Finance minister Arun Jaitley on Saturday announced Union Budget 2015 aimed at high growth, saying the pace of cutting the fiscal deficit would slow as he seeks to boost investment and ensure that ordinary people benefit.

Here are the highlights of Jaitley’s budget for the fiscal year that begins 1 April.

Fiscal deficit

—Fiscal deficit seen at 3.9% of GDP in 2015-16

—Will meet the challenging fiscal target of 4.1 percent of GDP

—Remain committed to meeting medium term fiscal deficit target of 3% of GDP

—Current account deficit (CAD) below 1.3% of GDP

—Jaitley says have to keep fiscal discipline in mind despite need for higher investment


—GDP growth seen at between 8% and 8.5% year-on-year

—Nominal economic growth seen between 11% and 12%

—Aiming double digit growth rate, achievable soon


—Expects consumer inflation to remain close to 5% by March, opening room for more monetary policy easing

—Monetary policy framework agreement with the Reserve Bank of India (RBI) clearly states objective of keeping inflation below 6%

—“One of the achievements of my government has been to conquer inflation. This decline in my view represents a structural shift."


—Revenue deficit seen at 2.8% of GDP

—Non-tax revenue seen at 2.21 trillion rupees

—Agricultural incomes are under stress

—Net receipts under market stabilization scheme estimated at Rs20,000 crore


—Government targets Rs41,000 crore from stake sales in companies in 2015/16

—Total stake sale in 2015-16 seen at 69,500 crore

—Sets stake sale target for 2016-17 at Rs55,000 crore

—Revises down stake sale target for 2014-15 to Rs31,350 crore

Market reforms

—Propose to merge commodities regulator Forward Markets Commission (FMC) with Securities and Exchange Board of India (Sebi)

—To bring a new bankruptcy code

—Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee

—To set up public debt management agency

—Proposes to introduce a public contract resolution of disputes bill

—To establish an autonomous bank board bureau to improve management of public sector banks

Policy reforms

—To enact a comprehensive new law on black money

—Propose to create a universal social security system for all Indians

—To launch a national skills mission soon to enhance employability of rural youth

—To raise visa-on-arrival facility to 150 countries from 43

—Allocates Rs34,699 crore for rural employment guarantee scheme

Raises threshold for application of transfer pricing rules to Rs20 crore from current Rs5 crore


—Gross market borrowing seen at Rs6 trillion

—Net market borrowing seen at Rs4.56 trillion

General anti-avoidance rules (GAAR)

—Government defers rollout of anti-tax avoidance rules GAAR by two years

—GAAR to apply prospectively from 1 April 2017

—Retrospective tax provisions will be avoided


—To abolish wealth tax

—Replaces wealth tax with additional 2% surcharge on super-rich

—Proposes to cut to 25% corporate tax over next four years

—Corporate tax of 30% is uncompetitive

—Net gain from tax proposals seen at Rs15,068 crore

—Jaitley proposes modification of permanent establishment norms so that the mere presence of a fund manager in India would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.

—Proposes to rationalise capital gains tax regime for real-estate investment trusts (REITs)

—Extends withholding tax concession on foreign debt purchases by two years

—Expects to implement goods and services tax by April 2016

—To reduce custom duty on 22 items

—Basic custom duty on commercial vehicle doubled to 20%

—Proposes to increase service tax rate and education cess to 14% from 12.36%

—Plans to introduce direct tax regime that is internationally competitive on rates without exemptions

—Exemptions for individual tax payers to continue

—To enact tough penalties for tax evasion in new bill

—Tax department to clarify indirect transfer of assets and dividend paid by foreign firms

Personal income tax

—No revision of income tax brackets

—Limit of deduction of health insurance premium increased to Rs25,000 from Rs15,000; limit increased to Rs30,000 from Rs20,000 for the elderly

—People aged above 80 and not covered by health insurance to be allowed deduction of Rs30,000 for medical expenses

—Additional deduction of Rs25,000 for the disabled

—Limit on deduction for contributions to pension fund and new pension scheme increased to Rs150,000 from Rs100,000 rupees

—Additional deduction of Rs50,000 for contribution to new pension scheme under section 80CCD

—Monthly transport allowance exemption doubled to Rs1,600

Import tax

—Import tax on iron and steel increased to 15% from 10%

—Import tax on metallurgical coke increased to 5% from 2.5%


—Investment in infrastructure will go up by Rs70,000 in 2015-16 over last year

—Plans to set up national investment infrastructure fund

—Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects

—Proposes five ultra mega power projects for 4,000 MW each

—Second unit of Kudankulam nuclear power station to be commissioned

—Will need to build additional 100,000km of road

—Ports in public sector will be encouraged to corporatise under Companies Act


—Plan expenditure estimated at about Rs4.65 trillion

—Non-plan expenditure seen at about Rs13.12 trillion rupees

—Allocates Rs2.46 trillion for defence spending

—Allocates Rs33,150 billion rupees for health sector

—If revenue improves, hope to raise budgeted allocations for rural job scheme by Rs5,000 crore


—Government to provide Rs7,940 crore capital infusion to state-run banks

—Propose to do away with different types of foreign investment caps and replace them with composite caps

—To allow foreign investment in alternative investment funds

—Public investment needed to catalyse investment


—To launch gold deposit accounts and sovereign bond

—Import duty stays at 10%; disappoints jewellers

—To work on Indian-made gold coin to cut imports


—Raises excise duty on cigarettes by 25% for cigarettes of length not exceeding 65mm

—Raises excise duty by 15% for cigarettes of other lengths


—Food subsidy seen at Rs1.24 trillion

—Fertilizer subsidy seen at Rs72,969 crore

—Fuel subsidy seen at Rs30,000

—Major subsidies estimated at Rs2.27 trillion

—"We are committed to subsidy rationalisation based on cutting leakages"

Finance minister’s comments

—“We inherited a sentiment of doom and gloom. The investment community had almost written us off. We have come a long way since then."

—“We have turned around the economy, dramatically restoring macroeconomic stability and creating the conditions for sustainable poverty elimination, job creation, durable double digit economic growth."

—“While being mindful of the challenges...this gives us reason to feel optimistic."

—“Domestic and international investors are seeing us with renewed interest and hope."

Narendra Modi on Twitter

—“2015 Budget will further reignite our growth engine, signalling the dawn of a prosperous future"

—“Budget is investment friendly and removes all doubts on tax issues. It assures investors that we have a stable, predictable and fair tax system.

Market reaction

—BSE index gains 0.48%; NSE index up 0.65%

—ITC slumps after budget hikes excise duty on cigarettes