Highlights of Union Budget 2017

India unveiled a budget on Wednesday to help the poor with hikes in government spending and cuts in taxes as Prime Minister Narendra Modi seeks to win back the sympathy of voters hit hard by his recent crackdown on "black money".

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.

Jaitley also halved the basic personal income tax rate, and cut taxes on small firms that account for 96 percent of India's businesses, while imposing a surcharge on the better off. The budget sops come days before India holds five regional elections that will go some way in determining whether Modi can win a second term as Indian leader in 2019.

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

FISCAL DEFICIT

* Projects 2017/18 fiscal deficit at 3.2 percent of GDP
* Revises 2016/17 fiscal deficit estimate to 3.2 percent of GDP
* Government remains committed to 2018/19 fiscal deficit at 3 percent of  GDP
* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability

GROWTH

* c seen at 11.75 pct year on year in 2017/18
* Jaitley says India seen as an engine of global growth

EXPENDITURE

* Estimates 2017/18 total expenditure at 21.47 trillion rupees ($317.65 billion)
* Capital spending raised by 25.4 percent on year in 2017/18
* India estimates 5.23 trillion rupees towards interest expense on debt servicing in 2017/18, accounting for nearly a quarter of the country's total federal spending
* Revised estimate of 4.83 trillion rupees in 2016/17 towards interest expense on debt servicing

INFLATION

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

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 transient, effects not expected to spill over to next financial year
* Pace of remonetisation has picked up and will soon reach comfortable levels
* No transaction above 300,000 rupees to be permitted in cash
* Surplus money in the banking system will lower borrowing costs, increase credit flow
 

TAXATION AND RECEIPTS
* 2017/18 total tax revenue seen at 12.27 trillion rupees
* 2017/18 total revenue receipts seen at 15.16 trillion rupees
* Proposes cuts in personal income tax for those at bottom end of income scale
* Estimates 675.3 billion rupees in dividend receipts in 2017/18
* Net receipts under market stabilisation scheme in 2017/18 at 1 trillion rupees
* Proposes to reduce income tax rate for medium and small enterprises with annual turnover up to 500 million rupees to 25 percent
* Extends relaxation on withholding tax on foreign investor's interest income from debt until June 30, 2020
* Proposes change in capital gains tax in real estate, land

AGRICULTURE

* With a better monsoon agriculture expected to grow at 4.1 percent in 2016/17
* Agricultural credit target fixed at 10 trillion rupees for 2017/18
* Long-term irrigation fund allocated 400 billion rupees
* Allocates 80 billion rupees for milk processing over 3 years
* Farm insurance to cover 40 percent of net sown area, up from 30 percent last year
* Modern law on contract farming will be drafted and circulated to states
 

POLITICAL PARTY FUNDING

* Push for transparency in political party funding; parties will need to file income tax returns
* To limit maximum individual cash donation at 2,000 rupees for political funding
* Proposes to amend central bank act for issue of electoral bonds for political funding
 

CLOSING REMARKS:
It is said when my goal is in sight, the winds favour me and I fly. There is no other day more appropriate than this: FM Jaitley