Arun Jaitley announces Union Budget 2016-17

By Ritika Bisht
In Economy
February 29, 2016
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arun-jaitleyFinance Minister Arun Jaitley presented the Union Budget 2016-17 that included some deductions and multiple new cesses. This year’s budget increased the tax deduction limit to Rs 60,000 per annum from the current Rs 24,000 on the housing rent. The Finance Minister also announced an additional tax relief of Rs 50,000 per annum on a loan of Rs 35 lakh in 2016-17 for the first-time home buyers, provided the house cost does not exceed Rs 50 lakh. During his speech, Jaitley outlined nine pillars that would drive India’s economic growth. The final highlights of Budget 2016-17 were as follows:

  • 1,060 crore revenue loss through direct tax proposals, and Rs. 20,670 crore revenue gain through indirect tax proposals. Revenue gain of Rs 19,600 crore in Union Budget 2016 proposals.
  • 13 different cesses levied by various ministries with collections less than Rs.50 crore a year to be done away with.
  • No Service Tax for houses built under 60 square metres.
  • Excise duty on tobacco increased by 10-15 per cent.
  • Committed to stable taxation regime. No more retrospective amendments.
  • 4% high capacity tax for SUVs.
  • Limited period compliance window for domestic taxpayers to declare undisclosed income. Declarations to have immunity from prosecutions.
  • No changes have been made to existing income tax slabs.
  • Infrastructure and agriculture cess to be levied.
  • 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.
  • Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
  • 40% of withdrawal at the time of retirement under National Pension Scheme to be tax exempt.
  • Tax holiday for startups for three of five years of setting up the company
  • Lowering of Corporate IT rate for companies not exceeding Rs. 5 crore turnover to 25% plus surcharge.
  • People with income less than Rs 5 lakh to get deduction of Rs 5,000, up from Rs 2,000 last year. HRA deduction up from Rs. 24,000 to Rs. 60,000 p.a.
  • 100 crore for Deendayal Upadhyay’s birthday celebrations and Guru Gobind Singh 300th birth anniversary.
  • Classification of expenditure as plan and non-plan to be done away with.
  • Govt plans to spend Rs 19.78 lakh crore in 2016-17 — Rs 5.5 lakh crore under plan head, Rs 14.28 lakh crore under non-plan head.
  • Fiscal deficit at 3.5% of GDP in 2016-17.
  • A bill on targeted delivery of financial services using Aadhar to be introduced.
  • Amendment to the Companies Act to ensure speedy registration and boost start-ups.
  • 900 crore for buffer stock of pulses.
  • Dept of Disinvestment renamed as Dept of Investment and Public Asset Management.
  • Direct Benefit Transfer for fertiliser subsidy.
  • EPF at 8.33 per cent for new employees joining the scheme.
  • 25,000 crore for recapitalisation of public sector banks. General insurance companies owned by the govt to be listed in stock exchanges.
  • Amendmends to boost Asset Reconstruction Companies to manage NPAs of public sector banks.
  • RBI Act to be amended to set up monetary policy committee.
  • 100% FDI through FAPB route in marketing of food products produced and manufactured in India.
  • Total outlay on infrastructure in 2016-17 is Rs. 2,21,246 crore
  • In the power sector, the govt is drawing up a plan for 15-20 years to augment investment in nuclear power. Rs. 3,000 crore per annum for this.
  • There are 160 airports and airstrips which can be revived.
  • Motor Vehicles Act to be amended to enable entrepreneurship in the road transport sector.
  • Total outlay for infrastructure is at Rs. 2.31 lakh crore.
  • 97,000 crore for all roads. Total outlay on roads and rails will be Rs. 2.80 lakh crore. 10,000 km of national highways in 2016-17 and 50,000 km state highways to be converted to NH roads.
  • More than 70,000 road projects were languishing at the beginning of the year. Nearly 85% of these projects have been put back on track.
  • Small shops should be given the choice to remain open on all 7 days a week.
  • 1,700 crore for 1500 multi-skill development centres.
  • 10 public and 10 private educational institutions to be made world-class. Digital repository for all school leaving certificates and diplomas. Rs. 1,000 crore for higher education financing.
  • Hub to support SC/ST entrpreneurs.
  • National dialysis service programme under PPP model. LPG connection for women members of rural homes.
  • Government to provide health insurance of upto Rs. 1 lakh per family; top up of Rs. 35,000 for people above 60 years. 3,000 stores to be opened for generic drugs.
  • Total rural sector allocation Rs. 87,769 crore.
  • Two schemes for digital literacy for rural India to cover 6 crore households in the next three years.
  • 9,000 crore for Swachch Bharat Abhiyan.
  • 5,542 villages have been electrified, more than the last three years combined.
  • 38,500 crore for MNREGA.Highest ever for the rural employment scheme.
  • 2.87 lakh crore for gram panchayats as per recommendation of 14th finance commission.
  • Four schemes for animal welfare.
  • Agricultural credit target of Rs.9 lakh crore. Govt to allocate Rs 5,500 crore for crop insurance scheme.
  • Unified e-platform for farmers to be inaugurated on Ambedkar’s birthday.
  • Paramparagat Krishi Vikas Yojana to bring 5 lakh acres under organic farming.
  • 5 lakh hectares to be brought under irrigation.
  • Govt will reorganise agricultural policy to double farmer income in five years.
  • Jaitley announces the nine pillars of his Budget — Agriculture and farmers’ welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.
  • New scheme for BPL families for gas connections. Staturtory backing for Aadhaar platform to ensure delivery of benefits.
  • CAD is 1.4% of GDP.
  • FY 16-17 will have the additional burden of implementing the VII pay commission and the defence OROP.
  • FY 15-16 and 16-17 will be challenging for the government.
  • Forex reserves are at the highest ever levels — $350 billion.
  • GDP growth has accelerated to 7.6%. CPI inflation has come down to 5.4%.