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Union Budget for 2016-17 – live updates

Monday, February 29, 2016
New Delhi

Union Finance Minister Arun Jaitley presented the third General Budget in Parliament today at 11 am.

Economic survey predicts inflation seen at around 4.5 to 5 per cent in the current financial year and expect Reserve Bank of India to meet 5 per cent inflation target by March 2017. 2016/17 current account deficit seen around 1-1.5% of GDP. Rupee's value must be fair, avoiding strengthening; fair value can be achieved through monetary relaxation. India needs to prepare itself for a major currency readjustment in Asia in wake of a similar adjustment in China. Gradual depreciation in rupee can be allowed if capital inflows are weak. Proposes widening tax net from 5.5% of earning individuals to more than 20% .Tax revenue expected to be higher than budgeted levels in FY15/16. Easiest way to widen the tax base would be not to raise exemption thresholds. Favours review and phasing out of tax exemptions

  • Finance Minister said that the Financial Year 15-16 and 16-17 will be challenging for the government. Forex reserves are at the highest ever levels — $350 billion. The GDP growth has accelerated to 7.6%. CPI inflation has come down to 5.4%. Jaitley says the Indian economy has held strong despite a global slowdown.
  • Government will reorganize 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. Statutory backing for Aadhaar platform to ensure delivery of benefits. The CAD is 1.4% of GDP. Paramparagat Krishi Vikas Yojana to bring 5 lakh acres under organic farming. 28.5 lakh hectares to be brought under irrigation. Paramparagat Krishi Vikas Yojana to bring 5 lakh acres under organic farming.
  • Government to allocate Rs.17,000 crore for irrigation schemes during 2017.Unified e-platform for farmers to be inaugurated on Ambedkar's birthday.
  • Rs. 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
  • 5,542 villages have been electrified, more than the last three years combined.
  • Rs. 38,500 crore for MNREGA. Highest ever for the rural employment scheme.
  • Rs. 9,000 crore for Swachch Bharat Abhiyan.
  • Rs.38,500 crores have been allocated to MNREGA
  • To cover Rs. 1,30,000 per year health cover to senior citizens. .
  • Government to provide health insurance of upto Rs. 1 lakh per family. 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
  • 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. 3,000 stores to be opened for generic drugs.
  • Total rural sector allocation Rs. 87,769 crore.
  • Rs. 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.
  • Small shops should be given the choice to remain open on all 7 days a week.
  • Rs. 97,000 crore for all roads. Total outlay on roads and rails will be Rs. 2.80 lakh crore.
  • 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.
  • 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.
  • Rs. 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.
  • There are 160 airports and airstrips which can be revived.
  • 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.
  • Outlay of Rs.2,18,000 crore for railways and roads in 2017
  • RBI Act to be amended to st up monetary policy committee.
  • 100% FDI through FAPB route in marketing of food products produced and manufactured in India.
  • 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.
  • Ceiling under 87A to be increased to Rs. 3,000. HRA deduction up from Rs. 24,000 to Rs. 60,000 p.a.
  • Rs. 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.
  • 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.
  • Rs. 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.
  • Rs. 25,000 crore for recapitalisation of public sector banks. General insurance companies owned by the govt to be listed in stock exchanges.
  • 40% of withdrawal at the time of retirement under National Pension Scheme to be tax exempt.
  • 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.
  • Rs. 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.


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