In his maiden Budget, Jaitley aims to revive investment climate in the country, lays emphasis on fiscal consolidation and also provides some sops for the common man in the form of Income Tax rebates
Her are the Highlights of the Budget:
• No change in Income Tax rates
• Tax exemption limit increased from Rs2 lakh to Rs2.5 lakh; Tax exemption limit for senior citizens increased to Rs3 lakh from Rs2.5 lakh
• Increase in investment limit under Section 80C to Rs1.5 lakh from Rs1 lakh
• Housing loan rebate has been hiked to Rs2 lakh from Rs1.5 lakh for self occupied property
• Public Provident Fund (PPF) investment limit increased to Rs1.5 lakh from current Rs1 lakh
• Kisan Vikas Patra (KVP) is being re-introduced to encourage rural people to invest in this instrument
• Special scheme to encourage saving for girl child education and marriage to be introduced
• 60 more Ayakar Sewa Kendras to be set up across the country
• Government committed to providing stable and predictable tax regime that will protect investment and spur growth
• The govt will not ordinarily change policies retrospectively which creates a fresh liability
• Govt proposes to strengthen authority for advance ruling in tax, set up more benches.
• All future indirect transfers under the retro tax regime will be scrutinised by a high level committee of CBDT before action is taken
• Expenditure Management Commission will be constituted to look at expenditure reforms
• Changes in transfer pricing regulation proposed
• Government committed to achieve fiscal deficit of 4.1% for 2014-15: Fiscal deficit target of
• 3.4% in 2015-16 and 3% in 2016-17 to be set
• Revenue deficit pegged at 2.9% of GDP
• Non-plan expenditure pegged at Rs12.2 lakh crore for 2014-15, including fertilizer subsidy and defence spending
• Gross tax receipts pegged at Rs13.64 lakh crore; non-tax revenues Rs2.13 lakh crore; capital receipt Rs73,000 crore in 2013-14
• Pradhan Mantri Krishi Sinchayin Yojana" to be started for irrigation development
• Technology driven second Green Revolution with focus on “Protein revolution” to be implemented
• Government proposes to provide finance to five lakh landless farmers through NABARD
• Govt will initiate scheme to provide a soil health card; Rs100 crore set aside. Rs56 crore for soil testing labs across country
• A new urea policy to be formulated
• National Adaption Fund for climate change to be set up
• Agriculture University in Andhra Pradesh (AP) and Rajasthan, and Horticulture University in Haryana and Telangana proposed. Rs200 crore set aside
• Rs14,389 crore outlay for Pradhan Mantri Gram Sadak Yojana for development of rural roads
• Rs3,600 crore set aside for National Rural Drinking Water for providing safe drinking water in 20,000 habitations
• Deen Dayal Upadhaya Gram Jyoti Yojana to be launched to augment power supply in rural areas
• Shyama Prasad Mukherji Rurban Mission will be launched to deliver integrated project based infrastructure in the rural areas
• "Swach Bharat Abhiyaan” to be launched aimed at total sanitation
• National Rural Internet and Technology Mission to be started
• FDI in Defence sector raised to 49% from 26%
• War memorial to be set up along with a war museum; Rs100 crore set aside for this
• Rs5,000 crore set aside for defence outlay over and above amount provided under interim budget; Total outlay Rs2.29 lakh crore
• Definition of MSME to be revised for high capital ceiling
• Rs10,000 crore venture capital fund to be set up for MSME sector
• Investment allowance at 15% for three years to manufacturing companies which invest more than Rs25 crore in plant and machinery
• 10-year tax holiday to be extended to companies that start power generation by 31 March 2017
• Biotech clusters to be set up in Bangalore and Faridabad to take science and technology to new heights
• Eight mega Textile Clusters at Varanasi, Bareily, Lucknow, Surat, Kuttch, Bhagalpur, Mysore and one in Tamil Nadu to be set up
• Trade facilitation centres will be set up at a cost of Rs50 crore to help hand-loom development
• Basic Custom duties reduced on certain items to encourage investment and domestic production, they include LCD, LED TV panels, machinery required for setting up Bio-CNG plants
• Basic customs duty reduced on items used in chemical and petrochemical sector to encourage investment
• Manufacturing units will be allowed to sell their products through retail and e-commerce
• Apprentice Act to be suitably amended to strengthen the Apprentice Training Scheme
• Institutions to mainstream PPP projects to be set up; priority being given to shipping, inland waterways, airports and road development
• National Industrial Corridor Authority, with its head-quarter at Pune, is being set-up with an amount of Rs100 crore, to coordinate the development of industrial corridors with smart cities
• Rs4,200 crore set aside for Jal Marg Vikas project on river Ganga connecting Allahabad to Haldia, a distance of over 1620 kms
• Namami Gange", an integrated Ganga Development Project announced; Rs2,037 crore set aside for this
• NRI fund for conservation of river Ganga to be set up
To complete gas grid,15,000 kms of additional pipeline to be developed through the PPP mode
• Metro rail services to be launched in Lucknow and Ahmedabad; Rs100 crore set aside for it
• Rs7,060 crore outlay for the development of 100 smart cities
• Urban renewal to address drinking water, use of recycled water,solid waste management, digital connectivity
• Mission for low cost housing proposed to incentivise development of low cost housing; Rs400 crore announced
• Slum development to be included in Corporate Social Responsibility activities
• National Housing Banking programme announced with an outlay of Rs8,000 crore
BANKING & FINANCE
• A Financial Inclusion Mission will be launched from Independence Day this year as a time bound programme to provide all households in the country with banking services
• Reserve Bank of India (RBI) to Create A Framework for Licensing Small Banks
• Six new Debt Recovery Tribunals at Chandigarh, Bangalore, Hyderabad, Ernakulam, Dehradun, and Siliguri to address the problem of Non Performing Assets (NPAs).
• FDI in insurance sector is being increased to 49% from the current level of 26% with full Indian management and control
EDUCATION AND HUMAN RESOURCES DEVELOPMENT (HRD)
• A national multi-scale programme called Skill India to be introduced to provide training and support for employment
• Five new IITs in Jammu, Chhatisgarh, Goa, Andhra Pradesh and Kerala to be set up
• Five new IIMs in HP, Punjab, Bihar, Odisha and Maharashtra to be set up
• Four new AIIMS to be set up in AP, West Bengal, Maharashtra (Vidarbha) and Uttar Pradesh (Purvanchal)
• Jai Prakash Narayan National Centre for Excellence in Humanities to come up in Madhya Pradesh
• Rs100 crore set aside for Community Radio Centres; 600 new and existing ones to be supported
• 'Kisan' TV channel to be launched by DD at cost of Rs100 crore: Rs100 crore for Community radio stations proposed
• 24 x 7 Arun Prabha channel announced for the North Eastern region
• Govt to set up national sports academy for different sports in different parts of India
• Sports University to be set up in Manipur; Rs100 crore provided in current financial year
• In order to give major boost to tourism, e-visas would be introduced at nine airports. This facilitates visas on arrival
• Rs200 crore set aside to support Gujarat govt in the Sardar Patel statue installation
• Subsidy regime to be made more targeted to provide full protection to the marginalized, SCs and STs
• Rs100 crore allocated for the modernization of Madarsas; Program for up-gradation of skills and ancient arts for the minorities to be implemented
• Rs50,548 crore proposed for SC development
• Fifteen new Braille presses to be established to produce literature for visually impaired; Govt to print currency notes with Braille like signs to help the blind
• “Beti padhao, beti badhao yojana” announced to promote girl child education. Outlay Rs100 crore
• Crisis Management Centre for women to be set up in Delhi
Jaitley said, the Modi government hopes to bring a final solution this year and approve the legislative scheme which enables introduction of GST across the country
Finance Minister Arun Jaitley on Thursday said a solution to the issues relating to expeditiously rolling out goods and services tax (GST) may be finalised in the current year itself.
While presenting his maiden Budget for 2014-15, the finance minister said, "I do hope we are able to bring a final solution in the course of this year and approve the legislative scheme which enables introduction of GST. This would streamline tax administration and avoid harassment of business and result in higher tax collection both for centre and states."
The GST regime aims at subsuming most of the indirect taxes at the central as well as states' level. The United Progressive Alliance (UPA) government in 2011 introduced a Constitutional Amendment Bill in the Lok Sabha to pave the way for introduction of GST.
The debate on whether to introduce GST must come to an end now, Jaitley said, adding, "we have discussed the issue for past many years. Some states have been apprehensive about surrendering tax jurisdiction others want to be adequately compensated".
He assured all states that government would be more than fair in dealing with states.
Finance Minister Arun Jaitley increased the foreign direct investment limit in insurance and defence to 49% from the current 26% through the FIPB route
Presenting the first Budget of the Narendra Modi government, finance minister Arun Jaitley increased the foreign direct investment limit in insurance and defence to 49% from the current 26%.
"The insurance sector is investment starved. Several segments of insurance sector need expansion. The composite cap of the insurance sector is proposed to be increased to 49% from the current level of 26% with full management and control through the Foreign Investment Promotion Board (FIPB) route," he said while presenting the Budget for 2014-15.
The move would help insurance companies to get much needed capital from overseas partners.
The proposal to raise FDI cap has been pending since 2008 when the previous United Progressive Alliance (UPA) government came up with Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49 % from the existing 26 %.
He said the government will take up the Bill soon.
On defence sector, Jaitley said the composite cap of foreign exchange is being raised to 49% with full Indian management and control through the FIPB route. Currently, the government permits 26% FDI in defence manufacturing.
"India today is a largest buyer of defence equipment in the world. Our domestic manufacturing capabilities are still at a nascent stage,” he said.
"We are buying a substantial part of our defence requirements directly from foreign players, companies controlled by foreign governments and foreign private parties are supplying our defence requirements to us at a considerable outflow of foreign exchange," he added.
Further, to encourage development of smart cities which will also provide habitation for the new middle class, the Finance Minister announced that the requirement of the built up area and capital conditions for FDI is being reduced from 50,000 sq m to 20,000 sq m and from $10 million to $5 million respectively with a three years post completion lock in.