Ø Finance Minister Arun Jaitley today presented the Union budget for FY 2016 in the backdrop
of easing inflation and
interest rates but continued
growth challenges which the government needs to address. Jaitley is under pressure to unveil reforms that will put the
country’s economy on a path of 7-8 percent growth over
the
next two years.
Ø The
3 achievements
of Govt have been —PM's
Jan Dhan Yojana, transparent auctions & Swachh Bharat, said Jaitley: Here are the highlights of
his speech in parliament:
Ø The world is predicting it is India's chance to fly and credibility of the economy
has been
re-estbalished. Not only
is ours the second best performing stock markets among the big
economies, but India is poised to be the fastest-growing economy
Ø Coal bearing states will get several lakhs
of crores thanks to the coal block
auction
Ø 50 lakh toilets have already been constructed in 2014-2015 and we will achieve our target
of six crore
toilets
Ø GST will be put in place as a state of art indirect tax system by
April 1st 2016
Ø Our achievement is to conquer
inflation; will be only five
percent by end of year
Ø GDP growth for 2015-16 seen at between 8 -
8.5
percent. Estimated GDP for current fiscal is 7.4%
Ø Increase in agriculture productivity is essential for welfare for rural population,
we should commit to
increase irrigation
area
Ø Need to upgrade 80,000 secondary schools so that they are within
5 km reach for
students. According to the FM, Skill development should start from class XI for those who
are
not that bright
academically. Students should work as trainee in the industry and the industry should give
stipend to these students. In the classroom should
be taught about
their rights and responsibility towards the country. FM proposes new scheme called Nayi
Manzil to enable youth without school leaving certificates to
get employment
Ø Fiscal discipline has to be achieved despite demands
for
public investment. States
will now be empowered with more resources as recommended by
the Financial Commission report.
Ø Devolution
will be Rs. 5.2 lakh crore in 2015. Total transfers
to States will 62 per cent.
Ø Economic growth this year at 11.5 percent is lower in nominal terms
but
will meet the
challenging fiscal target of 4.1 percent of GDP. Jaitley further said that fiscal deficit target of
3 percent will be achieved in three years rather than the
two
years announced earlier.
So fiscal deficit seen at 3.9% of GDP in
15/16; 3.5% of GDP in
16/17 and 3% in 2017/18.
Ø CPI inflation to remain close to 5 pct by March, opening room for more monetary policy
easing
Ø Economy faces five challenges: Agri income are under stress, increase in public and
Ø private investment, manufacturing
reduced to 17%, fiscal discipline, devolution to
states
Ø Need to cut subsidy leakage, not subsidy itself. Working towards
rationalisation of subsidies, says FM. Subsidies will be targeted and done directly, expect those in the
top tax bracket will give up LPG subsidy voluntarily. Direct Transfer of Benefits will be expanded from
1 crore accounts to 10.3
accounts
Ø Government to set up Mudra Bank aimed at lending
to lower
income groups
Ø Rural Infrastructure Development Fund to
be 25000 crore
Ø FM proposes much needed bankruptcy code in the year 2015-2016 to meet global standards and provide for judicial capacity. The
code is aimed at addressing bad
loan
challenges
Ø Social security systems for all poor and an affordable insurance policy for the poor is also being promised. Measure
to
bring in more equity. Atal Pension Yojana
will provide
defined pension
according to contribution ; 50% contribution to be from the government
Ø Infrastructure outlays for roads and railways go up. Investment in infrastructure will go up
by Rs 70000 crore in
2015/16 over last year
Ø PPP model of Infrastructure to be revitalized and realigned where government will bear
larger part of the risk
Ø Second unit of Kudankulam nuclear power station to be commissioned in 2015/16. Govt
also proposes to set up 5 ultra mega power projects, each of 4000 MW, will be plug and
play projects
Ø Deepening of bond markets is the need of the hour. FM proposes to merge FMC with
Sebi to
reduce speculation
Ø MNREGA allocation to go up by Rs 5000 crore. This is the highest ever allocation to the scheme
Ø Ports in public sector will be encouraged to corporatize & become companies under
companies act
Ø FM
promises Rs 1,000 crore corpus for
establishing a
mechanism to facilitate startups
Ø FM proposes to introduce gold monetisation scheme to allow investors to earn interest
in metal account. Also says an alternative sovereign gold bond to replace physical gold.
Jaitley also proposes to work on developing Indian gold coin which carries the Ashok
Chakra to
help
recycle gold available in country
Ø Debit card transactions to be encouraged and cash transaction
dis incentivised
Ø Employees EPF contribution may become optional
Ø Jaitley now proposes to do away with different types of foreign investment and replace
them
with composite caps instead
Ø Another Rs 1,000 crore committed to
the
Nirbhaya Fund
Ø Jaitley proposes increase in Visa on Arrivals to 150 countries from its current 43 in an
attempt to
boost tourism
Ø Dispute of resolution
bill to be set to
see
that stuck projects can be unlocked
Ø FM propose to set up AIIMS this year in J&K, Punjab, Tamil Nadu, HP and Assam and
new New Indian Institute of Managements in J&K and Andhra Pradesh. Meanwhile ISM Dhanabad will be upgraded to
full
IIT
Ø India ups defence budget
to Rs 2,46,727 crore for coming fiscal
Ø FM proposes to develop heritage sites Elephanta Caves; old Goan churches; Varanasi; Hampi etc
Ø Taxation: FM Proposes to reduce the rate of corproate
tax to 25 percent from the current
30 percent over
the
next four years
Ø Black money law shall be implemented by next year: Foreign Exchange Management
Act and Money Laundering Act will be amended in
relation
to confiscation
of assets
Ø In order to curb benami transaction in property deals, Jaitley has proposed to rationalise
capital gains tax regime for real estate investment trusts.
Ø GAAR deferred by another 2 years
Ø Indirect tax: Govt to reduce custom
duty on 22 items
Ø FM proposes to replace wealth tax with additional 2% surcharge on super rich ( those
earning above Rs 1 crore in
a year) This will add Rs 9000 crore to the government's kitty
Ø Pan Number quoting
made compulsory for transactions more than Rs 1 lakh.
Ø For
senior citizens, health insurance premium
will now be Rs 30,000
Ø Additional deduction of Rs 50000 under section 80CCD, with aim of moving from
pension less to a pension
society
Ø An individual tax payer
can
now get exemptions
up to Rs 4.4 lakh.
Ø Transport allowance increased to Rs 1600 a month from
the
current Rs 800
Ø Service tax has been raised from
12.3 percent to 14 percent
Ø To discourage transactions in
cash, Rupee debit card to
incentivise credit transactions
Ø Clean energy cess increased from 100 to 200 Rupees per metric ton of coal to finance
Green
Energy
Fund
Ø Custom duty on
tobacco increased to Rs 70 a kg
from
the current Rs 60/kg. This means
cigarettes are getting more expensive.
Ø Custom duty on
commercial vehicles hiked to 40 percent from 10
percent
Ø Excise duty on footwear with leather uppers to
be reduced to
6 percent
Ø 100 percent Tax exemption for contributions to 'Swachh Bharat Abhiyan' and 'Clean
Ganga Fund' by corporates as part of CSR
Ø Swachh Bharat cess of two
percent, if necessary
Ø Law against Benami property in fight against black money
Ø Splitting
of transaction
not to be permitted
Ø Tax regime to be rationalized
Ø Rigorous imprisonment of up to 10
years for concealing income
Ø Prevention of Money Laundering Act to be amended to provide for forfeiture of property in
India if the one abroad cannot be attached
Ø Exemption to
individual tax payers to
continue
Ø In
last nine months several steps taken
to effectively deal with problem
of black money
Ø Comprehensive new law to
be brought against black money
Ø New
structure to be put in
place in banking
sector for
seamless integration
of data
Ø Adequate provision for
defence with Rs.246,727 crore earmarked this year
Ø Fully IT-based student-help
facility for needy students
Ø Eastern states to be given opportunity to develop faster. Special boost to Bihar and West
Bengal as in the case of Andhra Pradesh and Telangana
Ø Good progress in DMIC corridor and other infra-projects. Rs.1,200 crore earmarked and additional funds if pace of work picks up
on ongoing projects
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