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Highlights of Union Budget for 2016-17

Highlights of the Union Budget for 2016-17 , presented by Finance Minister in the Lok Sabha:

  • Our external situation is robust
  • Global economy in serious crisis
  • Global trade has contracted
  • India GDP has accelerated to 7.6% now
  • Pay panel, defence pension to add to spending in FY17
  • FY16, FY17 will be extremely challenging for govt spend; Plan spend increased under FY16 revised estimates
  • Forex reserves highest ever at $350 bln
  • FY16 CAD projected at 1.4% of GDP
  • To make significant changes in FDI policy
  • To incentivise gas exploration
  • Aim to work on passage of GST, Bankruptcy Code
  • FY17 priority to give additional resources to rural areas
  • Need to provide for bank recapitalisation
  • Must prioritise spending in FY17
  • Managed to improve FY16 fincl condition on revenue buoyancy
  • Infra invest to enhance quality of life
  • To have prudent mgmt of govt expenses for fiscal prudence
  • To focus on tax reforms
  • To undertake tax reform to improve compliance
  • To focus on prudent mgmt of govt finance
  • To focus on governance, ease of doing business
  • To focus on infra investment
  • To provide dispute resolution for PPP platform
  • Allotted 90 bln rupees for Swachh Bharat mission
  • Allotted 1.5 bln rupee for land record digitalisation FY17
  • 7.5 mln households gave up LPG subsidy
  • Jaitley sits down, continues Budget speech
  • 1 bln rupees for birth anniversary of Guru Gobind Singh
  • 1 bln rupees for birth anniversary of Deen Dayal Upadhyay
  • Interim provision made for pay panel suggestions execution
  • Committed to fincl requirements of announced econ packages
  • Made interim provision for seventh pay panel
  • To up MSME category turnover cap to 20 mln rupees
  • To drive towards self-sufficiency in hydrocarbon sector
  • Jaitley stands up, continues Budget speech

Fiscal Health

  • To have fiscal deficit target range
  • FY17 fiscal deficit target at 3.5% of GDP
  • FY16 fiscal deficit pegged at 3.9% of GDP
  • Prudence lies in adhering to fiscal targets

FY16 Revised

  • FY16 revenue deficit 2.5% of GDP
  • Ensured development agenda is not compromised

FY17 Estimates

  • FY17 total expenditure 19.78 trln rupee
  • FY17 total spend at 19.78 trln rupees
  • FY17 non-plan expenditure 14.3 trln rupees
  • FY17 plan expenditure 5.5 trln rupee
  • Total resources to states in FY17 at 996 bln rupees
  • To scrap plan, non-plan expenditure distinction
  • To do away with plan, non-plan classification of spending
  • Plan allocation to stress on rural, infra, social sectors

Direct Tax

  • Plan simplification, rationalisation of taxes
  • Tax rebate on rent paid upped to 60,000 rupees vs 24,000
  • Tax changes to support Make in India, affordable housing
  • To give relief to small taxpayers
  • To launch steps to move towards pension society
  • To give relief to small tax payers
  • Withdrawal upto 40% from Natl Pension plan to be tax exempt
  • To allow lower corporate tax for some cos from FY17
  • Reduction in corporate tax has to be calibrated
  • Faster depreciation rate under income tax act at 40% FY17
  • Reduction in corporate tax has to be caliberated
  • Detailing roadmap for phasing out corporate tax exemption
  • Propose 0.5% Krishi Kalyan cess on all taxable svcs Jun 1
  • Propose Krishi Kalyan cess
  • To raise surcharge on income over 10 mln rupees to 15%
  • 10% tax on recipient if got dividend over 1 mln rupees/yr
  • Some home buyers to get extra exemption of 50,000 rupee/yr
  • No changes in income tax slabs
  • To rationalize tax deducted at source for small tax payers
  • Penalty of 200% of tax for misreporting of income
  • Penalty of 50% of tax for under-reporting of income
  • Penalty to be 50% of tax in income under-reporting cases
  • Modifying scheme of penalty under Income Tax Act
  • Revenue secy to head committee on taxation
  • Committed to stable, predictable taxation regime
  • To focus on bringing to book people with black money
  • Prosecution immunity for undisclosed income declaration
  • 300,000 tax cases worth 5.5 trln rupees pending
  • New dispute resolution scheme for taxation proposed
  • Compliance window for undisclosed income Jun 1-Sep 30
  • 7.5% surcharge on undisclosed income in compliance window
  • Govt committed to removing black money
  • To move towards low tax regime with non litigious approach
  • Limited period compliance window on undisclosed income
  • To strongly counter tax evasion
  • Moving towards a low tax regime

Indirect Tax

  • Propose changes in customs duty to push Make in India plan
  • Exempt svc tax on general insurance plans in Nirmaya scheme
  • Committed to implementing GAAR from Apr 1, 2017
  • Asset recast cos' income to be taxed at hands of investors
  • Propose special patent regime to power innovation, research
  • Services provided by EPFO exempted from service tax
  • STT of 0.05% on options contracts
  • Service tax waiver for houses of less than 60 sq mtr
  • Service Tax exempt for svc under rural electrification plan
  • To give excise duty exemption to ready-mix concrete
  • Excise of 12.5% with input tax credit on jewellery
  • To abolish 13 cesses by ministries
  • To amend Central Value Added Tax credit rules
  • To amend CENVAT credit rules
  • Taxation panel to fix demand under retrospective tax cases
  • Hope old cases on retrospective tax reach conclusion soon
  • No retrospective taxation to be undertaken
  • 1-time no-interest liability in retrospective tax cases
  • To up excise duty on various tobacco products by 10-15%
  • Cos incorporated post Mar 1 to be taxed at 25%+ surcharge
  • Doubles clean energy cess on coal to 400 rupees/tn
  • To up excise duty on some tobacco pdts by 10-15%
  • Infra cess of 2% on diesel cars
  • 4% infra cess on high capacity vehicles, SUVs
  • To levy 1% infra cess on small petrol, LPG, CNG cars

Infaltion

  • CPI inflation came down to 5.4% under our govt
  • Fall in CPI inflation providing big relief to public

Farm Sector

  • Plan doubling farmers' income in 5 yrs
  • Plan to up spend on farm, rural, social sectors FY17
  • Need to create new infrastructure for irrigation
  • Need to address water resource utilisation
  • To allocate 359.8 bln rupees for farm, farmers' welfare
  • Need to give income security to farmers
  • Need to think beyond food security
  • To allocate 4.12 bln rupees for organic farming
  • Policy to convert city waste into compost
  • 140 mln farms to be covered by soil health card by Mar 2017
  • Fertiliser co to market city compost fertilisers
  • 600 bln rupees for sustainable mgmt of water resources
  • Soil health card plan being implemented with great vigour
  • To form 200 bln rupee long-term irrigation fund in NABARD
  • To allot 865 bln rupees in five yrs for irrigation schemes
  • To bring 2.85 mln ha under PM irrigation plan
  • To allocate 170 bln rupees for irrigation scheme FY17
  • FY17 Crop insurance scheme allocation 55 bln rupees
  • FY17 interest subvention for farmers seen 150 bln rupee
  • Farm credit target for FY17 at 9 trln rupees
  • 9.7 mln tn agri storage capacity added FY16
  • 3.68 bln rupees provided for soil health scheme FY17
  • 12 states have amended APMC Act to join e-market plan
  • Unified agri market e-platform to be launched on Apr 14
  • Plan e-market platform for agriculture wholesale markets
  • To allot 5 bln rupees under food security plan for pulses
  • 5 bln rupees for pulses production in 622 districts
  • 86,000 tn honey produced in FY16; 90% exported
  • Need to focus on drought-hit areas
  • Food Corp of India to make online payment of farm goods
  • To launch 4 new dairy programmes
  • To take up allied activities to increase farm income
  • To encourage states to take up decentralised procurement
  • Made effective mgmt for pulses procurement
  • MSP online procurement system through FCI
  • To encourage states for decentralised procurement of crops
  • Allocate 55 bln rupees for PM Fasal bima Yojna
  • Price stabilisation fund for pulses has 9 bln rupee corpus
  • To introduce direct benefit plan for fertiliser on pilot

Social Sector, Education

  • To focus on educational skills, job creation
  • Plan law to give statutory backing to Aadhaar
  • To announce health scheme covering 1/3rd of population
  • Health insurance, BPL cooking gas scheme planned
  • To focus on delivery of benefits to needy
  • Infra, social sectors to have more govt spend
  • BPL families to get LPG connection
  • Aim to list public sector general insurance cos
  • To undertake 3 major schemes for weaker sections of society
  • Self-help groups' set up hastened for livelihood generation
  • FY17 aid to gram panchayat, municipality at 2.87 trln rupee
  • Digital repository for educational certificates
  • Digital depository for school-, college-leaving documents
  • Education, skill development, jobs 4th pillar of Budget
  • To allot 10 bln rupee for higher education financing agency
  • 62 new Navodaya schools to focus on quality education
  • 1.52 trln rupees allocated for social sector
  • To form national scheduled caste, tribe hub in MSME min
  • Stand-up India scheme allocation 5 bln rupees
  • This must be year of empowering scheduled castes, tribes
  • 5 bln rupees for scheduled caste, tribe entrepreneurs
  • Aadhaar not to be proof of citizenship or domicile
  • Social security platform to be used for Aadhaar
  • Aadhaar bill to be introduced FY17
  • To introduce targeted delivery of subsidies via Aadhaar
  • Task force to rationalise human resources in ministries

Skill Development, Job Creation

  • 17 bln rupees for skill development scheme FY17
  • 1,500 multi-skill training institutes across country
  • To interlink national, state employee bureaus
  • Plan to set up 100 model career centres
  • 10 bln rupees for new EPF scheme
  • Govt to pay 8.33% EPF contribution for new staff 1st 3 yrs

Rural Development

  • Allocated 877.65 bln rupees for rural development FY17
  • Rural insurance scheme for farmers planned
  • To provide more funds to vulnerable sections in rural areas
  • Cluster facilitation under rural job plan to conserve water
  • 385 bln rupees for rural job plan FY17
  • See 228% jump in gram panchayat allotment
  • To focus on rural employment, infrastructure
  • National digital literacy mission to cover 60 mln houses
  • Need to spread digital literacy in rural areas
  • FY17 allocation for rural electrification 85 bln rupees
  • All villages to be electrified by May 1, 2018
  • 18,542 villages not electrified as of Apr 1, 2015
  • To allot 190 bln rupees FY17 for PM Gram Sadak Yojana
  • To spend 270 bln rupee with states FY17 on rural roads plan
  • To launch new panchayat scheme at 6.5 bln rupees
  • To allot 877.65 bln rupees for rural development schemes
  • To allot 20 bln rupees for LPG connection to rural women

Healthcare

  • To start National Dialysis Service under PPP mode
  • To exempt certain dialysis equipment from basic custom duty
  • Health protection scheme with 100,000 rupee/family cover
  • 3000 drug stores to be opened under PM Aushadhi Yojana
  • To provide 130,000 rupee/yr health cover to senior citizens
  • To launch new health protection scheme

Infrastructure, Industry

  • Propose to circulate model shops and establishments bill
  • To give choice to shops to remain open on 7 days/week
  • 10,000 km of national highways to be added FY17
  • Total outlay for infra 2.21 trln rupees FY17
  • Total outlay for roads, railway 2.18 trln rupees FY17
  • Total investment in road sector 970 bln rupees
  • NHAI to raise 150 bln rupees via bonds FY17
  • Allot 550 bln rupees for roads, highways FY17
  • 85% of 70 stranded road projects back on track FY16
  • To allot 550 bln rupees for roads, highways
  • India's highest ever kilometre of highways awarded in 2015
  • 30 bln rupees/yr to augment nuclear power in 15-20 yrs
  • Mkt freedom for gas from difficult blocks to have price cap
  • Mull calibrated mkt freedom for gas from difficult blocks
  • Need to diversify resources for power generation
  • Drawing up comprehensive plan on nuclear power
  • To incentivise ultra-deep sea gas exploration
  • Achieved highest coal production growth
  • To provide incentives for gas production from tough blocks
  • 10 non-functional air strips to be redeveloped
  • To partner with state govts to develop airports
  • Started series of measures for modernising ports
  • To partner with states to develop regional airports
  • Medium-term goal is to abolish permit raj
  • Plan new public transport policy to up pvt participation
  • FY17 allocation for new port development 8 bln rupees
  • Motor Vehicles Act to be amended to up passenger segment
  • New greenfield ports to be developed on east, west coasts
  • Govt to open up road transport sector
  • Medium-term goal is to abolish permit raj
  • 50,000 km state highways to be converted to national highways
  • FY17 total infrastructure outlay 2.21 trln rupees
  • To have new policy for mgmt of assets of PSUs
  • NITI Aayog to identify PSUs for strategic sale
  • To encourage PSUs to divest individual assets
  • 100% FDI in marketing of food pdts produced in India
  • To have more FDI reforms in asset restructuring companies
  • To change FDI policy for asset reconstructions cos
  • To modify FDI policy for bourses, asset recast cos
  • Duty drawback schemes to be widened, deepened
  • Have deepened, expanded duty drawback scheme
  • More FDI reforms in insurance, stock exchanges, pension
  • To modify FDI policy for insurance, pension sectors
  • FDI policy to address requirements of farmers
  • To allow mobilisation of 313 bln rupee by govt infra bodies
  • Mulling gas production incentive from high temperature area
  • May incentivise gas production from ultra deep water areas
  • Mulling incentives for gas production from deep sea areas
  • New credit rating system for infra to be developed
  • To issue guidelines for renegotiation of PPP contracts
  • Received conflicting suggestions on FRBM roadmap
  • To amend Companies Act for ease of doing business
  • Will amend companies act this Parliament session
  • Registration of cos to be done in one day
  • 300,000 fair price shops to be automated by Mar 2017

Financial Sector, Banking

  • Banking Board bureau to be operational in FY17
  • To strengthen debt recovery tribunal
  • Considering cutting stake in IDBI Bank to below 50%
  • Stand solidly behind PSU banks
  • To find resources if PSU banks need additional capital
  • Allot 250 bln rupees for recapitalisation of PSU bks FY17
  • Not interfering in lending activities of PSU bks
  • To amend SEBI act to provide for more SAT benches
  • To bring legislation FY17 on illicit deposit taking schemes
  • Sponsor in asset recast cos can hold 100% stake
  • Financial Data Management Centre to be established
  • To allow 100% FDI in asset recast cos
  • To make necessary amendments in SARFASI Act
  • Bankruptcy code to help deepen corporate bond mkt
  • SEBI to develop new commodity derivative pdts
  • SEBI to introduce new derivative pdts in commodity mkts
  • To adopt comprehensive approach for invest in central PSUs
  • To introduce comprehensive Bankruptcy Code in Parliament
  • To rename divest dept as Dept of Invest & Public Asset Mgmt
  • To amend RBI Act to implement monetary policy framework
  • Vibrant fincl sector critical for econ growth
  • PM Mudra Yojana target to give 1.8 trln rupees loans FY17
  • To draw road for consolidation of PSU banks
  • Banking board bureau to be operationalized in FY17
  • To draw roadmap for consolidation of PSU banks
  • To take up massive rollout of micro-ATMs across nation
  • Public money should reach poor without leakages
  • Nationwide roll out of ATMs via post offices
  • To list govt-owned general insurance cos on stock exchanges
  • To list general insurance cos on stock exchanges
  • To set up panel to review FRBM Act
  • Time has come to review FRBM Act
  • Propose to set up committee to review FRBM Act
  • Govt open to reducing its stake in PSU banks below 50%
  • Consolidation roadmap for PSU banks next year.