In a first, Parliament on Thursday completed the Budget exercise for fiscal beginning April 1 well before the start of the financial year, giving the government more time to implement welfare spending programmes and taxation plans.
Scrapping a colonial-era tradition of presenting the Budget at the end of February, Finance Minister Arun Jaitley for the first time in the history of independent India has presented the annual accounts on February 1.
While Parliament had earlier approved the spending proposals (demands for grants) and General Budget, it cleared the taxation proposals contained in the Finance Bill 2017 on Thursday.
Rajya Sabha, where the ruling party does not have a majority, on Wednesday approved the Finance Bill with five amendments but the lower house of Parliament or Lok Sabha on Thursday rejected all the changes and Speaker Sumitra Mahajan said the bill was considered approved in original form by Parliament.
This will ensure proposals take effect from April 1.
To ensure that the budgetary exercise is over before the fiscal ends, the government had within couple of hours after the Rajya Sabha proposed five amendments to Finance Bill introduced them in the Lok Sabha. And today got those amendments defeated by voice vote after a debate, which lasted barely couple of hours.
The government now has one full working day to get the President’s assent to the Finance Bill.
Replying to the debate, Finance Minister Arun Jaitley said the Rajya Sabha amendment capping political donation by companies cannot be accepted as it would limit the number of donors to political parties.
On the change approved by the upper house to curb more powers to taxmen, he said the government as a matter of “abundant caution” and to protect whistle-blowers has provided that the “satisfaction note” or the reasons for initiating a search or survey will only be shared with court and not with the person or entity in question.
With regard to Electoral Funding, the minister asked the opposition to suggest a better system which will ensure clean money and transparency.
“I am only hearing adjectives like ‘it must be clean’, ‘it must be transparent’. Please give me ideal combination of the two. We are willing to consider it. I will wait for a specific suggestion,” Jaitley said.
Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed sometime in mid-May, weeks ahead of onset of monsoon rains. This meant government departments would start spending only from August-end or September after monsoon ends.
Besides, advancing the presentation date, the Budget also scrapped the classification of expenditure under plan and non-plan heads as also merged Railway budget with it, ending a nearly century-long practice.
Advancement of the Budget will give government departments more time to spend as well as allow companies time to adapt to business and taxation plans.
The five amendments as was passed by the Rajya Sabha included deletion of two clauses that provided more powers to taxmen for requisition books of account of an assessee and power to survey.
The Rajya Sabha had also approved an amendment that there should be a cap of 7.5 per cent of net profit of the last three financial years for donation to political parties. It also approved a provision to disclose the name of political parties to which contribution has been made by a company.
These amendments got defeated in the Lok Sabha on Thursday.
In the now approved Finance Bill, the cap on cash transactions has been lowered to Rs 2 lakh from previously mandated Rs 3 lakh, biometric identifier Aadhaar made mandatory for filing tax returns and allowed cheque-only contributions to electoral trusts as part of its campaign against blackmoney.
An amendment to the Companies Act of 2013 made donations by companies to electoral trusts only through account payee cheque, bank draft or electronic transfer.
It also allows for dissolution of as many as seven appellate tribunals with their work being taken over by other existing tribunals.
The tribunals scrapped include the Competition Appellate Tribunal, whose functions would be taken by the National Company Law Appellate Tribunal (NCLAT).
Airports Economic Regulatory Authority Appellate Tribunal and Cyber Appellate Tribunal would be replaced and their functions would be taken over by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
Also, the Copyright Board would be dissolved and its functions will be taken over by the Intellectual Property Appellate Board.
The National Highways Tribunal would be replaced and its functions would be taken over by the Airport Appellate Tribunal, while the function of the Employees Provident Fund Appellate Tribunal would be taken over by the Industrial Tribunal.