Arun Jaitley, Modi hit perfect 10 in poll budget

New Delhi: The Narendra Modi government unveiled a budget on Wednesday that pledged relief for middle class taxpayers and small and medium-sized companies, saying the government would spend billions of dollars to double farmers' incomes, upgrade ramshackle infrastructure and provide cheap housing to help the poor with hikes in government spending and cuts in taxes as Prime Minister Modi seeks to win back the sympathy of voters hit hard by his recent crackdown on "black money" while also  laying down the poll plank for the upcoming Assembly elections through budgetary provisions for the rural economy.

Finance Minister Arun Jaitley announced increases in spending on rural areas, infrastructure and fighting poverty, and sought to assure lawmakers and the country that the economic impact of the government's cash crackdown would wear off soon.

Presenting the budget for fiscal year that starts April 1 in Parliament, Mr. Jaitley said the economy was doing well despite slowing growth in other emerging economies and a massive demonetization order late last year that affected the country's mostly cash-based business activities.

Jaitley projected economic growth between 6.75 and 7.5 percent in 2017-18. Since taking office in May 2014, the Modi government has been pumping funds into boosting education, while increasing spending on roads, irrigation and other infrastructure. It has also been reforming India's complicated tax regime.

The budget proposes total spending for the fiscal year of Rs 21.47 trillion. Jaitley said spending on highways would rise to Rs 650 billion in 2017-18, up from Rs 580 billion in 2016-17.

Noting that India is "a non-compliance tax society" Jaitley said he hoped that cutting tax rates would persuade people to pay up. He announced a five percent reduction in tax rates for small and medium-sized businesses with annual turnover of up to Rs 500 million.

Taxpayers were expecting a bigger incentive than a saving of Rs 12,500 per annum for salaries of Rs 5 lakh and above. He halved the tax paid by those earning between Rs 2.5 lakh and Rs 5 lakh to 5 per cent. He has increased the tax exemption limit till Rs 3 lakh.

When opposition lauds government move
Congress V-P Rahul Gandhi said he was disappointed the government did not say how it would create new jobs. However he welcomed the government's proposal to improve transparency in electoral funding. It calls for limiting the maximum amount cash donation a political party can receive to Rs 2,000 from each person. Donations can be made by check or online, Jaitley said. Now, political parties can receive up to Rs 20,000 in cash from each donor without disclosing his or her name.