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Union Budget 2015: A panacea for the ailing economy?

Is it a Modi wave that splashed all over the country’s domain? The notch of  Modi’s clout has summoned for a MAJOR CHANGE. Union Budget 2015-16 as presented by Finance Minister Mr. Arun Jaitley in the Parliament on February 28, 2015 is the outset of new era of development vortex. As a large mob has already been made well versed with the facts and figures of the bankbook of the Budget, it is necessary to showcase the back wall to the common people out here that what will they receive out of it. Here are some highlights and key announcements along with a handy note of Budget 2015-16.

Does this budget prove to be lucrative? Has it enough for the common people to rise them to enjoy even a little of cake walk? Let’s have a look.

How does budget empower a housewife?

Say a housewife has saved up little extra that no one else in the family knew about. Which is why this budget offers her lot more opportunities. For starters, her LPG subsidies go directly into her bank account. If that wasn’t enough, decreased cost of living owing to falling inflation gives her a chance to invest in gold monetization plans and increased tax savings with larger health cover, making #sabka budget truely her apna budget.

Opportunities for a skilled worker

He has always had the skills, but not always the opportunity. Bridging the gap this time around are skill India schemes, easily available credit, and a seriously improved employment environment under Make in India that will level the playing field for millions just like him.

Hopeful Farmer

Life will no longer pass him by. With 24×7 power, clear drinking water, a toilet and road connectivity, his basics are looked after. The National Agricultural Market will sideline the middleman and enable him to not just create value but capture value.’ Per Drop More Crop’ will increase his productivity and ensure that he has the confidence to take life head on.

Enthusiastic Entrepreneur

It gives an ecosystem that is investor friendly making it easier to raise capital and to literally make that capital sweat. Acche din has truly arrived for him. From paying lower taxes to the convenience of even paying central excise and service tax online, his headaches are bound to disappear. Special schemes that offer debt equity and receivables financing is only further proof of the pudding.

Ambitious Student

A student has always felt that the education, as a sector, was not a priority for the Government. But that opinion of  him is about to change with this budget. With the PM’s Make in India campaign, it’s a matter of time before India is transformed into a manufacturing and services hub, increasing his chances of landing a job of his choice manifold. Adding to this, there is easy access to loans and scholarships under the Pradhan Mantri Vidhya Lakshmi Karyakramand and it’s easy to see the glint of the bright future that awaits his in his very eyes.

Hardworking Labourer

The current budget has taken special care to consider a functional security system for the underprivileged. Under the Jan Dhan scheme, a labourer will now have a bank account and a RuPay debit card. Under the Jeevan Jyoti Bima Yojana, he has access to accidental death risk cover of Rs. 2 lakhs for as little as Rs. 12 per year. In a bid to provide affordable housing for all, 4 crore houses in rural areas have also been announced. This coupled with easy lending norms for the underprivileged will make his dream of owning a roof over his head a reality, real soon.

Retired Person

She has always believed that retirement doesn’t necessarily mean a compromise in the quality of life. This is exactly why she has a lot to smile about after this budget. Her life has been made easy, as Adhar and Jan Dhan have made sure that her pension and LPG subsidies get debited directly into her acocount. With increased tax deduction limits of health insurance and diseases of serious nature, and more defined pensions under Atal Pension Yojana with increased contribution from the government, she will definitely have that little extra money to indulge in her little whims. Unclaimed deposits of Rs 3,000 crore in PPF and Rs 6000 crore in EPF are there to create senior citizens welfare fund from this corpus.

Manager

For someone who manages his own company, ease of doing business has always been a priority for him. This has come in the form of simplified tax procedures and online payment options for central excise and service tax. Corporate tax will be reduced to 25% from 30%. And with the introduction of gold bonds, he now has something to keep him, as well as his clients, in good cheer.

If we see the Union Budget 2015 in a verbose manner, it has shown up investments in all sectors.

Union budget will be a game changer for startups. The objective of this Budget is to improve quality of life and to pass benefits to common man. Indian Government has 3 major achievements: Jan Dhan Yojana, Coal Auction and Swacch Bharat programme. Incremental change is not going to take us anywhere, will need to think in terms of quantum jump. Under Swacch Bharat Yojana, 50 lakh toilet already built, 6 crore toilet are under target.

Union budget 2014-12015 has brought a ray of hope for the startups community with the Union Finance Minister Arun Jaitley announced the launch of Rs. 10,000 crore funds to increase capital flow to startups and SMES in the country. This announcement has created a wave of expectation among the startup community.

No big ticket projects have been announced instead it has been made clear that the government has a motto to curb inflation.

Retail investors are making a beeline for mutual funds. With the stock market reacting positively to the union budget, this trust is growing. Is it a Modi effect or market reality? Asset management companies of mutual funds have started witnessing inflows into their corpus. Rs. 5,217 crore net inflows seen into equity schemes in February this year alone. Rs. 12.02 lakh crore of the total assets are under management, where equity funds account for Rs. 3.07 lakh crore. The union budget has proposed to change the tax treatment on merger of mutual fund schemes to benefit investors.

The biggest story of this budget is a major change in the way the union government spends its money. With more of its pie going directly to States to spend as they like, the Union Government would begin its allocations to the State plan and wind up some Centrally Sponsored Schemes. The major change is a big increase in States’ share in taxes and duties, and a big decrease in plan assistance to States and UTs.

What does this mean for Central Government spending on major Welfare Ministries and key social sector schemes? The cut has been particularly dramatic for some; the Panchayati Raj Ministry has gone from Rs. 7000 crore in last years’s budget estimates to Rs. 3400 crore in the revised estimates to just Rs. 95 crore in this budget, data compiled by Yamini Aiyar, director of Accountability Initiative,shows.

Where does this leave major official schemes?

Some have been completely wound up; these include the Backward Regions Grant Funds, a scheme for the strengthening of Panchayats, modernization of police forces , the National e- Governance Plan. States have to decide whether they would like to continue with the scheme or not. For an additional 24 schemes, States will shoulder a greater burden as the Union government takes a step back. These include flagship schemes including the Swachh Bharat Abhiyaan, the National Health Mission., the Rashtriya Madhyamik Shiksha Abhiyaan, and the Integrated Child Development Scheme, the National AIDS and STD Control Programme and the Rural Housing Scheme. Thirty-one schemes, including the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS),the Mid Day Meal Scheme will remain fully funded by the Central government.

With the optimum utilization of Rupee, real GDP is expected to accelerate to 7.4% in fiscal year 2015-16 and a double digit boom in subsequent years.

A grand scheme is on launch: National Insurance scheme called PM Suraksha Bhima Yojana, offering coverage of 2 lakh rupees for just premium of Rs.12 per year.

Irrigation and agriculture

Rs. 5300 crore amount has been allocated for micro irrigation. Target of 8.5 lakh crores credit is kept that is to be given to farmers in 2015-16. There is a target of 8.5 lakh crore of credit for agricultural sector.

Roads and railways

And the most interesting Indian Railway Budget will see no investments in bringing new trains for public reach; instead it will enhance and improvise the existing ones with basic facilities at their best. Operation 5 minutes is an innovative step taken to eradicate the railway shortcomings of false ticket booking by paying TT. Increased Budgetary allocation to Roads & Railways will be seen.

Education

Initial sum of Rs 150 Cr to create world class IT hub to take advantage of our competitiveness. Start-ups: mechanism for techno-financial incubation is developed for startups; government has set aside Rs 1000 crore. It proposes to set-up an IT based student financial aid system under PM Vidya Laxmi scheme. The new Pradhan Mantri Vidya Lakshmi Programme will ensure no student misses out on higher education opportunities due to lack of funds. It has also announced AIIMS institutions in J& K, Punjab, Himachal Pradesh and Assam. ISM Dhanbad will be upgraded to full IIT. National Skill Mission will be launched through skill development and entrepreneurship ministry, to develop employability of youth, especially below 25 years of age.

New incorporations

Highest ever allocation for MGNREGA has been made by increasing it this year by 5,000 crore rupees. Ports in public sector will be encouraged to corporatize & become companies under companies act. GST will be put in place State of art internationally indirect tax system by April 1st 2016: FM. Government proposes to increase visa-on-arrival to 150 countries to increase tourism and hence not bereft of development. Government is pursuing policy of #MakeInIndia in defense not only to cater our needs but also for export.

Taxes and your expenditures

Budget Estimates of Expenditure: Rs. 17 .77 lakh crore of which Non Planned is Rs. 13.12 lakh crore and Plan is 4.65 lakh crores. Direct Tax collection is going to be 14.49 lakh crore rupees. Basic rate of Corporate Tax to be reduced from 30% to 25% in next 4 years and will be accompanied by reducing exemptions. Exemptions to individual tax payers will remain. Government will enact a comprehensive law on black money stashed abroad. Reduced Royalty fees on Technical Services to 10% from 25%. Wealth Tax is abolished, instead super rich will pay extra 2% extra surcharge for people with income over 1 crore. This will lead to additional 9,000 crore to Tax kitty. Custom duty on raw materials and intermediaries is to be reduced. Fuel excise duty will remain unchanged; changes in tobacco excise duty have been incorporated. Consolidated Service Tax has been increased from 12.36% to 14%! Increased in deduction for Health insurance from Rs. 15000 to Rs. 25000 and for senior citizens it is increased to 30,000. Tax exemption for transport allowance increased from Rs 800 to Rs 1600 per month. Individual tax payer will benefit to the extent Rs.4,44,200/- from the exemptions announced. Direct tax proposals will lead to 8315 crore loss and an increase of Rs. 23,000 crore in indirect tax gains.

Since the country is facing crisis at financial front, this momentous budget has have put forward the development agenda- Make in India, ease of doing business, infrastructure development, taxation release and lot more; hence road mapping a pragmatic pathway for the common mob easy lifestyle. So it’s a healing touch for our ailing economy.

About the Author

Rashi Gupta is currently pursuing her second year in Electronics and Communication engineering from Jaypee Institute of Information Technology, Noida. Her areas of interest extend to Administration and Politics. She is looking forward to a career in the same, in future. She wants to be a change for the society as she loves interacting with new people and stand apart due to her out of the box vision. She likes to read, play badminton, travel, and explore new activities. Currently, she is interning with the Model Governance Foundation.

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