Upbeat mood in the Indian Economy
India is at a higher growth trajectory with expected GDP growth at 8% upwards for 2015-16. Inflation is under control, foreign exchange reserves are at record high and Rupee has stabilized against a basket of currencies world wide.
- The architecture of Centre-State relations has been re-written by NDA Government. States have been made co-partners in the task of national development
- The devolution of the states is at 42% of the divisible pool & central revenues will be shared to the extent of 47%
- A share of 62% of total tax revenues of the country is shared by the states while centre has the remaining 38%
- Despite inadequate fiscal space available due to slowing down of private investment, the public investment in infrastructure has been increased to Rs 70000 Crores
- The spending model will include gross budgetary support, National infrastructure Investment Trust mobilized through private & international funding & tax free bonds
- Expenditure on Railways, highways, power sector, ports & irrigation has been substantially increased
- Most Poverty alleviation schemes are funded by the Centre and investment in all social sectors has been maintained or increased
- A comprehensive Social Security scheme for the under-privileged will be initiated as an extension of Jan Dhan Yojna
- Launch of PM Suraksha Bima Yojna offering coverage of Rs 2 Lakh for a premium of just Rs 12
- A natural death insurance will be available to all at for a sum of Rs 2 Lakh on a nominal payment of Rs 330/Year
- Atal Pension plan will be launched; aimed at Indians above 60 years to provide defined pension according to contribution, 50% contribution to be from the Govt
Legal Changes to enhance ‘Ease of Doing Business'
- Important policy changes to be brought in bankruptcy law
- Transparent public procurement guided by non-discretionary public procurement legislation
- A special legislation to replace delays in projects due to multiple prior permissions by a regulatory mechanism
- Expeditious settlement of commercial/contractual disputes in project through a dispute resolution law by removing legal delays
Fund the Unfunded
- Special funds created to fund the unfunded i.e. the average 5 crore of self employed mini & small labour, traders, retailers etc
- MNREGA : Additional allocation of Rs 5000 crore if revenue resouces materialize, making it the highest ever allocation
- National institutions allocated to large number of states & educational loans to the students
- Expenditure target for farm credit increased to Rs 8.5 Lakh Crore
- GST Act will be implemented w.e.f April 1, 2016 once passed by parliament
- Duties have been reduced on various items & inverted duty structures corrected to boost manufacturing sector
- The corporate tax rates would be made competitive to Asian economies & many exemptions would be slowly phased out (Corporate tax will be brought down to 25% from 30% in the next four years)
- Further simplification of taxation regime by abolishing Wealth tax & instead levying 2% surcharge on the super rich with above 1 crore Rs annual income. With no extra cost, it would earn Rs 9000 Crores against a sacrifice of Rs 1008 Crores (that Wealth taxes would have entailed)
- More exemptions to middle & small tax payers by giving tax incentive upto Rs 50000/year for investments in NPS (National Pension Scheme), deduction with regard to health insurance increased to Rs 25000 to normal & Rs 30000 to senior citizens, deduction allowed on transport exemption to Rs 1600 from Rs 800 per month
- The net effect: Individual tax payers to get exemptions up to Rs 4,45,000
Tackling Black Money
- To enact a comprehensive law on black money stashed abroad with a punishment upto 10 years of rigorous imprisonment in current session of Parliament
- New structure including efiling, tracking down, Benami property transaction bill to tackle black money in real estate sector soon
- The Budget overall lays emphasis on infrastructure, incentivizes investment, puts more money in the pocket of salaries class, checks inflation & provides social security to the less-privileged
Some Quotable Quotes from the Speech
- "कुछ तो फूल खिलाए हमने और कुछ खिलाने हैं, मुश्किल ये है बाग में अब तक कांटे कई पुराने हैं"
- We inherited a sentiment of Doom and gloom and have come a long way by our actions
- "Just as we are banking the ‘unbanked', we are also funding the ‘unfunded'". Focus is firmly on the social sector too!
- Subsidy is required for the poor and less well-off. We are committed to the process of rationalizing subsidies by cutting down the leakage & not subsidy itself
- Our commitment is to well being of all "Sarve Bhavantu Sukhinah, Sarve Santu Niramayah"