Budget 2016: 9 Pillars that will transform India
- In Economics
- 05:01 AM, Mar 01, 2016
- Pramod Kumar Buravalli
Union Finance Minister Arun Jaitley who presented his third Union Budget in Lok Sabha on the 29th Feb 2016, listed nine pillars that will transform India.
Arun Jaitley opened his speech stating that the current Account Deficit had declined to 14.4 billion $ this year and that it will be 1.4 % of the GDP at the end of this fiscal year. And, that the Revenue deficit target was improved from 2.8 % to 2.5 % in
current fiscal and the Fiscal deficit target for 2015-16 and 2016-17 was retained at 3.9 per cent and 3.5 per cent respectively.
Claiming that the NDA Government had to work in an unsupportive global environment and obstructive domestic political atmosphere, he asserted that India must strengthen firewalls against all risks through structural reforms and rely heavily on the domestic market to propel growth. Arun Jaitley also mentioned that there will be an additional burden due to the implementation of the 7th Pay Commission and OROP (One Rank One Pension). However, in spite of all odds it is a fact that India has been hailed as the brightest spot in a globally receding economy with the GDP now accelerating to 7.6 per cent.
Salient Features from the budget for the Rural, Agricultural and Social Sectors:
- More than 75 lakh people have so far given up the LPG subsidy under the #Giveitup campaign. Rs 1000 crore has now been provided for LPG connection to rural households; scheme to go on for 2 years to cover 5 crore BPL households.
- 5,542 of the 18,542 unelectrified villages have been electrified; government committed to achieving 100 per cent electrification of villages by May 2018.
- Digital literacy scheme to be launched to cover 6-cr additional rural households. Rs 87,765 crore has been allocated for rural development.
- Government would develop 300 'rurban' clusters.
- Rs 850 crore has been allocated for animal husbandry, cattle and livestock breeding.
- Rs 2.87 lakh crore would be given as grants-in-aid to village panchayats and municipalities to boost rural economy.
- A dedicated long-term irrigation fund @ NABARD with a corpus of Rs 20,000 crores.
- Rs 19,000 crore has been allocated for Pradhan Mantri Gramin Sadak Yojana in 2016-17; in all, Rs 27,000 crore after state contribution.
- Rs 38,500 crores has been allocated for MNREGA in 2016-17, the highest ever.
- Rs 5,500 crore has been allocated for the crop insurance scheme.
- 28.5 lakh hectares of land to be brought under irrigation. Five lakh acres of land would be brought under Organic farming in three years under Krishi Vikas Yojana.
- A record agricultural credit target of Rs 9 lakh crore in 2016-17 has been set. Rs 60,000 crore for ground water recharging is also in the pipeline.
- Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana has been recorded.
- DBT to be used to transfer subsidy on fertilizer in select districts on pilot basis.
- Certain parts of dialysis machines would be exempt from all forms of customs duty and national dialysis service program to be launched in all district hospitals.
- A new health protection scheme would provide cover up to Rs one lakh per family; top up of Rs 35,000 for people above 60 years.
- Government to provide Rs 500 crore for Stand Up India scheme.
- 3,500 medical stores would be opened under Pradhan Mantri Jan Aushodi Yojana to make quality medicine available.
- The budget proposes a health cover of Rs one lakh to every economically weak family. For senior citizens belonging to economically weaker sections, an additional top-up package of up to Rs 30,000 would be provided.
- Rs 9000 crore has been allotted to Swachch Bharat Mission.
Other Salient Features:
- Government to pay interest of 9 % if there is delay in giving effect to an appellate order.
- 13 different cesses levied by different ministries to be abolished.
- 11 new benches of Customs and Excise Services Appellate Tribunal to be introduced.
- Domestic black money holders to get a limited compliance window to declare undisclosed assets and escape prosecution.
- One-year limit provided for disposing of income tax cases relating to waiver of interest and penalty.
- There would be limited tax compliance window from June 1 to September 30 for declaring undisclosed income.
- Excise duty on Tobacco products increased by 10-15 per cent.
- Tax on black money declared would be 30 per cent plus 7.5 per cent penalty and 7.5 per cent surcharge.
- New grading system of imposing penalties to be introduced for under-reporting or concealment of income.
- Service tax to be exempted for construction of affordable housing up to 60 sq. m under state and central housing schemes.
- Pollution cess of 1 per cent on small petrol, LPG and CNG cars will be implemented; 2.5 per cent on diesel cars of certain specifications and 4 per cent on higher capacity vehicles.
- Excise 1 per cent imposed on articles of jewelry excluding silver.
- NRI’s providing alternate documents would not be subject to higher tax rate.
- TDS provisions would be rationalized.
- Direct tax proposal to result in revenue loss of Rs 1060 crore; indirect tax proposals to raise Rs 20,670 crore; net gain of Rs 19,610 crore.
- Rate of securities transaction tax would be raised from 0.017 per cent to 0.05 per cent.
- Dividend in excess of Rs 10 lakh per annum to be taxed at additional 10 per cent.
- Focusing on bankruptcy laws the government will work to make such laws insolvent and will undertake significant reforms.
- Service tax exempted for General Insurance Schemes under Niramaya Swasthaya Bima Yojana.
- Will implement General Anti-Avoidance Rule (GAAR) from April 1, 2017
- A one-time dispute resolution scheme for retro tax cases in which the payment of tax arrears would lead to waiver of penalty and interest.
- New manufacturing companies incorporated after March 2016 would be given option of being taxed at 25 per cent plus cess plus surcharges.
- Govt would spend Rs 19.78 lakh crore in 2016-17 - Rs 5.5 lakh crore under plan head, Rs 14.28 lakh crore under non-plan head.
- Comprehensive review of the FRBM Act, a committee to be constituted for the purpose.
- Rs 900 crore provided to buffer fund created to moderate prices of pulses.
- Govt would introduce bill to amend Companies Act for ease of doing business to enable registration of companies in a day.
- Service tax on single premium annuity to be reduced to 1.5 per cent from 3.5 per cent.
- Govt to introduce bill to amend Companies Act for ease of doing business; to enable registration of companies in a day.
- Service Tax would be exempted on general insurance schemes under NIRMAYA Scheme.
- Target delivery of financial, other intermediary services would be introduced using Aadhar in this Budget session.
- In 2016-17, government eyes Rs 1,80,000 crore credit target through Mudra bank.
- Govt to increase ATMs, micro-ATMs in post offices in next three years.
- Consolidation roadmap for public sector banks to be spelt next year; government open to reducing its stake in PSBs below 50 per cent.
- Accelerated depreciation to be limited to 40 per cent with effect from April 1, 2017 as part of phasing out of exemptions to industry.
- The Banking Boards Bureau would be operationalized next fiscal.
- Pre-emptive income tax scheme to be extended to all professionals with income of Rs 50 lakh with a presumption of 50 per cent profit.
- Deduction for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those living in rented houses. Relief will amount to Rs 3000 per annum; 1 crore tax payers to benefit.
- Ceiling of tax rebate for tax payers with up to Rs 5 lakh annual come to be raised to Rs 5000 from Rs 2000 currently.
- Rs 25,000 crore to be provided for recapitalization of public sector banks.
- SEBI Act would be amended to provide for more benches for Securities Appellate Tribunal. Will also develop new derivatives products as well as products for corporate bond market.
- RBI Act to be amended to provide statutory backing for monetary policy framework and monetary policy committee (M%).
- A comprehensive bankruptcy code would be enacted as part of financial sector reforms.
- Department of Disinvestment to remain Department of Investment and Public Asset Management.
- Government to allow 100 per cent FDI through FIPB in marketing of food products produced and manufactured in India.
- Government to bring new policy for strategic sale of CPSE assets.
- A new credit rating system for infrastructure will be developed.
- More FDI reforms proposed in insurance, pension, asset restructuring companies and stock markets.
- A Public Utility Resolution of Disputes Bill to be passed to solve problems in infrastructure contracts, PPP and public utilities.
- Duty drawback scheme widened and deepened to include more products and countries.
- Government considering to provide calibrated market freedom to new gas production from deep sea, ultra-deep sea to boost stagnant domestic output.
- Government preparing a comprehensive plan for nuclear power generation and allocation could be up to Rs 3,000 crore per annum.
- 160 airports and airstrips to be revived at a cost of Rs 50-100 crore each.
- 2,000 kilometers of state highways would be converted into national highways.
- Rs 8000 crore provided for Sagarmala project.
- Abolition of permit law would be the medium-term goal in public transport.
- Government has allocated Rs 55,000 crore for roads and highways.
- Total outlay for infrastructure at Rs 2.21 lakh crore for 2016-17.
- Govt to pay 8.33 per cent towards employee pension fund.
- Rs 1.7K crore has been earmarked for 1500 multi-skill training institutes to train youths under Skill Development program
- An "enabling regulatory architecture" will be provided to 10 public and as many private institutions to turn them into world-class teaching and research institutions.
- Government would create digital depository for school leaving certificates.
- 62 new Navodaya vidyalayas to be opened in next two years.
- An "enabling regulatory architecture" will be provided to 10 public and as many private institutions to turn them into world-class teaching and research institutions.
- To give a boost to higher education, a Higher Education Financing Agency will be set up with an initial capital of Rs 1,000 crore.
- The government will also set up 1,500 Multi-Skill Training Institutes across India. Rs 1,700 crore has been allocated for this purpose.
- Entrepreneurship education and training will be provided in 2,200 colleges, 300 schools, 500 government ITI’s and 50 Vocational Training Centers through 'Open Online Courses'.
Comments