Finance
Minister Sri. Arun Jaitley, presented the Union Budget for the year 2016-17
on 29/02/2016.This is his 3rd Union Budget. With an eye on supporting the small
tax-payer and the small investor, the Minister announced a slew of schemes, and
income tax exemptions. Here are the Highlights of Union Budget 2016.
INTRODUCTION
o Growth
of Economy accelerated to 7.6% in 2015-16.
o Robust growth achieved despite very
unfavourable global conditions and two consecutive years shortfall in monsoon
by 13%§India hailed as a ‘bright
spot’ amidst a slowing global economy by IMF.
o Despite increased devolution to States by 55%
as a result of the 14th Finance Commission award, plan expenditure increased at
RE stage in 2015-16 – in contrast to earlier years.§Foreign exchange reserves touched highest ever level of about
350 billion US dollars.
Nine pillars of the Budget
1.
Governance,
2.
Ease of doing business,
3.
Fiscal discipline,
4.
Tax reforms,
5.
Agriculture and farmers welfare ,
6.
Rural sector with focus on employment ,
7.
Social sector with healthcare ,
8.
Educational skills and job creation ,
9.
Infrastructure and Investment and financial sector reforms are
the nine pillars on which the budget has been prepared.
CHALLENGES IN 2016-17
o Risks
of further global slowdown and turbulence.
o Additional
fiscal burden due to 7th Central Pay Commission recommendations and OROP.
o
ROADMAP & PRIORITIES
o 'Transform
India' to have a significant impact on economy and lives of people.
o Government
to focus on –
o ensuring
macro-economic stability and prudent fiscal management.
o boosting
on domestic demand
o continuing
with the pace of economic reforms and policy initiatives to change the lives of
our people for the better.
o Focus
on enhancing expenditure in priority areas of - farm and rural sector, social
sector, infrastructure sector employment generation and recapitalisation of the
banks.
o Focus
on Vulnerable sections through:
o Pradhan
Mantri Fasal Bima Yojana
o New
health insurance scheme to protect against hospitalisation expenditure
o facility
of cooking gas connection for BPL families
o Continue
with the ongoing reform programme and ensure passage of the Goods and Service
Tax bill and Insolvency and Bankruptcy law
o Undertake
important reforms by:
o giving
a statutory backing to AADHAR platform to ensure benefits reach the deserving.
o freeing
the transport sector from constraints and restrictions
o incentivising
gas discovery and exploration by providing calibrated marketing freedom
o enactment
of a comprehensive law to deal with resolution of financial firms
o provide
legal framework for dispute resolution and re-negotiations in PPP projects and
public utility contracts
o undertake
important banking sector reforms and public listing of general insurance
companies undertake significant changes in FDI policy.
Sector-wise Highlights of Union Budget 2016
o Tax
o Infrastructure
and agriculture cess to be levied.
o Excise
duty raised from 10 to 15 per cent on tobacco products other than beedis
o 1 per
cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash
purchase of goods and services over Rs. 2 lakh.
o SUVs,
Luxury cars to be more expensive. 4% high capacity tax for SUVs.
o Companies
with revenue less than Rs 5 crore to be taxed at 29% plus surcharge
o Limited
tax compliance window from Jun 1 - Sep 30 for declaring undisclosed income at
45% incl. surcharge and penalties
o Excise
1 per cent imposed on articles of jewellery, excluding silver.
o 0.5 per
cent Krishi Kalyan Cess to be levied on all services.
o Pollution
cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel
cars of certain specifications; 4 per cent on higher-end models.
o Dividend
in excess of Rs. 10 lakh per annum to be taxed at additional 10 per cent.
o Personal
Finance
o No
changes have been made to existing income tax slabs
o Rs
1,000 crore allocated for new EPF (Employees' Provident Fund) scheme
o Govt.
will pay EPF contribution of 8.33% for all new employees for first three years
o Deduction
for rent paid will be raised from Rs 20,000 to Rs 60,000 to benefit those
living in rented houses.
o Additional
exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of
house is not above Rs. 50 lakh.
o Service
tax exempted for housing construction of houses less than 60 sq. m
o 15 per
cent surcharge on income above Rs. 1 crore
o Social
o Rs.
38,500 crore for Mahtma Gandhi MGNREGA for 2016-17
o Swacch
Bharat Abhiyan allocated Rs.9,500 crores.
o Hub to
support SC/ST entrpreneurs
o Government
is launching a new initiative to provide cooking gas to BPL families with state
support.
o LPG
connections to be provided under the name of women members of family: Rs 2000
crore allocated for 5 years for BPL families.
o 2.87
lakh crore grants to gram panchayats and municipalities - a quantum jump of
228%.
o 300
urban clusters to be set up under Shyama Prasad Mukherji Rurban Mission
o Four
schemes for animal welfare.
o Health
o 2.2
lakh renal patients added every year in India. Basic dialysis equipment gets
some relief.
o A new
health protection scheme for health cover upto 1 lakh per family.
o National
Dialysis Service Prog with funds thru PPP mode to provide dialysis at all
district hospitals.
o Senior
citizens will get additional healthcare cover of Rs 30,000 under the new scheme
o PM Jan
Aushadhi Yojana to be strengthened, 300 generic drug store to be opened
o Education
o Scheme
to get Rs.500 cr for promoting entrepreneurship among SC/ST
o 10
public and 10 private educational institutions to be made world-class.
o Digital
repository for all school leaving certificates and diplomas. Rs. 1,000 crore
for higher education financing.
o Rs.
1,700 crore for 1500 multi-skill development centres.
o 62 new
navodaya vidyalayas to provide quality education
o Digital
literacy scheme to be launched to cover 6 crore additional rural households
o Entrepreneurship
training to be provided across schools, colleges and massive online courses.
o Objective
to skill 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojna-FM
Jaitley
o National
Skill Development Mission has imparted training to 76 lakh youth. 1500
Multi-skill training institutes to be set up.
o Energy
o Rs.
3000 crore earmarked for nuclear power generation
o Govt
drawing comprehensive plan to be implemented in next 15-20 years for exploiting
nuclear energy
o Govt to
provide incentive for deepwater gas exploration
o Deepwater
gas new disc to get calibrated market freedom, pre-determined ceiling price
based on landed price of alternate fuels.
o Investments
and infrastructure
o Rs.
27,000 crore to be spent on roadways
o 65
eligible habitats to be connected via 2.23 lakh kms of road. Current
construction pace is 100 kms/day
o Shops
to be given option to remain open all seven days in a week across markets.
o Rs.
55,000 crore for roads and highways. Total allocation for road construction,
including PMGSY, - Rs 97,000 crore
o India's
highest-ever production of motor vehicles was recorded in 2015
o Total
outlay for infrastructure in Budget 2016 now stands at Rs. 2,21,246 crore
o New
greenfield ports to be developed on east and west coasts
o Revival
of underserved airports. Centre to Partner with States to revive small airports
for regional connectivity
o 100 per
cent FDI in marketing of food products produced and marketed in India
o Dept.
of Disinvestment to be renamed as Dept. of Investment and Public Asset
Management
o Govt
will amend Motor Vehicle Act in passenger vehicle segment to allow innovation.
o MAT
will be applicable for startups that qualify for 100 per cent tax exemption
o Direct
tax proposals result in revenue loss of Rs.1060 crore, indirect tax proposals
result in gain of Rs.20,670 crore
o Agriculture
o Total
allocation for agriculture and farmer welfare at Rs 35984 crores
o 28.5
lakh heactares of land wil be brought under irrigation.
o 5 lakh
acres to be brought under organic farming over a three year period
o Rs
60,000 crore for recharging of ground water recharging as there is urgent need
to focus on drought hit areas cluster development for water conservation.
o Dedicated
irrigation fund in NABARD of Rs.20.000 cr
o Nominal
premium and highest ever compensation in case of crop loss under the PM Fasal
Bima Yojna.
o Banking
o Banks
get a big boost: Rs 25,000 crore towards recapitalisation of public sector
banks. Jaitley says: Banking Board Bureau will be operationalised, we stand
solidly behind public sector banks.
o Target
of disbursement under MUDRA increased to 1,80,000 crore
o Process
of transfer of government stake in IDBI Bank below 50% started
o General
Insurance companies will be listed in the stock exchange
o Govt to
increase ATMs, micro-ATMs in post offices in next three years
