Continuing with government steps to check black money, Finance Minister Arun Jaitley today proposed to ban all cash transactions above Rs 3 lakh beginning April 1, 2017. While presenting Union Budget 2017-18 in Parliament, he said that this move was taken on the basis of the recommendation of the Special Investigation Team on black money that was set up by the Supreme Court.

He also reduced the income tax liability of the salaried class to 5% from the earlier 10% for those earning between Rs 2.5 lakh and Rs 5 lakh. Tax liability of MSMEs posting a turnover of 50 lakh annually, was also reduced to 25% from 30% earlier, a move which will benefit 96% companies.

Stressing the need for greater transparency in political funding, Jaitley said the maximum amount of cash donation by an individual to a political party could be Rs 2,000 — a sharp drop from the Rs 20,000 amount in cash earlier. However, political parties can take donations from donors through cheque and digital payments. He also said the government proposes to amend the RBI Act for issuing electoral bonds. Donors can purchase the bonds through cheques and these will be redeemable in the registered account of a political party.

Jaitley announced creation of a Railway Surksha Kosh (Rail Safety Fund) with a corpus of Rs 1 lakh crore to be created over a period of five years and Railways will get Rs 1,31,000 crore for capex and development expenditure in 2017-18. He also said that Railways will eliminate all the unmanned level crossings by 2020.

Jaitley said the allocation for new crop insurance scheme ‘Pradhan Mantri Fasal Bima Yojana’, which was launched last year, has been increased to Rs 13,240 crore this fiscal from budgeted Rs 5,500 crore. The allocation for the next fiscal has been earmarked at Rs 9,000 crore. “The coverage of this scheme will be increased from 30 per cent of the cropped area in 2016-17 to 40 per cent in 2017-18 to 50 per cent in 2018-19,” he said.