BackHighlights of Union budget 2016-17
Here are the key highlights of finance minister Arun Jaitley's Union budget 2016-17 speech
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Finance minister Arun Jaitley presented Union Budget 2016-17 in Parliament on Monday. Here are the key highlights of his speech:
•Cabinet approves Union Budget for 2016-17
•We believe in the principle that money with the govt belongs to the people: Arun Jaitley
•We must strengthen firewalls against risks through structural reforms, rely on domestic market so that growth does not slow down: Jaitley
•We had to work in an unsupportive global environment and obstructive political atmosphere: Jaitley
•CPI inflation was 9.4% in the last 3 years of previous government. It has come down to 5.5% now: FM
•Indian growth is extraordinarily high; we converted difficulties and challenges into opportunity: FM
•Growth has accelerated to 7.6% in 2015-16 notwithstanding contraction of global exports: FM
•Current account deficit has declined to $14.4 billion this year, will be 1.4% of gross domestic product (GDP) at the end of fiscal: FM
•The risk of global slowdown is mounting, complicating economic management for India: FM
•We see these challenges as opportunities
•FY17 will cast an additional burden due to One Rank One Pension, Seventh Pay Commission recommendations
•We wish to provide for recapitalization of banks
•Focus to pass GST and bankruptcy code
•Three major schemes to help underprivileged: Pradhan Mantri Fasal Yojana, health insurance scheme, launching initiative to ensure LPG connection for BPL families
•Key points to look forward to: Incentivize gas discovery and exploration of gas, dispute resolution in PPP projects, banking sector reforms
•Govt will undertake nine-point reforms including steps to ensure ease of business in governance, fiscal discipline to ensure benefits for people
Agriculture and farmers’ welfare:
•Look to double farmer income by 2020
•Govt will reorient interventions in farming sector; we need to optimally utilize water resources
•28.5 lakh hectares will be brought under irrigation
•A dedicated irrigation fund with ₹ 20,000 crore under Nabard
•Major programme for sustainable groundwater management
•Govt to set apart ₹ 412 crore to encourage organic farming
•Access to market is critical for farmers
•Implementing Pradhan Mantri Gram Sadak Yojana as never before—scheme to be allocated ₹ 19,000 crore in FY17; ₹ 27,000 crore in total—to advance completion target to 2019 from 2022
•To support farmers after calamities, special focus has been given to ensure timely flow of credit, target is ₹ 9 trillion in FY17
•We have to ensure benefit of minimum support price reaches all parts of country—remaining states will be encouraged to take up decentralized procurement, effective arrangement of pulse procurement
•E-market portal for connecting breeders and farmers
•Visible rise in yield of honey
•90% of domestic honey is now exported
•Allocation of ₹ 35,984 crore for farm sector: FM
Rural areas:
•Cluster-facilitation teams under MGNREGA to optimize water resources
• ₹ 38,500 crore allocated for MNREGA in 2016-17, the highest ever if entire amount is spent
•As of 1 April 2015, 18,542 villages were not electrified—as on 23 Feb 2016, 5,542 villages have been electrified
•2.87 trillion to be given grant-in-aid for gram panchayats and municipalities; it is quantum jump of 228%
•Govt committed to achieve 100% village electrification by 1 May 2018
•We need to spread digital literacy in rural areas—plan to launch digital literacy mission for more than 6,000 households in rural areas
•Modernization of land records essential—to be implemented as a central sector scheme
•Govt to develop 300 ‘rurban’ clusters
Social sector
•To embark on scheme to provide LPG connections in womens’ names
•Gratitude to 75 lakh households that have given up LPG subsidies
•Almost 2.2 lakh new patients of end-stage renal diseases get added in India every year
•Propose to start National Dialysis Programme with fund generated under PPP scheme
•3,000 stores to be opened for quality medicines under PM Jan Ausadhi Yojana in 2016-17
•SC and ST entrepreneurs— ₹ 500 crore to promote this under Stand-Up India
•Next big step by focusing on quality education—commitment to improve higher education institutions
•Decided to set up a higher education financing agency (non-profit)—initial corpus of ₹ 1,000 crore
•Digital depository for school-leaving certificates other academic certificates
•Entrepreneurship education and training o be provided in schools and colleges
Job creation:
•Will pay EPF contribution of 3.33% for all new employees joining EPFO to incentivize employers
•National Career Service—35 million job-seekers have registered; propose to interlink state employment exchanges with National Career Service
•Retail trade—biggest employer in country
•Small and medium-shops should be given option to remain open all 7 days on voluntary basis
•Model shops bill on voluntary basis for states to be adopted
Infra and investment:
•Roads sector: Nearly 85% of stalled projects back on track
•Speeded up road construction—to allocate ₹ 55,000 crore for roads and highways, additional ₹ 15,000 crore to be raised by National Highways Authority of India (NHAI) through bonds. Total allocation of ₹ 97000 crore.
•Total allocation of ₹ 2.18 trillion for roads and railways
•Pace of completion of road projects to rise to 10,000km in 2016-17
•Total outlay for infrastructure in Budget Estimates is at ₹ 2.21 trillion
•Passenger traffic on roads more efficient now—This is a totally unreformed sector; absolution of Permit Raj is the medium-term goal; to open up road transport sector in passenger segment; states will have choice of adopting new legal framework; provision for more efficient public transport sector
•Ports—to develop new greenfield ports
•Civil aviation—plan for reviving underserved airports; to partner with state govts to develop some of these airports
•Natural resources: To incentivise gas production from deep sea, high temperature areas
•Govt has achieved highest coal production growth in over 2 decades
•Power sector—drawing up plan spanning 15-20 years to augment capacity in nuclear power sector
•Initiative to reinvigorate private sector—public utility resolution of dispute bills; new credit rating system for infrastructure
•Further reforms in FDI policy—area of insurance and pension, stock exchanges etc
•Duty drawback scheme widened to include more products, countries
•FDI policy should address farmers, food processing industry—100% FDI through Foreign Investment Promotion Board route for marketing of food products produced and processed in India
•Department of disinvestment to be renamed
Financial sector reforms:
•Bankruptcy code to be introduced
•RBI Act 1934 to be amended to provide statutory basis for monetary policy framework
•Financial data management centre to be set up
•New derivative products
•Stressed assets—ARCs have an important role—necessary amendment to Sarfaesi Act will be done
•Central legislation to deal with fraudulent schemes
•To amend Sebi act for more benches for SAT
•Banks— ₹ 25,000 crore to be provided for recapitalization of public sector banks, which are grappling with stressed assets; Govt stands solidly behind these banks.
•Banking board bureau to be operationalized during this year
•Debt recovery tribunals to be strengthened for speedier dispute resolution
•To undertake massive rollout of ATMs over next 3 years
•Insurance firms owned by government will be listed on stock exchanges
Ease of doing business:
•Initiatives include introducing targeted delivery of subsidies through Aadhaar, with a social security platform for use of Aadhaar; direct benefit transfers on a pilot basis for fertilizers
•Bill to amend Companies Act—enabling environment for start-ups
•Create closer engagement between states and districts—Ek Bharat, Shresth Bharat
•70th anniversary of Independence in 2017—Ek Bharat, Shresth Bharat is a part of this mission
Fiscal situation:
•Fiscal Responsibility and Budget Management (FRBM) roadmap: Prudence lies in adhering to fiscal targets
•Budget and Revised estimates for FY15-16 at 3.9% and 3.5% of GDP respectively
•Total expenditure in budget— ₹ 19.78 trillion
•Retaining fiscal deficit target at 3.5% for FY17
•Plan/Non-plan classification to be done away with from FY17-18
•Revenue deficit target at 2.5% of GDP
•FRBM: Better to have a fiscal target range; Must review working of this Act—to set up A committee to review FRBM
•Seventh Pay Commission—Made interim provisions while recommendations are being reviewed—restructured more than 1,500 central schemes; Allocated ₹ 100 crore each for celebrating birth anniversaries of Pandit Deendayal Upadhyay and Guru Gobind Singh
Tax reforms:
•Relief to small taxpayers, measures for moving towards pension society, reducing litigation, simplification of taxation
•Ceiling of tax rebate at ₹ 5,000 for income less than ₹ 5 lakh
•Relief to people living in rented houses—Deduction for rent paid will be raised from ₹ 20,000 to ₹ 60,000 to benefit those living in rented houses
•Presumptive taxation schemes—to increase turnover limit to ₹ 2 crore—relief for many in MSME category
•Extend presumptive taxation scheme to all professionals with gross receipts up to ₹ 50 lakh
•Corporate tax rate reduction should be calibrated with benefits of phasing out exemptions
•Corporate tax rate for establishments with turnover less than ₹ 5 crore lowered to 29% of surcharge plus cess
•Make in India—100% deduction of profits for start-ups adhering to certain conditions; MAT will apply
•To implement GAAR from 1 April 2017
•To reduce customs duty on refrigerated containers
•Exemptions for braille paper
•Pension society—Exemption of service tax for NPS, EPFO to employees
•Affordable housing—100% deduction on profits for flats up to 30 sq.m in metro cities from 2016-19; MAT will apply
•First-time home buyers—relief on housing loans for up to ₹ 50 lakh
•Surcharge on luxury cars costing more than ₹ 10 lakh
•0.5% Krishi Kalyan surcharge cess on all taxable services from 1 June 2016, to be given to agriculture development
•Environment—Pollution cess on all vehicles
•To impose additional duty on jewellery
•Change excise duty on branded ready-made garments
•Revive clean energy cess on coal, others
•Increase duty on tobacco products (other than beedi) by 10-15%
Reducing litigation:
•Tax evasion will be countered strongly
•Limited period compliance window to declare undisclosed income
•Black money—3 lakh tax cases pending before authority—a new dispute resolution scheme will be set up where taxpayer can settle case by paying disputed tax and interest with certain conditions
•On retrospective tax amendments—committed to providing stable tax regime; committee will be chaired by revenue secretary
•One-time scheme for dispute resolution for pending retrospective tax amendment case
•Justice Easwar committee recommendation—abolishing 13% cesses levied by various ministries
•Rationalizing TDS provisions for income tax
•Non-residents without PAN—higher rate won’t apply on furnishing alternate ID
•To amend customs act
Use of technology:
•Will use technology in tax department in a big way
•To expand scope of e-assessment for taxpayers in 7 big cities
•Govt will pay interest @9% in case of delay in giving appellate orders beyond 90 days
•Impact of tax proposals will lead to revenue gain of ₹ 19,610 crores
•Conclusion of budget speech
•Introduction of Finance bill 2016
•House adjourned to meet on Tuesday at 11am
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