Highlights of Union Budget 2016-17

Union Finance Minister Arun Jaitley presented Union Budget 2016-17 in the Parliament.
It was the second full year Budget of the NDA government under leadership of Prime Minister of Narendra Modi and the third budget of Arun Jaitley as Finance Minister.
Union Finance minister has announced 9 pillars of the budget. They are rural sector, social sector including healthcare, education, skills and job creation, Agriculture and farmers’ welfare, Infrastructure, ease of doing business, financial sector reforms, fiscal discipline, tax reforms to reduce compliance burden.
Key Highlights

• Higher allocation for agriculture, infrastructure and social sectors.
• Fiscal deficit pegged at 3.5%, Revenue deficit was at 2.5% during 2015-16.

Taxation

• 1 per cent service charge on purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.
• Companies with revenue less than 5 crore rupees will be taxed at 29% plus surcharge.
• 0.5 per cent Krishi Kalyan Cess to be levied on all services. Infrastructure cess to be levied.
• 1% excise imposed on articles of jewellery, excluding silver.
• 1% Pollution cess of on small petrol, CNG and LPG cars; 2.5% on diesel cars of certain specifications and on higher-end models 4% cess.

Personal Finance

• No changes have been made to existing income tax slabs
• 1,000 crore rupees will be allocated for Employees’ Provident Fund (EPF) scheme.
• Government will pay 8.33% EPF contribution for all new employees for first three years
• Exemption of 50,000 rupees for housing loans up to 35 lakh rupees, provided cost of house is not above 50 lakh rupees.
• 15% surcharge on income above Rs. 1 crore.

Social

• Allocation of Rs. 38,500 crore for MGNREGA for 2016-17
• Allocation of Rs.9,500 crores for Swacch Bharat Abhiyan.
• LPG connections will be provided under the name of women members of family. Rs 2000 crore will be allocated for 5 years for BPL families.
• Government to launch new initiative to provide cooking gas to BPL families with state support.
• Grants of 2.87 lakh crore rupees to gram panchayats and municipalitie.
• Under Shyama Prasad Mukherji Rurban Mission 300 urban clusters to be set up.
• Four schemes for animal welfare.

Health

• New health protection scheme will be launched for health cover upto 1 lakh per family.
• Additional healthcare cover of Rs 30,000 will be provided to senior citizens under it.
• National Dialysis Service Programme will be launched at all district hospitals with funds through PPP mode.
• PM Jan Aushadhi Yojana will be strengthened and 300 generic drug store to be opened

Education

• For promoting entrepreneurship among SC/ST, Rs.500 crore will be allocated to Scheme
• 10 public and 10 private educational institutions will be made world-class.
• Digital repository mandatory for all school leaving certificates and diplomas.
• For higher education financing, allocation of Rs. 1,000 crore.
• Allocation of 1,700 crore rupees for 1500 multi-skill development centres.
• 62 navodaya vidyalayas to be established to provide quality education.
• Digital literacy scheme will be launched to cover 6 crore additional rural households.
• Entrepreneurship training will be provided at schools, colleges and massive online courses.
• Provide skill training to 1 crore youth under the PM Kaushal Vikas Yojna in the next 3 years.
• 1500 Multi-skill training institutes will be set up.

Energy

• Allocation of 3000 crore for nuclear power generation
• Government to chalk out comprehensive plan for exploiting nuclear energy.
• Government to provide incentive for deepwater gas exploration and market freedom for it.
• Pre-determined ceiling price will be on landed price of alternate fuels.

Investments and infrastructure

• 65 eligible habitats will be connected via 2.23 lakh kms of road. Current construction pace is 100 kms/day.
• Allocation of Rs. 27,000 crore on roadways and Rs. 55,000 crore for roads and highways.
• Total allocation of Rs 97,000 crore for road construction under PMGSY.
• Shops to be given option to remain open 24*7 across markets.
• On east and west coasts, new greenfield ports will be developed.
• Underserved airports will be revived. For regional connectivity centre to partner with States to revive small airports.
• 100 per cent FDI in food processing and marketing of food products produced and marketed in India.
• Department of Disinvestment to be renamed as Department of Investment and Public Asset Management.
• Government to amend Motor Vehicle Act in passenger vehicle segment to allow innovation.
• 100 per cent tax exemption for startups for 3 years.

Agriculture

• Total allocation of Rs 35984 crore for agriculture and farmer welfare.
• 5 lakh hectares of land will be brought under irrigation 28.5 lakh acres will be brought under organic farming over a three year period.
• Allocation of 60,000 crore rupees for recharging of ground water to focus on drought hit areas cluster development for water conservation.
• 20,000 crore rupees Dedicated Irrigation Fund in NABARD.
• Under the PM Fasal Bima Yojna, nominal premium and highest ever compensation in case of crop loss.

Banking

• Allocation of Rs 25,000 crore towards recapitalisation of public sector banks.
• Banking Board Bureau will be operationalised.
• Govt to increase ATMs, micro-ATMs in post offices in rural areas in next three years
• General Insurance companies will be listed in the stock exchange
• Under MUDRA, target of disbursement increased to 1,80,000 crore.

Month: Current Affairs - February, 2016