Union Budget 2014 -15 by Arun Jaitley

Finance Minister Arun Jaitley’s Union Budget 2014-15 may have well been the most awaited event in India for a while now. Here are the top 50 takeaways from the budget.

  1. Fiscal deficit target for FY 15 set at 4.5 percent (with an attempt to meet the 4.1 percent fiscal deficit target set by the UPA government). Fiscal deficit target for FY 16 set at 3.6 percent, and for FY17 target set at 3 percent.
  2. FY15 GDP growth target pegged at 5.4-5.9 percent, FY16 at over 6 percent, 7-8 percent in next 3-4 years.
  3. Expenditure Management Commission to be instituted to scrutinize the expenditure reforms to be undertaken by the government.
  4. Increase of foreign direct investment (FDI) in insurance sector from 26 percent up to 49 percent; similarly, an increase of FDI in defense from 26 percent to 49 percent.
  5. No changes in retrospective tax policy; high-level committee to scrutinize all retrospective tax disputes.
  6. INR 2.40 lakh crore to be infused into banks by FY18; retail sale of bank shares to be initiated while government continues to hold majority stake.
  7. Funds allocated to finance 5 lakh landless farmers through NABARD.
  8. 200 low-cost airports to be built within the next 20 years in tier-II and tier-III cities through the PPP model; 9 airports to be provided technology for issue of e-visas to boost tourism.
  9. INR 7060 crore allocated towards development of 100 smart cities across the country
  10. PSUs expected to invest INR 247941 this fiscal year.
  11. Real Estate Investment Trusts (REITS) to have tax pass though and adequate incentives.
  12. INR 1000 crore set aside to improve irrigation in farmlands under Pradhan Mantri Krishi Sinchayee Yojana; government will target 100 percent sanitation by the year 2019.
  13. Start-up entrepreneurs from Scheduled Castes to be provided credit enhancement facility; budget allocation of INR 200 crore.
  14. INR 150 crores to be spent by Ministry of Home Affairs on women’s safety in urban regions; Beti Bachao, Beti Padhao Yojana will get INR 100 crore.
  15. INR 14389 crore allocated to development of roads in rural regions; INR 8000 crore allocated to National Housing Bank (NHB) for support of rural housing.
  16. National Rural Drinking Water Programme will get INR 3600 crore to provide safe drinking water across the country.
  17. INR 500 allocated to set up four new AIIMS like institutions in Andhra Pradesh, West Bengal, Vidarbha (Maharashtra) and Poorvanchal (UP); 12 new government medical colleges will be set up; government will target one AIMS per state, free drugs service, free diagnostic service.
  18. INR 28635 crore allocated for Sarva Shiksha Abhiyan, INR 4966 crore for Rashtriya Madhyamik Shiksha Abhiyan; 5 new IITs to be set up in the Jammu, Chattisgarh, Goa, Andhra Pradesh, and Kerala, five new IIMs in Himachal Pradesh, Punjab, Bihar, Odisha, and Maharashtra with funding of INR 500 crore.
  19. Lucknow and Ahmedabad to get INR 100 crore Metro Projects.
  20. INR 100 crore allocated for modernization of Madarsas.
  21. Agriculture Universities to be set up in Andhra Pradesh and Rajasthan and Horticulture Universities in Telangana and Haryana – for a total worth of INR 200 crore.
  22. Scientific warehousing infrastructure, Long Term Rural Credit Fund, to each get INR 5000 crore, Short Term Cooperative Rural Credit to get INR 50000 crore.
  23. Micro, Small, and Medium Enterprises (MSME) sector allocated a fund of INR 10000 crore; revival of special economic zones (SEZ) will be emphasized.
  24. INR 200 crore funding allocated to set up 6 textile clusters in Bareily, Kutch, Lucknow, Surat, Bhagalpur, Tamil Nadu.
  25. 16 new port projects proposed; INR 11635 crore funds allocated for the development of Tuticorin Outer Harbour Project.
  26. Investment of INR 37880 crore into the National Highways Authority of India and State Roads will include INR 3000 crores for the North East.
  27. INR 100 crore allocated for preparatory work on “Ultra-modern Super-critical Coal-based Thermal Power Technology”
  28. Stringent coal quality control mechanisms to be put in place.
  29. Introduced uniform KYC norms across the financial sector. Introduced one single operating demat account for customers to transact all financial assets.
  30. Banks lending long-term to infrastructure sector exempt from SLR/CRR; 6 new debt recovery tribunals set up.
  31. Public Provident Fund (PPF) investment ceiling raised to INR 1.5 lakh from INR 1 lakh.
  32. Employees’ Provident Fund Organization (EPFO) to launch unified account scheme for portability of Provident Fund accounts; wage ceiling raised from INR 6500 per month to INR 15000 per month.
  33. INR 2.29 lakh crore allocated towards Defence budget.
  34. Government committed to One Rank One Pension – INR 1000 crore allocated to FY15’s OROP requirements.
  35. INR 5000 crore allocated to modernization of armed forces over Interim Budget allocation; INR 100 crore war memorial to be commissioned.
  36. INR 2250 crore set aside for modernization of border infrastructure.
  37. 5 tourist circuits to be planned and developed for INR 500 crore.
  38. INR 2037 crore allotted to Integrated Ganga Conservation Mission called “Namami Gange”.
  39. INR 100 crore sports university to be set up in Manipur; INR 100 crore allocated to training of sportspersons for Asian and Commonwealth Games.
  40. INR 500 crore to be spent towards rehabilitation of displaces Kashmiri migrants. INR 1000 crore allocated in addition to the funds set apart for development of rail connectivity in the North East.
  41. Non-plan expenditure estimates for FY15 are INR` 1219892 crore, plan allocation INR 575000 crore, total expenditure INR 1794892 crore.
  42. Personal income tax exemption limit increased by INR 50000 – from INR 2 lakh to `INR 2.5 lakh for individual taxpayers below the age of 60 years and from INR 2.5 lakh to INR 3 lakh in the case of senior citizens. Education cess to continue at 3 percent.
  43. Investment limit under section 80C of the Income-tax Act increased from INR 1 lakh to INR 1.5 lakh.
  44. Deduction limit on account of interest on self-occupied home loan increased from INR 1.5 lakh to INR 2 lakh.
  45. 10-year extension on tax holiday announced for power producers.
  46. Income from securities trade to foreign portfolio investors will now be treated as capital gains; this will encourage fund managers of Foreign Portfolio Investors (FPIs) to move to India.
  47. Transfer pricing regulations introduced – strengthening of Advance Pricing Agreement (APA), introduction of range concept to determine arm’s length price, multiple year data to be used for comparable analysis.
  48. Tax rate on long term capital gains from transfer of Mutual Funds (non-equity oriented funds) increased from 10 percent to 20 percent.
  49. Health focus of the budget – excise on cigarettes to grow from 11% to 72%.
  50. What’s Cheaper – What’s Costlier
What’s Cheaper What’s Costlier
CRT Television Sugar-based aerated drinks
LED/LCD panels Cigarettes
Medium range footwear Chewing tobacco, gutka
Desktops, laptops, tablets Zarda-based tobacco
LED lights, lamps Pan Masala
Branded petrol Semi-cut/broken diamond jewelry
Matchboxes Imported electronic products
Soaps Radio taxi
DDT insecticides Imported steel
RO-based water purifiers
Packaged food

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