.  India is now on the cusp of a massive digital revolution.  

112.        A shift to digital payments has huge benefits for the common man.  The earlier initiative of our Government to promote financial inclusion and the JAM trinity were important precursors to our current push for digital transactions.

113.        Already there is evidence of increased digital transactions.  The BHIM app has been launched. It will unleash the power of mobile phones for digital payments and financial inclusion.  125 lakh people have adopted the BHIM app so far. The Government will launch two new schemes to promote the usage of BHIM; these are, Referral Bonus Scheme for individuals and a Cashback Scheme for merchants.  

114.        Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly.  This will be specifically beneficial for those who do not have debit cards, mobile wallets and mobile phones.   A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards. Banks have targeted to introduce additional 10 lakh new PoS terminals by March 2017.  They will be encouraged to introduce 20 lakh Aadhar based PoS by September 2017.   

115.        Increased digital transactions will enable small and micro enterprises to access formal credit.  Government will encourage SIDBI to refinance credit institutions which provide unsecured loans, at reasonable interest rates, to borrowers based on their transaction history.

116.        The digital payment infrastructure and grievance handling mechanisms shall be strengthened.  The focus would be on rural and semi urban areas through Post Offices, Fair Price Shops and Banking Correspondents.  Steps would be taken to promote and possibly mandate petrol pumps, fertilizer depots, municipalities, Block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments, including BHIM App.  A proposal to mandate all Government receipts through digital means, beyond a prescribed limit, is under consideration.  

117.        Government will strengthen the Financial Inclusion Fund to augment resources for taking up these initiatives.

118.        Government will consider and work with various stakeholders for early implementation of the interim recommendations of the Committee of Chief Ministers on digital transactions.  

119.        The Committee on Digital Payments constituted by Department of Economic Affairs has recommended structural reforms in the payment eco system, including amendments to the Payment and Settlement Systems Act, 2007.  Government will undertake a comprehensive review of this Act and bring about appropriate amendments.  To begin with, it is proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems.  Necessary amendments are proposed to this effect in the Finance Bill 2017.

120.        As we move faster on the path of digital transactions and cheque payments, we need to ensure that the payees of dishonoured cheques are able to realise the payments. Government is therefore considering the option of amending the Negotiable Instruments Act suitably.