Booster Dose
Current government thinking appears to favour reflation; the belief that government spending on infrastructure and defence can provide a significant boost to the economy appears to have gained ground. There are indications that suggest the prevalence of a view that India can afford a fiscal expansion through increased borrowing to push growth. And so, public sector investment is likely to be the preferred mode of investment. This was the thinking behind this year’s expansionary Railway Budget. Green shoots of significant investments in infrastructure will, indeed, benefit the Indian markets over the medium term. As this Cover Story goes to print before the Budget is presented, we await evidence of whether the Union Budget will boost public investment through fresh borrowing. Read our Cover Story to know how government spending can have far-reaching changes. 
The leak of classified documents from the petroleum ministry may have stunned a few. However, those connected with the media, big business houses or government interaction know that far worse happens in government. In her Different Strokes column, Sucheta shares her own experience of such shenanigans—from the breathtaking e-stamping scam to the Sahara bubble and the various other incidents that show the tricks used by corporates and middlemen to gain unfair advantage.
Despite being the largest stakeholder in the banking system, the voice of bank customers is most feeble. In her Crosshairs column, Sucheta writes that neither the banks nor the regulators care about the bugs, or design flaws, in the use of banking technology that cause enormous hardship to consumers.
Registration for Moneylife Foundation’s International Women’s Day event on 8th March is almost full. This time, Union minister of state for commerce and industry, Nirmala Sitharaman, will be delivering the keynote address. This will be followed by an interesting music recital. If you have not yet registered, do so now at


Budget 2015 Highlights
Here the highlights of the Budget for 2015-16, as announced by Finance Minister Arun Jaitley in the Parliament
Union Minister for Finance Arun Jaitley on Saturday presented in Parliament the Budget 2015-16, with a focus on growth, promoting entrepreneurship and manufacturing, rationalizing tax regime and announcing some relief to common man. 
Here are the highlights of the Budget…

Personal Finance

Govt. to introduce Gold Monetization Scheme, Sovereign Gold Bonds and Gold coins with Ashok Chakra
For contribution to National Pension Scheme, exemption raised to Rs1.5 lakh from Rs1 lakh
Increase in the limit of deduction in respect of health insurance premium to Rs25,000 from Rs15,000.
For senior citizens the limit will stand increased to Rs30,000 from the existing Rs20,000.
For very senior citizens of the age of 80 years or more, who are not covered by health insurance, deduction of Rs30,000 towards expenditure incurred on the treatment will allowed.
All contributions to Sukanya Samridhi scheme to be tax-free.
Individual tax payer will benefit to the extent Rs4,44,200 from the exemptions announced

Taxation and Tax regime

GST to put in place state of art indirect tax system by April 1st 2016
Internationally competitive Direct Tax regime to be put in place, which will be stable and non-discriminatory.
Applicability of GAAR deferred by two years ; will only apply prospectively after Apr 2017
Basic rate of CorporateTax to be reduced from 30% to 25% in next 4 years; to be accompanied by reducing exemptions
Wealth Tax to be abolished; 2% surcharge on super-rich having income over Rs 1 crore. This will net an additional tax revenue of Rs 9,000 crores
Service Tax increased to 14%.
Custom duty on raw materials and intermediaries to be reduced
Clean energy cess increased from 100 to 200 Rupees per metric ton of coal to finance Green Energy Fund.  Renewable energy target revised to 175,000 Mw.
Direct tax proposals will lead to loss of Rs8,315 crore Indirect proposal will yield Rs23,383 crore


India set to be the fastest growing large economy in the world.  
Double digit growth seems feasible
Real GDP expected to accelerate to 7.4% during the current fiscal. 
Foreign Exchange reserves at $340 billion

Public Finance

Fiscal deficit target of 3% to be achieved over next three years, instead of two.  
4.1 % target being met this year, despite tax buoyancy being lower. 
Roadmap to achieve Fiscal deficit of 3% of GDP in three years: Target is 3.9% in 2015-16, 3.5% in 2016-17, 3% in 2017-18.
Following 14th Finance Commission recommendations, states will get higher resources. 68% of total revenues will now be in the hands of states, ushering in an era of cooperative federalism. 
Budget Estimates of Expenditure: Rs17.77 lakh crore of which Non Plan is Rs13.12 lakh crore and Plan is Rs4.65 lakh crores
Direct Tax collection to be Rs14.49 lakh crore rupees



Agriculture & Rural Development

Rs5,300 crore to be spent on micro-irrigation
Target of Rs8.5 lakh crore credit to be given to farmers in 2015-16
Rural Infrastructure Development Fund to be--Rs25,000 crore
Highest ever allocation for MGNREGA, by increasing it this year by Rs5,000 crore

Industry & Infrastructure 

Focus on making India a manufacturing hub to ensure employment to our youth.
Make in India to promote entrepreneurship by making our youth job creators than being job seekers. 
National Investment & Infrastructure Fund announced.
PPP model to be revised and revitalized. Public investment to be stepped up to catalyze private investments.
Increased Budgetary allocation to Roads & Railways; Tax-free infra bonds for Rail, Roads transport projects
5 Ultra Mega power projects, of 4000 MW announced
Ports in public sector will be encouraged to corporatize & become companies under companies act

Banking & Finance

Mudra Bank to be set up to refinance micro finance institution under PMs Mudra Scheme, with a corpus of Rs20,000 crores.  It will fund the unfunded entrepreneurs. 
Government to do away with distinctions between FII and FDI and replace it with Composite Caps.
Government to utilize vast postal network for increasing access to institutional banking in order to promote financial inclusion.



Comprehensive new law to track black money to be framed. 10 years rigorous imprisonment proposed under the law.
Benami transaction prohibition Bill to be introduced in this session
Forward Markets Commission to be merged with SEBI to create a better integrated regulatory system. 
Govt. to bring a Comprehensive Bankruptcy code for the ease of doing business by 2015-16
Govt. plans an expert committee for Drafting Legislation for Regulatory mechanism

Social Welfare

Better targeting of subsidies is the need of the hour. Direct Benefit Transfer scheme to be scaled up many folds to ensure plugging of leakages. 
Government to launch PM Suraksha Bhima Yojana, offering coverage of Rs2 lakh for just premium of Rs12. 
PM Surakhsha Bhima Yojana to increase the access to insurance; it will be linked with Jan Dhan Yojana. 
Senior citizens welfare fund to subsidise the premium for elderly people
Nai Manzil - A new scheme for empowering minority youth announced.
Under Swachch Bharat,  50 lakh toilets have already been built, 6 crore toilets targeted to be constructed.


AIIMS to be set up in J&K, Punjab, Tamil Nadu, Himachal Pradesh and Assam
ISM Dhanabad will be upgraded to full IIT.  Karnataka to get a new IIT.


Visa –on-Arrival facility to be increased to 150 countries from the present 43, to promote tourism. 



Budget 2015: Gold monetisation scheme announced

The government is introducing a gold monetisation scheme, which will replace the present gold deposit and gold metal loan schemes


Finance Minister Arun Jaitley on Saturday announced gold deposit accounts to utilise the 20,000 tonnes available within the country. He also announced launch of a sovereign bond as an alternative to buying the metal, moves that are likely to cut imports into the world's biggest gold consumer.
Jaitley said, "Stocks of gold in India are estimated to be over 20,000 tonne but mostly this gold is neither traded, nor monetized. The Gold Monetisation Scheme will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks and other dealers would also be able to monetize this gold."
India ships in 800-1,000 tonnes of gold a year despite massive stocks in the country that is neither traded nor monetised, Jaitley said.
According to the Finance Minister, the Government will commence work on developing an Indian Gold Coin, which will carry the Ashok Chakra on its face. "Such an Indian Gold Coin would help reduce the demand for coins minted outside Indian and also help to recycle the gold available in the country," he added.
Jaitley also announced development of an alternate financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold. He said, "The Bonds will carry a fixed rate of interest, and also be redeemable in case in terms of the face value of the gold, at the time of redemption by the holder of the Bond." 



MG Warrier

2 years ago

This is a most welcome initiative.
Please read my article "How about revisiting the idea of Gold Bank?" currently available at and The Hindu Business Line article "Gold management needs a makeover" published on April 12, 2012.

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)