Strong macro-economic fundamentals, reforms for sustained growth defined 2017: FinMin

New Delhi, Dec 19: Government has asserted that strong macro-economic fundamentals and reforms for sustained growth defined 2017 for Ministry of Finance.

According to ‘Year End Review – 2017’ released by the Ministry of Finance Monday, it was a historic year with significant recognition by Moody’s Investors Service, upgrading India’s local and foreign currency issuer ratings after 13 years.
India, the Review said, moved up 30 ranks in the World Bank’s Ease of Doing Business Report and there were visible signs of financial system cleansing by the demonetisation exercise.It said that transformational reforms, overhaul of indirect tax system by the introduction of the Goods and Services Tax (GST) to replace multiple Central and State taxes and a new direct tax code was initiated to re-write the Income Tax Act It said that recapitalisation of Public Sector Banks (PSBs) and an Alternative Mechanism for their consolidation, the Financial Inclusion and Social Security Schemes – Pradhan Mantri Jan-Dhan Yojana and Atal Pension Yojana achieved significant milestones. Enhancement of the quality of life, it said, remained the primary goal for Government which put into implementation the recommendations of the 7th Central Pay Commission to benefit more than 48 lakh Central Government Employees.
On the achievements of Department of Economic Affairs, it said that overall fundamentals of the economy remained strong for the year 2017-18 as Gross Domestic Product growth rate remained at 6.0 per cent (up to Q2). Similarly, the Consumer Price Index stood at 3.6 per cent (Q2), Wholesale Price Index at 3.6 per cent (Q2), Current Account Deficit at 14.3 billion dollar in Q1, Trade Deficit was at 41.2 billion dollar in Q1.It said that the country saw Foreign Direct Investment (FDI) inflows of 1,350.93 million dollar (As on October, 2017) while Foreign Exchange Reserves went up to 401,942.0 million dollar (As on December 1, 2017).
According to the Ministry, manufacturing, electricity, gas, water supply & other utility services and trade, hotels, transport & communication and services related to broadcasting sectors registered growth of over 6.0 percent in Q2 of 2017-18 over 2016-17 fiscal. 
Moody's Investors Service upgraded Government of India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive after a period of 13 years in recognition of the Narendra Modi dispensation’s commitment to macro stability which led to low inflation, declining deficit and prudent external balance along with Government’s fiscal consolidation programme. 
India’s ranking in World Bank’s doing Business Report rose to 100-30 places up over its rank of 130 in the Doing Business Report 2017 - highest jump in rank of any country in the 2018 Ease of Doing Business (EoDB) Report. This made India the only nation in South Asia and Brazil, Russia, India, China and South Africa economies to feature among most improved economies of the EoDB Report this year.
One year after the landmark move to cleanse the economy of black money, 8th November 2017 was a day to recount the successes of the continued operations after demonetisation. High Denomination Notes have been brought down by 50 per cent of value in circulation, 50 lakh new bank accounts opened to enable cashless transaction of wages, 26.6 per cent increase in number of taxpayers added from FY 2015-16 to FY 2016-17 and 27.95 per cent increase in number of e-returns filed, the value of Immediate Payment Services transactions increasing almost 59 per cent from August 2016 to August 2017, 2.24 lakh shell companies were struck off, undisclosed income worth Rs. 29,213 crore was detected and admitted and revenues of the Urban Local Bodies across the country increased.
According to the Review, the Logistics Sector was granted Infrastructure status in the 14th Institutional Mechanism (IM) Meeting held on 10th November, 2017 to meet the need for an integrated system development. The move came about in view of the fact that the logistics cost in India is very high compared to developed countries.
It will thus enable the Logistics Sector to avail infrastructure lending at easier terms with enhanced limits, access to larger amounts of funds as External Commercial Borrowings (ECB), access to longer tenor funds from insurance companies and pension funds and be eligible to borrow from India Infrastructure Financing Company Limited (IIFCL).
On Department of Revenue’s achievements, the Review said that Goods and Services Tax (GST) was rolled out on the midnight of 30 June 2017 and came into effect from 1 July 2017 which is bringing transparency and accountability in business transactions along with ensuring ease of doing business and rationalisation in tax rates.GST has removed the hurdles in inter-State transactions resulting in the setting up of a common market and has allowed taxpayers to take credit of taxes paid on inputs (input tax credit) and utilise them for the payment of output tax.But the Ministry still feel that GST was in a period of evolution and response to the need of the hour. Subsequent to the rollout of GST, 22 States in India 3rd July, 2017, abolished their check posts for smooth movement of goods across the country.
On direct tax, it said that Central Board of Direct Taxes (CBDT) notified new Safe Harbour Regime 
on 8 June 2017 to minimise transfer pricing disputes, provide certainty to taxpayers, align safe margins with industry standards, and to enlarge the scope of transactions.Income Tax Department undertook a slew of measures to widen the tax base and bring about efficiency, transparency and fairness in tax administration. 
Some of the initiatives include – introduction of Single Page ITR-1 (SAHAJ) Form for taxpayers with income up to Rs 50 lakhs and slashing of corporate tax to 25 per cent for companies with turnover of up to Rs 50 crore. With these initiatives, the numbers of taxpayers increased significantly from 4.72 crore
in FY 2012-13 to 6.26 crore during FY 2016-17 as of 18th September 2017 in the current fiscal. 
As part of Government’s efforts to widen the tax base, Direct Tax collections for FY 2017-2018 reached Rs 4.39 lakh crore up to October 2017, accounting for 15.2 per cent growth from the corresponding period last year.Touching Demonetisation and Operation Clean Money, the Review said that Income Tax Department (ITD) has been undertaking extensive enforcement action including search and seizure, and surveys largely based on the information received during the demonetisation period. 
It launched Operation Clean Money (OCM) on 31st January 2017 to leverage technology for 
e-verification of cash deposits made during 9th November to 30th December 2016 demonetisation period. The operation involves the use of advanced data analytics, allowing for optimisation of government resources and causing minimum inconvenience to the taxpayers.
Extensive enforcement action by the Income Tax Department 
during 9th November 2016 to 28th February 2017 has led to seizures worth over Rs 818 crore and detection of undisclosed income of over Rs 9,334 crore.
The impact of Government action translated to an increase of 21.7 per cent in the returns of Income received in FY 2016-17, 16 per cent growth in Gross Collection (the highest in the last five years), 14 per cent Growth in Net Collection (the highest in last three years) and above 18 per cent, 25 per cent and 22 per cent growth in Personal Income Tax, Regular Assessment Tax and Self-assessment Tax respectively.
Subsequent to demonetisation, 91 lakh taxpayers were added to the tax net as of May 2017 due to a result of action taken by the Income Tax Department.On the issue of combating corruption and pilferage, it said that a task force was constituted in July 2017 to effectively tackle the malpractices by shell companies.
The Government of India undertook various measures to curb benami transactions across the country. Some of the measures include setting up of 24 Benami Prohibition Units (BPUs) for taking effective action under the Benami Act and empowering relevant authorities to attach and eventually confiscate clandestine properties.Department of Financial Services advised banks in September 2017 to put restrictions on bank accounts of over two lakh struck-off companies and use enhanced diligence while dealing with companies.
W.e.f. 1st November, 2016, the Income Tax Department intensified actions under the new Benami Transactions (Prohibition) Amendment Act, 2016 (the Act).It also framed the Prohibition of Benami Property Transactions Rules, 2016.About Department of Financial Services (DFS), it said that in order to strengthen the banks, which are the pillars of the economy, the Government decided to take a massive step to recapitalise PSBs in a front-loaded manner, with a view to support credit growth and job creation entailing mobilisation of capital of about Rs 2,11,000 crore over the next two years, through budgetary provisions of Rs. 18,139 crore, Recapitalisation Bonds to the tune of Rs. 1,35,000 crore, and the balance through raising of capital by banks from the market while diluting government equity.
Government also undertook some major legislative changes to facilitate recovery and resolution of stressed assets. The Insolvency and Bankruptcy Code, 2016 was enacted as a unified framework to resolve insolvency and bankruptcy matters and to put in place safeguards to prevent unscrupulous, undesirable persons from misusing or vitiating the provisions of the Code.
Loans extended under the Pradhan Mantri Mudra Yojana (PMMY) during 2017-18 crossed the target 
of Rs 1,21,450.31 crores till 8th December 2017 current fiscal. Under the scheme a loan of upto Rs 50,000 is given under sub-scheme ‘Shishu’ between Rs 50,000 to 5.0 lakhs under sub-scheme ‘Kishore’ and between 5.0 lakhs to 10.0 lakhs under sub-scheme ‘Tarun’. About 6.28 crore loans were extended to women entrepreneurs till 21st July 2017 of the current fiscal. An estimated 76 per cent of the borrowers under PMMY were women entrepreneurs.The number of total bank accounts opened under Pradhan Mantri Jan Dhan Yojana (PMJDY) became 30.69 crore as on 29th November 2017. 
The number of zero balance accounts declined from 76.81 per cent in September 2014 to less than 20 per cent in 2017 September. Also, more than 23.08 crore RuPay cards were issued to the account holders along with an overdraft facility of Rs. 5000/- till 29th November 2017. 
Also, all RuPay ATM-cum-debit cardholders were made eligible for accidental death and permanent disability insurance cover.
Till August 2017 about 52.4 crore unique Aadhaar numbers are linked to 73.62 crore accounts in India. As a result, the poor were able to make payments electronically. Every month now, about 7 crore successful payments are made by the poor using their Aadhaar identification.On the working and achievement of Department of Disinvestment and Public Asset Management (DIPAM), it said that the Central Government raised a total of Rs. 52,389.56 crore through disinvestment till 15th December, 2017 in the current Financial Year 2017-18.It added that the Government has consistently increased Public Expenditure on Infrastructure in order to boost employment and provide renewed impetus to economic growth. The Government of India received Rs.7,67327 crore (47.9 per cent of corresponding BE 17-18 of Total Receipts) upto October 2017 comprising Rs. 6,33,617 crore Tax Revenues (Net to Centre), Rs. 95,151 crore of Non-Tax Revenues and Rs.38,559 crore of Non-Debt Capital Receipts. 
Non-Debt Capital Receipts consists of Recovery of Loans (Rs. 8,394 crore) and Disinvestment of PSUs (Rs. 30,165 crore).The Review added that there has been a special thrust on key development sectors including Rural Roads, Housing, Railways, Power, Highways and Digital Infrastructure.
The Capex target of Government of India for 2017-18 was Rs. 3.09 lakhs crores, which is 31.28 per cent higher than last year, out of which Rs. 1.46 lakhs crores was spent on capital works till 2017 September. Government launched a new umbrella program for Road Building of 83,677 km of roads involving capex of Rs.6.92 lakhs crores over next 5 years with an outlay of Rs.5,35,000 crores that would generate 14.2 crores man-days of jobs. UNI