Budget highlights: Fiscal deficit target for 2017-18 at 3.2%

Allocation under MNREGA increased to 48,000 cr from Rs 38,500 cr; highest ever allocation

 

Here are the highlights of Jaitley's budget for the 2017/18 fiscal year that begins on April 1.

FISCAL DEFICIT

* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability.

*Fiscal deficit at 3.4%

*Revenue deficit stands reduced to 2.1% in Fy18

GROWTH

* Jaitley says India seen as an engine of global growth

DEMONETISATION

* Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister

* Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetisation not expected to spill over to next year

* Pace of remonetisation has picked up and will soon reach comfortable levels

* Surplus money in the banking system will lower borrowing costs, increase credit flow

INFLATION

*Consumer price index inflation is expected to remain within the central bank's mandated range of 2 to 6%

SPENDING

* India to spend more in rural areas, infrastructure and poverty alleviation

* The government will continue process of economic reforms for the benefit of poor

* Allocation under MNREGA increased to Rs 48,000 cr from Rs 38,500 cr; highest ever allocation

*Dedicated micro-irrigation fund will b set up by NABARD to achieve goal of 'Per Drop More Crop'.Initial corpus will be Rs 5,000 crore

*Mission Antyodaya to bring 1 crore households out of poverty and to make 50,000 Gram Panchayats poverty-free: FM Jaitley

*Propose to double the lending target of Pradhan Matri Mudra Yojana and set it up at Rs 2.44 lakh crore for 2017-18: FM Arun Jaitley. Read more

• Budget 2017 : India Union & Railway Budget 2017 News, Live Updates, Result & Highlights

Jaitley presents Union Budget despite Oppn protest

Mallikarjun Kharge urged Speaker for postponement of the budget, after the IUML MP Ahamed's death

Finance Minister Arun Jaitley has begun presenting the Union Budget in Parliament on Wednesday amid expectations of an increase in income tax exemption limits, to incentives for the Micro Small and Medium Enterprises (MSME) sector post the November 8 demonetisation drive.

Lok Sabha Speaker Sumitra Mahajan paid tribute to former union minister and Indian Union Muslim League (IUML) leader E Ahamed, who passed away this morning.

"I would have adjourned the House. But today's sitting has been fixed by the President for presentation of the Budget. Instead the House will be adjourned tomorrow as a mark of respect for E. Ahamed ji," the Lok Sabha Speaker said.

"Madam Speaker, on this auspicious day of vasant panchami I rise to present the union budget 2017-18. I am presenting this Budget when the world economy faces ," Jaitley said, as he stood to present the Budget.

However, Leader of Opposition in Lok Sabha, Mallikarjun Kharge, urged the Speaker for postponement of the budget.

Jaitley, earlier on Wednesday called on President Pranab Mukherjee at Rashtrapati Bhavan.

It was earlier speculated that the budget could be postponed by a day after former minister of state for external affairs and Lok Sabha MP Lok Sabha E Ahamed passed away at the RML Hospital in the national capital in the wee hours of Wednesday after suffering from heart attack. Read more

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• Budget 2017 : India Union & Railway Budget 2017 News, Live Updates, Result & Highlights | Business Standard
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Budget speech to be delivered as per schedule: Govt sources

There had been some confusion over presentation of the Budget following the death of MP E Ahamed

Budget 2017 India : Government and Parliament secretariat sources said the Budget speech by Finance Minister Arun Jaitley would be delivered according to schedule on Wednesday.

Amid confusion over whether the Parliament would be adjourned following the death of sitting member of Parliament E Ahamed, sources said the Budget presentation would not be postponed. Ahamed, who was an Indian Union Muslim League Lok Sabha member and former Minister of State for External Affairs E Ahamed, passed away early morning on Wednesday.. He had suffered a cardiac arrest at the time of President Pranab Mukherjee's address to the joint sitting of Parliament on Tuesday afternoon.

Government sources said there was needless confusion about the issue. Usually, the House proceedings are adjourned if a serving member passes away. But sources said there was no rule to this, and this was only a convention.

The Lok Sabha, therefore, will meet and pay its respects to the departed soul but the Budget presentation will go on as per schedule. All that the government needs to do is get half dozen parties on its side even if the Congress and others might protest.

The Congress is likely to protest what it has alleged to be the intent to keep the news of Ahamed's passing away under wraps. On Tuesday midnight, Congress President Sonia Gandhi and other leaders reached RML Hospital to complain that Ahamed's family member were not being allowed to meet him. Ahamed was declared dead a couple of hours later.

Live Blog : Cabinet meeting on Budget ends, FM to present Budget shortly

Budget 2017 to try and ease pain from cash crunch

Budget 2017 to try and ease pain from cash crunch

Finance Minister Arun Jaitley will likely boost spending and ease back on cutting the deficit when he presents his fourth budget on Wednesday, as he seeks to lift growth hit by the government's drive to purge the economy of "black money".

Prime Minister Narendra Modi's surprise decision last November to scrap high-value banknotes worth 86 percent of India's cash in circulation has hit consumer demand, disrupted supply chains and hurt capital investments.

Jaitley will present the 2017/18 budget at 11 am (0530 GMT) to the lower house of parliament.

The finance ministry forecasts that growth could dip to as low as 6.5 percent in the current fiscal year to March, before picking up in the coming fiscal year to between 6.75 and 7.5 percent.

While opinions vary on how long the disruptions caused by Modi's crackdown on untaxed and illicit wealth will last, there is near unanimity among economists that Asia's third-largest economy needs a helping hand.

Arvind Subramanian, Jaitley's chief economic adviser, on Tuesday advocated slashing personal income tax and accelerating cuts in corporate tax rates. He cautioned, however, against pursuing debt-fuelled fiscal expansion.

Still, economists are pencilling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has budgeted for the year soon to end.

"Expectations are running high for an expansive budget," said Radhika Rao, an economist with DBS Bank in Singapore.(Read more)

BUDGET LIVE: Budget on schedule, Arun Jaitley leaves for Rashtrapati Bhawan

Staffing industry seeks resolution of tax woes in Budget

Wants TDS cut from 10% to 2%, and applied on commission earned, not on gross invoice value

Wants TDS to be cut from 10% to 2%, and applied on commission earned, not on gross invoice value

The staffing industry, representing companies such as Team Lease and Quess, wants finance minister Arun Jaitley to resolve the tax anomalies it faces, in the upcoming Budget 2017 India.

The Indian Staffing Federation says that its demand assumes significance since post-demonetisation it is the formal sector which will grow and the staffing industry will play a crucial role in that.

The industry represents contract hiring in organised industry done through tri-partite agreements -- between the company that is hiring, the person hired and the staffing industry.

The Federation said tax deducted at source (TDS) is imposed on the gross invoices received by its members from its client companies, whereas it should be on just the commission received by the staffing companies.

While this amount is adjusted later, it takes about a year to happen, creating cash flow problems for staffing companies, says Suchita Dutta, executive director of the Federation.

At the same time, the Federation said its members topped the list of India staffing firms, as per the recent report published by Staffing Industry Analysts. The report indicated that the Indian staffing industry was estimated to be worth Rs 27,000 crore in 2015 and is forecast to grow by 12 per cent in 2016 and 10 per cent in 2017.

When asked when there is cash flow problems, how come the industry is performing so well, Dutta said the results are based on top lines and not bottom lines. Read more

'Budget 2017 must focus on housing, infrastructure for pro-poor thrust'

Considering that the welfare of the poor and middle class is the priority area of the government and the assembly elections manifestos of all the major political parties centre around housing and urban development, this year's budget is expected to give a major thrust on real estate housing & infrastructure.

The Budget 2017 should be seen in the backdrop of a tough year for real estate and housing, with the problem of weak sales and high unsold inventory getting further precipitated by demonetisation. It's a matter of concern that the sale of housing units declined by 10 percent in the six month period ending September 2016.

This poses a major challenge to NDA government's flagship programme of 'Housing for All', as housing besides infrastructure, is a major booster to GDP especially in a slowdown economy and has a multiplier effect on allied sectors.

It's time to build on the foundation of structural and institutional reforms, addressing the vital issue of seamless implementation of key reforms like Real Estate Regulation Act (RERA), Smart Cities Mission, REITs (real estate investment trusts), GST and Bankruptcy Act and carry out the unfinished reform agenda of 'Ease of Doing Business and Single Window Clearance'.

As the government is rightly giving boost to affordable/low-cost housing for the success of its 'Housing for All' mission,the budget needs to come up with policy initiatives/incentives to give a fillip to affordable and low cost housing by way of direct benefits to home buyers, resulting in enhanced affordability.

In order to widen the scope of interest rebate on affordable housing,there's a need to enhance the 30 sq mtr area limit of houses, especially when the government has already broadened the scope of interest subsidy under Pradhan Mantri Awas Yojana (PMAY) by enhancing the loan eligibility limit from 6 lakh to 12 lakh by creating two additional loan slabs of 9 lakh and 12 lakh with interest subsidy of 4 percent and 3 percent respectively. Read more

Measures expected from India's annual budget that could impact markets

Govt set to announce additional details behind GAAR, which will be implemented starting April 2017

Investors in India are bracing for higher taxes and less incentives from the government's annual Budget 2017 Date to be unveiled on February 1 as the focus shifts to wringing out revenues to finance giveaways and higher public investment to support the economy.

Below are the main elements expected in the measures that could impact markets:

Guidelines for General Anti-Avoidance Rules (GAAR)

- Government set to announce additional details behind GAAR, which will be implemented starting on April 2017.

- GAAR is meant to crack down on tax havens, making it harder to claim some tax exemptions.

- The government on Friday said GAAR would not apply for foreign investors based on a jurisdiction because of genuine commercial reasons and not just to benefit from exemptions under India's tax treaties with other countries.

- India also said investors who meet so-called limitation of benefits criteria for individual tax treaties would be exempt from GAAR.

- Limitation of benefits seeks to ensure foreign companies or investors based in countries with special tax treaties with India meet certain criteria such as minimum level of investment and a commercial presence in the relevant jurisdiction.

Taxes under indirect transfer rules

- Government expected to say whether foreign portfolio investors, private equity funds and venture capitals are liable to pay indirect transfer taxes

- Confusion created after tax department said in December such investors could be liable to pay taxes if more than 50 pct of a fund's or investment vehicle's assets are based in India under some conditions

- Tax department also said indirect transfer tax could be charged under certain ownership and investment levels. Read more

Weekly roundup: Best week in 8-month; Sensex surges a whopping 848 points

A pre-Budget rally defied the negative results from Wipro, Ashok Leyland, HUL and M&M

The market put a stellar show in a holiday-truncated expiry week with benchmark indices rising to eighth-month highs thanks to higher rollovers to February series ahead of Union Budget 2017 as a pre-Budget rally defied the negative results from companies such as Wipro, Ashok Leyland, HUL and M&M. Positive sentiment abroad after Dow Jones, Wall Street’s closely-watched index, hit its fresh lifetime high of 20,000-mark, also aided the sentiment.

During the week ended January 27, the S&P BSE Sensex added 3.1% or 848 points to settle at 26759, while Nifty50 gained 3.5% or 291 points to close the week at 8641.

Midcap and Smallcap stocks jumped. The BSE Midcap index rose 3%, while the BSE Smallcap index surged 2.8%.

"With signs of FIIs taking interest in Indian equities, and with January derivatives’ expiry witnessing a 5-month high rollover in Nifty, investors continued to chase price higher, with only a few days left before budget is presented. It also helped that Dow continued to close above-20000 mark lending positivity to global markets,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

Sectors and stocks

All sectoral indices settled in green.

The week saw BSE Metal index gaining 5.9%, followed by the BSE Consumer Durables and the BSE PSU index, which gained 5.5% each. The BSE Oil & Gas index (4.9%), the BSE Bankex (4.8%) and the BSE Auto (4.5%) were other sectoral gainers.

Among individual stocks, HDFC, Adani Ports and SBI surged 10.8%, 6.7% and 6.1%, respectively for the week. Bajaj Auto gained 5.7%, Hero MotoCorp advanced 5.1%, while Mahindra & Mahindra added 5%.

Losers included Wipro (2.4%), Infosys (0.7%), Hindustan Unilever (0.6%) and Sun Pharma (0.2%). Read more

Farm insurance, credit access schemes expected in Budget 2017: Kakra of PwC

The PwC leader (Food and Agriculture), PwC was replying during a Business Standard live chat

In an effort to double the agriculture production by 2020, the government should introduce schemes for greater access to farm credit in Budget 2017, Ajay Kakra, leader (Food and Agriculture) PwC, said.

Kakra also underlined that Union Finance Minister Arun Jaitley should also introduce policies for incentives towards irrigation and insurance of farm crops. He further highlighted the need for a digitised farming economy in the longer run.

Kakra was answering questions on what announcements related to the agriculture sector are expected in Budget 2017 during a Business Standard live chat. Excerpts:

In his New Year's eve speech, Prime Minister Narendra Modi talked about giving certain concessions and incentives to farmers. It is hoped that the government will follow that up with further concessions and incentives for the agriculture sector and the agro-input industry in the coming Budget. What can we expect?

One of the key focus areas of the honourable prime minister is to provide greater access to farm credit. In my view as well this can be a key area of focus to strengthen the farming sector. As far as the agriculture input sector is concerned, access to seed, agrochemical and fertiliser is an essential requirement for ensuring farm output. The Budget can look at strengthening the distribution network of agri-inputs to ensure availability at the time of sowing or beginning of the season. The rabi sowing has been more or less normal while the offtake of fertiliser has also not been dampened due to cash crunch at the time of demonetisation.

In the financial year, the overall agricultural output was expected to grow at 4 per cent. But with the government's demonetisation move that has likely caused some roadblocks, what kind of favourable policies can we expect to heal the agriculture sector?

Agricultural growth is fundamentally governed by the output of food grain and other crops which are showing no signs of decrease. The Rabi crop is also expected to be normal except a shortfall in rabi paddy. Therefore, the sector will see a growth over the last year. Demonetisation had only a one-time effect on the agricultural transactions but has not shown any sign of slow-down in food storage and distribution and even consumption. I believe the policies will look at strengthening the coverage of a greater number of farmers in the formal banking system and providing more credit in terms of crop loans, equipment purchase, technology adoption. Currently, only 52 per cent of the total farming community of 9.2 crore is covered under the financial net. The government should aim at increasing it by another 10 per cent. Apart from this we may see policies and incentives towards irrigation and insurance of farm crop. Read more

Nifty's one week pre-budget rally biggest compared to last 9 budgets

With Budget four days away, Nifty rallied 3.5% for the week, its highest weekly gain since May 27

Below is a list of one week pre-budget market returns:

Nifty gained the most in the one-week pre-budget rally as compared to the last 9 budgets as investors remained optimistic about pro-market policies by the Finance Minister Arun Jaitley in Union Budget 2017.

With Budget 2017 four days away, Nifty rallied 3.5% for the week, its highest weekly gain since May 27. The index has gained 6% in the year so far.

Even though, not every Budget is preceded by a pre-budget rally, this year bulls have tightened their grip as government is expected to take measures to boost demand after the demonetization freeze.

The previous biggest pre-budget rally occurred in the election year 2009, during the interim-Budget, when the index rose nearly 4% in the week prior to it. Last year, the 50-share index had lost 2.5%.

Jimeet Modi, CEO, SAMCO Securities believes the market movement in the run-up to Budget depend more on the underlying market conditions, not so much on budget events per se.

“History suggests that 70% of the time budgets are in line with the underlying market moods, however during other 30% of time markets have turned due to budget events. In reality such turns are caused due the inherent overbought or oversold conditions of the market itself,” said Modi.

“In 2016, there was nothing so great about the budget, but still the indices started to rise smartly because they were in deep oversold conditions. Similarly in 2015 budget, there was nothing really bad about the first budget of the Modi government, but still the markets made a top and started to roll down because inherently it was heavily overbought mesmerized in too much optimism,” he added.

Watch: India's first Republic Day, and 22 interesting facts about R-day

The Indian Constituent Assembly had adopted the Constitution on November 26, 1949 

Budget 2017

Prime Minister Narendra Modi waves at Rajpath during the 68th Republic Day celebrations on January 26, 2017

The Indian Constituent Assembly on on November 26, 1949, adopted by the Constitution, which came into effect on January 26, 1950, The latter day marked the celebration of the country's first Republic Day. As we celebrate our 68th Republic Day on Thursday, here is a glimpse of India's maiden Republic Day celebrations

Some interesting facts about Republic day

No other sight holds the power of filling the hearts of Indians with pride and nostalgia than the sight of the country's armed forces displaying their might in the air and land as they take part in the annual parade down the Rajpath.

Tableaux of different states, symbolising our country's rich cultural diversity are the general knowledge enhancers for children and the tricolour fluttering in the background on January 26, India's Republic Day, is a treat to watch for every Indian.

The Constitution was adopted by the Indian Constituent Assembly on November 26, 1949, and came into effect on January 26, 1950 with a democratic government system, completing the country's transition towards becoming an independent republic.

What's new on R-day parade 2017?

• 2017 Republic Day Theme is Skill India and Beti Bachao Beti Padhao.

• Chief Guest - Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan, who is the first guest from any middle-east country.

• No. of states participating in the parade - 17

• First Time in History - Debut show of Sherpa (a bullet-proof NSG vehicle).

• This is the second time that a foreign military contingent marched down the Rajpath, with the French contingent being the first.

On this day, we'll tell you 22 #ThisDayThatYear things, which are must-know-facts for every Indian.Read more

Budget 2017: IT, telecom players expect more for cyber security, broadband

In govt's digitisation push, see see scope for better backbone to provide secure digital ecosystem

Budget 2017 : With the government's push for digitisation across the board, the information & technology and telecom players are expecting a Union Budget that will try to strengthen cyber security and make broadband available to all that will in turn catalyse digital payments.

"As India digitalises rapidly, holistic approach to cyber security is a pre-requisite to foster and sustain trust of all the stakeholders -- consumers, businesses as well as government," said Sanjay Rohatgi, Senior Vice President, Asia Pacific and Japan, Symantec.

"The government should consider setting aside at least eight per cent of its overall IT budget specifically for cyber security starting with the upcoming budget," Rohatgi said.

After the demonetisation in November 2016, the Indian government is trying hard to change over the country's cash-based economy to a digital one.

To succeed in this mission, the country needs good broadband connectivity throughout the length and breadth of it.

"Given the government's focus on increasing broadband connectivity, especially in the rural pockets and push towards making India a less cash-dependent society, some measures should be announced to boost the broadband penetration in the rural parts of the country," the ICRA said.

"Infrastructure companies should be encouraged to install towers in rural areas and telecom operators should be incentivised to improve network connectivity in those areas.

"Steps like allocation of more finances in a centralised fund to boost infrastructure creation in rural areas or providing some tax waivers could be initiated," the investment information and credit rating agency added. Read more

Modi govt plans expansive budget despite growth, revenue worries

Jaitley is looking at how to fund giveaways to taxpayers and higher public investment

India's finance minister is likely to borrow more than originally planned when he presents the
Budget 2017 Date on Feb. 1, senior aides and officials said, despite counting on revenues from a national sales tax whose launch date is still unknown.

Arun Jaitley is looking at how to fund giveaways to taxpayers and higher public investment to help nurse Asia's third-largest economy back to health after the government's shock decision in November to abolish high-value banknotes.

That is raising concern among some economists and investors that the government will take too many fiscal risks.

Yet officials say that, given the choice, they would choose growth sustained by state investment over a fiscal straitjacket.

"Some degree of flexibility on fiscal discipline should not be seen as irresponsible fiscal management," one senior government official told Reuters, requesting anonymity due to the sensitivity of the matter.

A fiscal advisory panel, which includes central bank head Urjit Patel, has advocated widening the budget deficit to "slightly over" 3 percent of gross domestic product to free up funds for road, railway and irrigation projects.

"It is not possible to keep up the pace of capital expenditure without increasing the fiscal deficit beyond 3 percent of GDP," another official, briefed on the committee's findings, added.

New Delhi earlier aimed to cut the federal deficit to 3 percent of GDP over the next two fiscal years, compared with 3.5 percent in the year now drawing to a close.

Independent economists are also pencilling in a higher federal deficit in the coming fiscal year, at 3.3-3.4 percent of GDP, creating room for the government to invest an extra $6 billion. Read more

Budget 2017: Crisis and opportunities in education sector

The school education and literacy budget increased 3.2% in 2016-17

The 2017-18 Union budget is an opportunity for the government to concentrate on improving school education for over 260.5 million children who enrolled in elementary and secondary school in 2015-16–children who will form the core of India’s working-age population, one billion by 2030, the largest in the world.

“Business as usual” will not solve the problem, submitted Pratham, an education nonprofit, in a pre-budget consultation with India’s finance ministry. “Unless major shifts are undertaken on an urgent basis to build children’s foundational skills, we are losing huge opportunities each year for improving the life chances of an entire generation of children and youth in this country,” the consultation note added.

IndiaSpend reached out to the education ministry for a comment on the 2017-18 budget, but we had not received a response at the time of publishing. (This story will be updated if and when the ministry responds.)

Higher education dominated last year’s education budget (with an increase of 13% over the 2015-16 budget) and the conversation about education–with policies for improving the quality and ranking of higher education, creation of a higher-education financing agency, and approval of new higher-education institutes–even though only 34.2 million enrolled in higher education institutions in 2014-15 or, a seventh or fewer than those enrolled in school.

In contrast, the school education and literacy budget increased 3.2% in 2016-17, compared to 2015-16 revised budget estimates, according to union budget data. Read more.

Demonetisation brings short-term headwinds for gold demand in India

Long-term prospects still encouraging given consumers' shift towards organised sales

Budget 2017 : Despite demonetisation-led short-term headwinds, India’s gold demand is estimated to average 850-950 tonnes every year till 2020 due to the government's initiative to curb black money and increase focus on transparency, World Gold Council (WGC) said in its latest report released on Tuesday.

India has been witnessing its gold demand in this range for the past several years. However, the demand for the metal is estimated to have declined by a fourth to 650-750 tonnes in 2016 due to various measures adopted by the government to discourage consumers from buying it as an asset class.

Interestingly, a fifth of the gold demand last year is estimated to have been met through smuggling, which became prominent since 2013 when the government began raising import duty on gold in phases, to 10 per cent, apart from taking measures to reduce gold import into India. According to WGC report estimates, gold smuggling stood at 120-135 tonnes, constituting around 20 per cent of India’s annual gold demand in 2016.

WGC managing director, Somasundaram P R, however, believes that India’s gold smuggling has declined sharply since the government announced demonetisation of high-value currency notes on November 8, constituting 86 per cent of India’s currency in circulation.

“Owing to the liquidity crisis (arising out of demonetisation), gold smuggling was impacted. The grey economy which was reliant wholly on cash would be impacted," Somasundaram said.

However, the depth of contraction will depend on how much of the demonetised currency worth Rs 15.44 lakh crore is replaced. With the introduction of goods and services tax (GST), mandatory hallmarking and a massive push by organised jewellers to promote non-cash payments, business across the gold trade will become more transparent.

This will hit the grey market and deter those who seek anonymity to avoid taxes. Consumers, meanwhile, will reap the benefits of transparency in prices and purity. 

Thus, although gold demand faces some short-term headwinds, longer-term prospects are encouraging,” said Somasundaram. Read more

Tax rationalisation, digitisation key areas for Budget: HSBC

Budget can also provide concessions to encourage digital adoption, says Pranjul Bhandari

Among the key expectations from the ensuing Budget 2017 are a new fiscal policy framework, corporate tax rationalisation, higher rural capex and focus on efficient social sector spending, says a HSBC report.

According to the global financial services major, the government should continue with its fiscal consolidation in a "practical fashion" and stick to the 3 per cent pre-announced fiscal deficit for 2016-17, but give itself headroom for compensating States for revenue losses once GST is in place.

"In our view, a balancing act would be to stick to the 3 per cent of GDP target for the core fiscal deficit, and, if necessary, use extra headroom of strictly under 0.3 per cent of GDP for compensating States for GST implementation," HSBC India Chief Economist Pranjul Bhandari said.

She further noted that tax rationalisation is expected to continue.

"In particular, we expect progress in the stated objective of gradually reducing the corporate tax rate to 25 per cent, while weeding out exemptions," Bhandari said adding, tax exemption limit could be raised to benefit people.

Moreover, the government's capex spend is expected to rise and much of this is likely to be focussed on rural India, particularly for housing, roads and irrigation.

The Budget can support digitisation and connectivity drive by providing more for the physical infrastructure budget. It can also provide concessions to encourage digital adoption, she said.

Post-demonetisation, two segments of the economy seem to have been hurt the most. First, rural India, with less access to digital and plastic, has felt the brunt of the cash crunch, while investment has also been strongly hit.

"A new fiscal policy framework, tax rationalisation, rural capex, efficient social sector spending and digitisation incentives are key expectations," Bhandari said.

Note ban impact on gold buying will wane after Budget 2017: WGC

It also said demonetisation will have a positive impact on the gold industry in the long run

India's demonetisation drive has impacted gold demand in the short term but buying is showing signs of revival and post the presentation of the national budget on February 1, the market will be back to normal, says the India chief of World Gold Council.

"In November and December (during the demonetisation drive) certainly there was some impact. But people have started buying again. We hope soon after the Budget 2017 , buying will normalise," Somasundaram P.R., Managing Director, India, World Gold Council, told IANS in an interview.

He also said demonetisation will have a positive impact on the gold industry in the long run as it will curb grey market trades substantially. "Overall impact of demonetisation will be positive -- industry will come under organised business. Of course the transition will take some time," he said.

"Business during the demonetisation period was hurt as people were mostly busy exchanging old notes and genuine buyers stayed away, fearing they might come under the tax scanner."

The World Gold Council (WGC) on Tuesday also launched the report titled "India's Gold Market: evolution and innovation", providing an overview of the industry in the last 15 years. The report also said demonetisation will have a significant impact on the economy in the short-term.

"Rumours over caps on gold holdings and buying added fuel to the fire. As tax authorities probed some jewellers who had immediately after demonetisation created opportunity to convert old notes currency for fake or back-dated sales, the resultant panic ensured that genuine gold buyers were reluctant even to buy wedding jewellery," the report added.

The WGC had forecast India's full year gold demand between 650-750 tonnes for 2016. Till the third quarter (July-September) of 2016 the demand was at 443 tonnes. It is forecast that India's average gold demand will be 850-900 tonnes per annum by 2020. Read more.

Budget may levy new cess to provide social security to coolies

It will cover around 20,000 railway coolies under social security schemes run by the EPFO

Government might announce a new cess in the forthcoming Union Budget 2017-18 to cover around 20,000 railway coolies under social security schemes run by the retirement fund body EPFO.

"There is a proposal from the Labour Ministry to levy a cess of 10 paisa per railway ticket to cover 20,000 railway coolies under the ambit of social security net through the Employees Provident Fund Organisation (EPFO)," a source said.

"The proposal makes a lot sense because 10 paisa cess per ticket will not burn of a hole into travellers' pockets. Besides it would help railways to mop up funds to provide social security to coolies," said the source.

This proposal is a one of the initiatives of government's overall efforts to bring over 40 crore informal sector workers under the social security net of the EPFO and others like ESIC.

According to a back-of-the-envelope calculation, levying of this 10 paisa cess will help in collecting about Rs 4.38 crore every year, which will be enough to provide basic minimum facilities like PF, pension and group insurance to coolies.

Indian Railways issues 10-12 lakh rail travel tickets everyday, including 58 per cent reserved tickets. Thus, the move can help mop up about Rs 1.2 lakh every day for the purpose.

Chairman of the Central Board of Trustees, EPFO's apex decision-making body, Labour Minister Bandaru Dattatreya had already assured the members to look into the proposal mooted by employee representative Ashok Singh.

Singh, the Vice-President of Indian National Trade Union Congress, had floated the proposal at the EPFO's trustees' meeting in Bengaluru on December 19, 2016.

The forthcoming general budget is likely to be tabled in Parliament on February 1, 2017.

The proposed cess of 10 paise is on every ticket sold by Indian Railways. It will not be levied per passenger. One ticket sold by Indian Railways can have multiple passengers.