Union Budget 2016-17….Highlights

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Union Budget 2016-17….Highlights
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Finance Minister Arun Jaitley unveiled a budget for the poor on Monday(29 February 2016), announcing new rural aid schemes and skimping on a bank bailout, in a strategy shift that seeks to boost his ruling party in coming state elections.

Jaitley reiterated a forecast that India would grow by 7.6% in the fiscal year that is drawing to a close. He said the government wanted to spread the benefits of growth more widely among India’s 1.3 billion people, but that he would stick to the government’s existing fiscal deficit target for the coming year.

Here are the highlights of Jaitley’s budget for the fiscal year that begins on April 1.
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INTRODUCTION
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1. Growth of Economy accelerated to 7.6% in 2015-16.

2. India hailed as a ‘bright spot’ amidst a slowing global economy by IMF.  Robust growth achieved despite very unfavourable global conditions and two consecutive years shortfall in monsoon by 13%

3. Foreign exchange reserves touched highest ever level of about 350 billion US dollars.  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.

CHALLENGES IN 2016-17
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1. Risks of further global slowdown and turbulence.

2. Additional fiscal burden due to 7th Central Pay Commission recommendations and OROP.

ROADMAP & PRIORITIES
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1. ‘Transform India’ to have a significant impact on economy and lives of people.

2. Government to focus on –

a)ensuring macro-economic stability and prudent fiscal management.
b) boosting on domestic demand
c) continuing with the pace of economic reforms and policy initiatives to change the lives of our people for the better.

3. Focus on enhancing expenditure in priority areas of – farm and rural sector, social sector, infrastructure sector employment generation and recapitalisation of the banks.

4. Focus on Vulnerable sections through:

a) Pradhan Mantri Fasal Bima Yojana
b) New health insurance scheme to protect against hospitalisation expenditure
c) facility of cooking gas connection for BPL families

5. Continue with the ongoing reform programme and ensure passage of the Goods and Service Tax bill and Insolvency and Bankruptcy law

6. Undertake important reforms by:

a) giving a statutory backing to AADHAR platform to ensure benefits reach the deserving.
b) freeing the transport sector from constraints and restrictions
c) incentivising gas discovery and exploration by providing calibrated marketing freedom
d) enactment of a comprehensive law to deal with resolution of financial firms
e) provide legal framework for dispute resolution and re-negotiations in PPP projects and public utility contracts
f) undertake important banking sector reforms and public listing of general insurance companies undertake significant changes in FDI policy.

AGRICULTURE AND FARMERS’ WELFARE
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1. Allocation for Agriculture and Farmers’ welfare is Rs 35,984 crore

2. ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.

3. Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked

4. A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about ` 20,000 crore

5. Programme for sustainable management of ground water resources with an estimated cost of ` 6,000 crore will be implemented through 3 multilateral funding

6. 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up under MGNREGA

7. Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.

8. 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years

9. Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and ‘Organic Value Chain Development in North East Region’.

10. Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets

11. Allocation under Pradhan Mantri Gram Sadak Yojana increased to `
19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.

12. To reduce the burden of loan repayment on farmers, a provision of ` 15,000 crore has been made in the BE 2016-17 towards interest subvention

13. Allocation under Prime Minister Fasal Bima Yojana Rs 5,500 crore.

14. Rs 850 crore for four dairying projects – ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds

FISCAL DEFICIT
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1. Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.

2. Revenue Deficit target from 2.8% to 2.5% in RE 2015-16

3. Total expenditure projected at ` 19.78 lakh crore

4. Plan expenditure pegged at ` 5.50 lakh crore under Plan, increase of 15.3%

5. Non-Plan expenditure kept at ` 14.28 lakh crores.

6. Special emphasis to sectors such as agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure.

7. Mobilisation of additional finances to the extent of ` 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.

8. Plan / Non-Plan classification to be done away with from 2017-18. Every new scheme sanctioned will have a sunset date and outcome review.

9. Rationalised and restructured more than 1500 Central Plan Schemes into about 300 Central Sector and 30 Centrally Sponsored Schemes.

10. Committee to review the implementation of the FRBM Act.

SOCIAL SECTOR INCLUDING HEALTH CARE
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1. Allocation for social sector including education and health care – Rs 1,51,581 crore.

2. Rs` 2,000 crore allocated for initial cost of providing LPG connections to BPL families.

3. New health protection scheme will provide health cover up to Rs One lakh per family. For senior citizens an additional top-up package up to Rs 30,000 will be provided.

4. 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.

5. ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode

6. “Stand Up India Scheme” to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs.

7. National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry associations

8. Allocation of ` 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru 5 Gobind Singh.

EDUCATION, SKILLS AND JOB CREATION
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1. 62 new Navodaya Vidyalayas will be opened

2. Sarva Shiksha Abhiyan to increasing focus on quality of education

3. Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions

4. Higher Education Financing Agency to be set-up with initial capital base of Rs 1000 Crores

5. Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be set-up.

RURAL ECONOMY
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1. Allocation for rural sector – Rs 87,765 crore.

2. 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission

3. Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission

4. A sum of Rs 38,500 crore allocated for MGNREGS.

5. 300 Rurban Clusters will be developed under the Shyama Prasad4 Mukherjee Rurban Mission

6. 100% village electrification by 1st May, 2018.

7. District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes.

8. Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation.

9. A new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years.

10. National Land Record Modernisation Programme has been revamped.

11. New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of 655 crore.

BANKING REFORMS
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* Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required

TAXATION
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1. Committed to providing a stable and predictable taxation regime and reduce black money.

2. Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarants will have immunity from prosecution.

3. Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.

4. New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to `Rs10 lakh. Cases with disputed tax exceeding `Rs 10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also 14 be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition.

5. High Level Committee chaired by Revenue Secretary to oversee fresh cases where assessing officer applies the retrospective amendment.

6. One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.

7. Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts.

8. Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.

9. Time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.

10. Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).

11. Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs 15 lakhs to Rs 50 lakhs.

12. 11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

SKILL DEVELOPMENT
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1. Allocation for skill development – Rs 1804. crore

2. 1500 Multi Skill Training Institutes to be set-up

3. National Board for Skill Development Certification to be setup in partnership with the industry and academia

4. Entrepreneurship Education and Training through Massive Open Online Courses


Source: xaam.in

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