Finance Minister Arun Jaitley mentioned his government’s demonetisation drive only briefly in his opening remarks of the Union Budget 2017-18. However, the entire budget from thereon, almost every sop, every tax break, every feel-good announcement, happened because of the note ban.
This, one of the most populist budgets in recent history, went all out to announce benefits for the poor, the rural sector, farmers, small businesses, and the salaried classes. These are the very groups that were most affected by demonetisation, when Rs 15.4 lakh crore worth of high denomination notes were deemed invalid in one fell swoop by Prime Minister Narendra Modi on November 8.
On Wednesday, Jaitley announced higher allocations for schemes related to the social sector, agriculture and the rural poor and promised to lift 1 crore households from poverty. He slashed the corporate tax rates for small and medium businesses earning less than Rs 50 lakh per annum, cut the tax rates for the lowest Budget Speech 2017 income tax slabs and revised those slabs as well. He also gave affordable housing the status of an infrastructure sector.
Probably his biggest announcements, related to proposed overhaul of political funding, also stemmed from the move. The impression sought to create was that the government is serious about going after the big sources of black money, one of them being electoral finances.
Jaitley backed his boss and called note-ban a “bold and decisive measure to curb tax evasion and parallel economy.” He said that the move would generate long term benefits including reduced corruption, greater digitisation, increased flow of financial savings and greater formalisation of the economy
He also promised that the pace of remonetisation has picked up and will soon reach comfortable levels.