The Union Budget 2016-17 was announced today, with a pronounced focus on agriculture and farming, rural areas, infrastructure sector, targeted subsidy delivery and skill development. Here is the full video of the budget speech in Lok Sabha –
Budget highlights for the fiscal year that begins 1 April are as below:
Focus on agriculture and farmers’ welfare
- Farmers’ income to be doubled by 2022.
- Rs. 9 lakh crore will be given as Agricultural credit in 2016-17.
- 28.5 lakh hectares will be brought under irrigation under Pradhan Mantri Krishi Sinchai Yojana. 89 irrigation projects, requiring Rs. 86,500 crore in next five years, to be fast tracked. 23 of these projects to be completed before 31st March, 2017.
- Dedicated Long Term Irrigation Fund will be created in NABARD with initial corpus of Rs. 20,000 crore.
- Major programme for Sustainable Ground Water management proposed for multilateral funding at a cost of Rs. 6,000 crore.
- 5 lakh farm ponds and dug wells in rain-fed areas and 10 lakh compost pits for production of organic manure will be taken up under MNREGA.
- Soil Health Cards will be given to all 14 crore farm holdings by March, 2017.
- 2,000 model retail outlets of fertilizer companies with soil and seed testing facilities, will be opened in the next three years.
- Unified Agricultural Marketing e-Platform to be dedicated to the Nation on the Birthday of Dr. Ambedkar on 14th April, 2016.
- FCI will undertake online procurement of food grains. This will bring transparency and convenience to farmers through prior registration and monitoring of procurement.
- Pashudhan Sanjeevani, an animal wellness programme, will be undertaken. Nakul Swasthya Patras to be issued.
- Rs 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municpalities as per the recommendations of the 14th FC. This translates to – Rs. 81 lakh per gram panchayat and over Rs. 21 crore per Municipality.
- Every Block in drought and rural distress areas will be taken up under Deen Dayal Antoyodaya Mission.
- 300 Rurban Clusters will incubate growth Centres in Rural Area.
- All villages will be electrified by 1st May, 2018.
- A new Digital Literacy Mission scheme will be launched for rural India to cover around 6 crore households in the next three years.
- Modernisation of Land Records through revamped National Land Records Programme.
- Rashtriya Gram Swaraj Programme to be launched.
Targeted Delivery of Government subsidies and benefits to ensure that they reach the poor and the deserving.
- New law for targeted delivery of financial and other subsidies etc. using Aadhar framework will be enacted.
- DBT in fertilizer will be launched on pilot basis.
- Of the total 5.35 lakh fair price shops in the country, 3 lakh shops to be automated by March,2017.
- MUDRA – Loan target of 1,80,000 crore in 2016-17.
- Massive Mission to provide LPG connection to poor households will be launched. 1.5 crore poor households will benefit in 2016-17. Scheme will continue for two more years to cover a total of 5 crore BPL households. LPG connection to be given in the name of woman member of the family.
- New Health Protection scheme will be launched. Health cover up to Rs. 1 lakh per family and additional Rs. 30,000 for senior citizens to be provided.
- 3000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened in 2016- 17.
- National Dialysis Services Programme will be launched. Tax exemptions given to certain parts of dialysis equipments.
- A new Eco System for SC/ST entrepreneurs will be set up. SC/ST Hub to be set up in MSME Ministry.
- Rs. 2,18,000 crore will be spent on capital expenditure of roads and railways in 2016-17. This includes:
- Rs. 27,000 crore PMGSY
- 55,000 crore Road Transport and highway
- 15,000 crore NHAI Bonds
- 1,21,000 crore Railways—Plans to set up national investment infrastructure fund
- Unserved and underserved airstrips to be revived by AAI and also in partnership with State Governments.
- Road transport sector (passenger segment) to be opened up by removing permit system. This will benefit the poor and middle class, encourage new investment, promote start up entrepreneurs and create new jobs. This is a major reform measure.
- To promote private participation in infrastructure projects, Public Utility (Resolution of Disputes) Bill will be introduced; and guidelines for renegotiation of PPP agreements will be issued, without compromising transparency.
- Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects.
- Proposes five ultra mega power projects for 4,000 MW each.
- Second unit of Kudankulam nuclear power station to be commissioned.
- Ports in public sector will be encouraged to corporatise under Companies Act.
- 1500 Multi Skill Training Institutes will be set up under Pradhan Mantri Kaushal Vikas Yojana.
- National Board for Skill Development Certification will be set up in partnership with industry and academia.
- Entrepreneurship education and training will be provided in 2200 colleges, 300 schools, 500 Govt. ITIs and 50 vocational training centres through massive open online courses.
- To launch a national skills mission soon to enhance employability of rural youth
- 62 new Navodaya Vidyalayas to be opened in remaining uncovered districts in next two years.
- An enabling regulatory architecture will be provided to 10 public and 10 private institutions to emerge as world class teaching and research institutions.
- Higher Education Financing Agency will be set up with an initial capital base of Rs. 1,000 crore.
- Digital Depository will be set up for educational certificates, mark-sheets, awards etc.
Personal income tax
- No revision of income tax brackets
- Limit of deduction of health insurance premium increased to Rs 25,000 from Rs 15,000; limit increased to Rs 30,000 from Rs 20,000 for the elderly
- People aged above 80 and not covered by health insurance to be allowed deduction of Rs 30,000 for medical expenses
- Additional deduction of Rs 25,000 for the disabled
- Limit on deduction for contributions to pension fund and new pension scheme increased to Rs 150,000 from Rs 100,000 rupees
- Additional deduction of Rs 50,000 for contribution to new pension scheme under section 80CCD
- Monthly transport allowance exemption doubled to Rs 1,600
- GDP growth seen at between 8% and 8.5% year-on-year
- Fiscal deficit seen at 3.9% of GDP in 2015-16
- Will meet the challenging fiscal target of 4.1 percent of GDP
- Current account deficit (CAD) below 1.3% of GDP
- Expects consumer inflation to remain close to 5% by March, opening room for more monetary policy easing
- Revenue deficit seen at 2.8% of GDP
- Non-tax revenue seen at 2.21 trillion rupees
- Government targets disinvestment (stake sale) target for 2016-17 at Rs. 55,000 crore
- Food subsidy seen at Rs 1.24 trillion.
- Fertilizer subsidy seen at Rs 72,969 crore.
- Fuel subsidy seen at Rs 30,000 crore.
- Major subsidies estimated at Rs 2.27 trillion.
- Propose to merge commodities regulator Forward Markets Commission (FMC) with Securities and Exchange Board of India (Sebi)
- To bring a new bankruptcy code
- Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee
- To set up public debt management agency
- Proposes to introduce a public contract resolution of disputes bill
- To establish an autonomous bank board bureau to improve management of public sector banks
- To enact a comprehensive new law on black money
- Propose to create a universal social security system for all Indians
- To raise visa-on-arrival facility to 150 countries from 43
- Allocates Rs 34,699 crore for rural employment guarantee scheme
- Raises threshold for application of transfer pricing rules to Rs 20 crore from current Rs 5 crore
- To abolish wealth tax
- Replaces wealth tax with additional 2% surcharge on super-rich
- Proposes to cut corporate tax to 25% over next four years
- Net gain from tax proposals seen at Rs 15,068 crore
- Proposes modification of permanent establishment norms so that the mere presence of a fund manager in Bharat would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.
- Proposes to rationalise capital gains tax regime for real-estate investment trusts (REITs)
- Extends withholding tax concession on foreign debt purchases by two years
- Expects to implement goods and services tax by April 2016
- To reduce custom duty on 22 items
- Basic custom duty on commercial vehicle doubled to 20%
- Proposes to increase service tax rate and education cess to 14% from 12.36%
- 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 department to clarify indirect transfer of assets and dividend paid by foreign firms
- Plan expenditure estimated at about Rs 4.65 trillion
- Non-plan expenditure seen at about Rs 13.12 trillion rupees
- Allocates Rs 2.46 trillion for defence spending
- Allocates Rs 33,150 billion rupees for health sector
- If revenue improves, hope to raise budgeted allocations for rural job scheme by Rs 5,000 crore
Finance minister’s comments
- “We inherited a sentiment of doom and gloom. The investment community had almost written us off. We have come a long way since then.”
- “We have turned around the economy, dramatically restoring macroeconomic stability and creating the conditions for sustainable poverty elimination, job creation, durable double digit economic growth.”
- “While being mindful of the challenges…this gives us reason to feel optimistic.”\
- “Domestic and international investors are seeing us with renewed interest and hope.”
- ”We are committed to subsidy rationalisation based on cutting leakages”