union-budget-2015-16-highlights

India: Budget 2015-16

The world is saying that India is ready to fly again

It is with such a captivating introduction that the Indian Finance Minister, Arun Jaitley, started to present the much-awaited Union Budget for FY 2015-16.

Top 50 takeaways from the budget are –

  1. The credibility of the Indian economy has been re-established”, said the FM; CPI inflation is 5.1 percent, WPI inflation is negative; double digit growth achievable.
  2. Government has facilitated construction of 50 lakh toilets in the country, target of 6 crore toilets looks achievable.
  3. Current Account Deficit this fiscal year is expected to be below 1.3 percent of GDP.
  4. FY 15 is likely to end with a GDP 7.4 percent; GDP of FY 16 likely to be 8 to 8.5 percent; India now the fastest growing large economy in the world.
  5. Fiscal deficit target for FY 16 to be at 3.9 percent; for FY 17 to be at 3.6 percent; for FY 18 to be at 3 percent.
  6. By April 2016, the Goods and Services Tax (GST) is likely to put in place a state-of-art indirect taxation system.
  7. 12.5 crore families are now a part of the PM Jan Dhan Yojana; financial inclusion has now been made a reality.
  8. Government aims at proving housing for every family by the 75th year of independence; India will have 6 crore additional houses by 2022 (2 crore in rural regions, and 4 crore in urban sectors).
  9. All Indian villages to receive electricity by 2020.
  10. Apart from GST, JAM (JanDhan, Aadhar, Mobile) trinity will be a game changer in implementing Direct Benefit Transfers.
  11. Government shall sanction construction of 1 lakh km of new roads across the country.
  12. 80,000 secondary schools in India to get upgraded with better facilities.
  13. Skills India and Make in India will be main thrust – India to be made manufacturing hub of the world.
  14. INR 150 core allocated towards creation of a world class IT hub in India.
  15. States to be made partners in growth and development; states to receive 62 percent of the centre’s receipts.
  16. State PSUs to get a Capex of INR 3.17 lakh crore.
  17. Non-banking financial companies worth over INR 500 crore to be included under SARFAESI.
  18. Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) to get an initial allocation of INR 34,699; increase in allocation by INR 5,000 crore if permitted by tax buoyancy – the highest ever allocation.
  19. Rationalisation of subsidies shall be the government’s aim; subsidy leakage must be plugged; well-off will be expected to voluntarily surrender LPG subsidy.
  20. Employment security shall be in focus, at least 1 member of each family should be employed.
  21. With an aim to enhance ease of doing business in India, government shall introduce a comprehensive bankruptcy code by 2015-16.
  22. INR 5,300 allocated for micro irrigation and drip farming projects.
  23. A universal social security system is to be launched by the government with special focus on the poor and underprivileged.
  24. SC welfare schemes to get INR 30,000 crore allocation; Proposal to set up Mudra Bank (allocation of INR 20,000 crore and credit guarantee backup of INR 3,000 crore); 5 crore small businesses led by SC/ST to be benefited.
  25. Government to launch tax-free infra bonds proposed for rail, road.
  26. Atal Innovation Mission set up to promote research collaborations between India and other countries; allocation of INR 150 crore.
  27. Self-employment will be promoted; youth encouraged to become job creators; startups to find a capital boost of INR 1000 crore.
  28. Public sector ports will be made firms under the Companies Act; corporatisation will be promoted.
  29. Government to set up 5 new Ultra Mega Power Projects for INR 1 lakh crore; each to have 4,000 MW generation capacity; a second unit of the nuclear power plant at Kudanakulam to be commissioned this FY.
  30. Government to set up INR 20,000 crore Infrastructure Fund; investments in infrastructure to go up by INR 70,000 crore.
  31. Credit of INR 8.5 lakh crore to be extended to farmers in FY 2015-16.
  32. PM Suraksha Bhima Yojana will be launched and linked to PM Jan Dhan Yojna; INR 2 lakh insurance cover to be offered at a premium of INR 12 a year; Atal Pension Yojana to launched as a pension scheme, Nayi Manzil to support the youth of minority communities.
  33. Commodities regulator, FMC, to be merged with SEBI; public debt management agency to be set up.
  34. Section 6 of FEMA to be amended.
  35. Gold monetization scheme to be introduced; gold coins with Ashok Charkra will be developed.
  36. EPF employee contribution for very low income group will be optional; no reduction in employer’s contribution.
  37. Visa on arrival to be extended to 150 countries from 43; boost to tourism expected.
  38. Assam, Himachal Pradesh, Jammu & Kashmir, Punjab, and Tamil Nadu to receive new AIIMS; IS Dhanbad to be upgraded to IIT.
  39. Defence allocation in budget is INR 2,46,727 crore.
  40. Total estimates of expenditure in the budget: INR 17 .77 lakh crore including non-plan expenditure of INR 13.12 lakh crore, and plan expenditure of INR 4.65 lakh crore.
  41. Corporate tax to be reduced over next four years from 30 percent to 25 percent.
  42. Comprehensive bill to curb black money proposed; severe penalties for tax evasion, foreign exchange non-disclosure, concealment of income, and benami properties proposed; PAN number must be quoted for all transactions over INR 1 lakh.
  43. Custom duty reduced on 22 items; royalty on technical services reduced from 25 percent to 10 percent.
  44. No change in income tax exemption limits; wealth tax to be abolished and replaced by a 2 percent surcharge on super rich; expected to generate an income of INR 9,000 crore for the government.
  45. Attempt to boost leather; excise duty on footwear with MRP over 1000 reduced by 6 percent.
  46. Service tax and education cess increased to 14 percent from 12.36 percent.
  47. 100 percent tax deduction on contributions made towards Swachch Bharat and Clean Ganga schemes; contributions to Sukanya Samridhi scheme to be exempt from tax.
  48. Tax deduction for health insurance premium increased from INR 15,000 to INR 25,000 for individual tax payers; additional deduction of INR 50,000 on contributions made towards pension schemes; transport allowance increased from INR 800 to INR 1600 per month. Total benefit to individual tax payers due to benefits announced – INR 4,44,200.
  49. Yoga to be included as a charitable purpose under the Income Tax Act.
  50. Estimated net gain from the tax proposals presented for 2015-16 likely to be INR 150.68 billion; direct tax proposals lead to a loss of about INR 8,315 crore while indirect taxes will yield a gain of INR 23,383 crore.

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