Glimpses of Financial Budget, 2015

The recent 2015 Financial Budget of 2015, announced by the recently appointed Finance Minister, Mr Arun Jaitley, was welcomed by applause all around India.  The budget is known for its innovativeness and is growth focused. It also lays emphasis on boosting investments in India, cutting the red tape and on the poorest of the poor people in India.  With the contribution of the biggest monetary fund for the MNERGA, Mr. Arun Jaitley has used this budget to mainly accomplish two political objectives, one being that the NDA government do focuses on the poor and is not indifferent to the section, by introducing various schemes like housing for all, a -rupee a- month accident insurance cover aimed at unorganized labour, and extension of financial inclusion by making post offices payment banks. Secondly, the government now focuses on strictly dealing and with a harsher penalty on those with unaccounted wealth. He acknowledged the success of the Jan Dhan Yojana, by which over in the period of 100 days, 12.5 crore families have been brought into the financial mainstream, secondly of coal allocation, where the coal bearing States will be getting a few lakh of crore rupees which they can use for formation of hotly anticipated group resources and for welfare of their people.   The PM’s creation of Swacch Bharat Abhiyan,  forms the third successful venture for Modi sarkar as they successfully build 50 lakhs toilets in the year 2014-15 and still aim to achieve the target for 6 crore toilets.

Here are a few highlights of the Union Budget:

1. FISCAL DEFICIT

• It is kept in mind the need for fiscal discipline despite the need for investments.
• Current account deficit is below 1.3 percent of GDP
• The fiscal deficit target of 3% of GDP has been deferred by a year.

2. AGRICULTURE

• The budget promises of a unified national agriculture market
• Additional support to organic farming
• Irrigation through creation of rural infrastructure, efficient water usage
• Rs 300 crore allocation for the project, of which 25 crore will go to the northeast, which in turn will be turned into country’s organic hub.
• Allocation of the amount of Rs 34,699 crores for MNERGA.

3. REVENUE

• Revenue deficit was seen at 2.8 % of GDP
• Non tax revenue at Rs. 2.21 trillion
• Under market stabilisation, net recipients are estimated at Rs. 200 billion.

4. DISINVESTMENT

• Government targets 410 billion rupees ($6.7 billion) from stake sales in companies in 2015/16
• Total stake sale in 2015/16 seen at 695 billion rupees
• The government sets stake sale target for 2016/17 at 550 billion rupees
• Revises down stake sale target for 2014/15 to 313.5 billion rupees

5. MARKET REFORMS

• To merge commodities regulator with SEBI
• Setting up of debt management agency
• Setting up of an autonomous bank board bureau to look up management of public sector banks.
• Proposal of introduction of public contract resolution of disputes bill.

6. POLICY REFORMS

• A new law on black money
• Visa on arrival facility to 150 countries from 43
• Introduction of a national skills mission shortly to add to employability of rural youth.
• Rs 346.99 billion has been raised for rural employment scheme

7. TAXATION

• Removal of wealth tax
• Corporate tax of 30% is uncompetitive
• To implement goods and services tax by 2016 April
• To reduce custom duty on 22 items
• Basic custom duty on commercial vehicle doubled to 20 percent
• Proposes to increase service tax rate and education cess to 14 percent from 12.36 percent
• Plans to introduce direct tax regime that is internationally competitive on rates without exemptions
• Exemptions for individual tax payers to continue
• To enact tough penalties for tax evasion in new bill
• Tax dept to clarify indirect transfer of assets and dividend paid by foreign firms
• GAAR implementation deferred by 2 years to April 2017

8. PERSONAL INCOME TAX

• No new changes on income tax brackets
• Limit of deduction of health insurance premium increased to 25,000 rupees from 15,000 rupees; limit increased to 30,000 rupees from 20,000 rupees for the elderly
• People aged above 80 and not covered by health insurance to be allowed deduction of 30,000 rupees for medical expenses
• Monthly transport allowance indemnity doubled to 1,600 rupees
• Additional deduction of 50,000 rupees for contribution to new pension scheme under section 80CCD

9. IMPORT TAX

• Tax on iron and steel increased from 10% to 15%.
• Tax on metallurigical coke increased from 2.5% to 5%.

10. INVESTMENTS

• 79.4 billion capital infusions to be given to state run banks.
• Foreign investments encouraged in alternative investments funds.
• Introduction of composite caps

11. GOLD

• Over 20,000 tonnes of gold lying untreated can be made available to jewellery manufacturers through banks in form of metal loans.
• Depositors of gold will earn interest on their metal account.
• Import duty stays at 10%.

12. EDUCATION

• New IITs to be put up, including one in Karnataka
• 5 new IIMs to be build up
• Scheme “Nai Manzil” to be launched for minority youth to find up better jobs
• Propose to set up IT based Student Financial Aid Authority for loans and scholarships.

13. CLEAN GANGA PROJECT

• Rs 4,173 crores allocated to the water resource ministry.
• 100% deduction for contributions, other than by CSR.
• Set up of Clean Ganga Fund,this will receive voluntary contributions form residents, NRI’s, and PIO’s.

14. GREENER INDIA

• Setting up of Scheme for Faster Adoption and manufacturing of Electric Vehicles (FAME).
• I am proposing an initial outlay of `75 crore for this Scheme in 2015-16. The Ministry of New Renewable Energy has revised its target of renewable energy capacity to 1,75,000 MW till 2022, comprising 100,000 MW Solar, 60,000 MW Wind, 10,000 MW Biomass and 5000 MW Small Hydro.

15. ON BLACK MONEY

• Concealment of income and tax invasion is an offence which is non compoundable
• Penalty for such concealment of income and assets at the rate of 300% of tax shall be levied.
• Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.

About the Author

Rushali Srivastava is a student of Institute of Law, Nirma University, Ahmedabad, pursuing B.B.A. LL.B. (Hons).  She likes reading and writing about social issues prevalent around the world. She enjoys researching and would like to pursue a career in Corporate Law. Besides these, she is an active participant in various singing programmes and competitions, and has also published articles in various journals. Currently, she is interning with the Model Governance Foundation.