Budget 2014

Budget 2014

 New Delhi: Bringing cheer to individual taxpayers, Finance Minister Arun Jaitley in his maiden Union Budget 2014-15 in Parliament on Thursday, raised personal tax exemption limit to Rs 2.5 lakh from the current Rs 2 lakh.

 Income tax exemption limit for senior citizens has been raised to Rs 3 lakh.

 The Investment limit under Section 80C has also been hiked to Rs 1.5 lakh from the current Rs 1 lakh, while the FM increased housing loan interest rate deduction limit to Rs 2 Lakh.
 In further relief to the depositors, the FM announced that the PPF (Public Provident Fund) deposit ceiling will be raised to Rs 1.5 lakh from the existing Rs 1 lakh.
 The FM also announced to raise FDI in Defence and Insurance sectors to 49 percent and said that the subsidy regime, particularly food and fuel, will be overhauled.
 Assuring investors that retrospective amendments to tax laws will be undertaken with extreme caution, Jaitley said all fresh cases arising out of the 2012 amendment of I-T Act will be looked into by a high-level CBDT committee.
 However, the existing tax disputes, arising out of Retrospective Amendment to the Income tax Act, 1961, and are pending in courts, will be allowed to reach their logical conclusions, he said.
 Stating that his predecessors have left a very daunting target of meeting the fiscal deficit, Jaitley said that the BJP government will take this as a challenge and meet the fiscal deficit target of 4.1 percent of GDP.
 Jaitley told Parliament that India`s 1.2 billion people were “exasperated” after two years of economic growth of below 5 percent.
 He vowed that Asia`s third largest economy would expand at a rate of 7-8 percent within three to four years.

Here are the key highlights of Union Budget 2014-15:

 Personal tax exemption limit raised to Rs 2.5 lakh from current Rs 2 lakh for taxpayers below 60 years
 Senior citizens’ tax exemption limit hiked from Rs 2.5 lakh to Rs 3 lakh
 No change in surcharge for corporates, individuals
 Education Cess to stay at current 3%
 Investment limit under Section 80C hiked to Rs 1.5 lakh from current Rs 1 lakh
 Exemption on housing loans interest on self-occupied property increased from Rs 1.5 lakh to 2 lakh

Other highlights:

 The people of India have decisively voted for change
 India unhesitatingly desires to grow
 We look forward to lower levels of inflation
 The country is no mood to suffer from unemployment, lack of infrastructure and apathetic governance
 The continuing slowdown in emerging economies has posed threat to global economic recovery
 Slow decision-making has led to slow growth
 Steps announced in the budget are aimed for sustained growth of 7-8% within the next three-four years
 It would not be wise to expect that the same can be done and must be done in the first budget being
 presented within the first 45 days of the new govt
 We will leave no stone unturned to create an vibrant and strong India
 Will lay down broad policy indicators in the budget

 We cannot spend beyond our means, we needs to follow fiscal prudence
 We cannot leave a legacy of debt for our future generations
 Considering we have 2 years of GDP growth and static industrial sector, the target of 4.1% fiscal deficit is dauntin
 I accept this target as a challenge
 Black money is curse on our economy
 We have to take bold steps to spur growth in economy. They are directional
 Govt committed to minimum government maximum governance
 Aim to make food and fuel subsidy more targeted so that it helps those who need them
 Urgent need to generate more resources for the economy
 This govt will not bring any change in tax rates retrospectively
 All retro taxes to be scrutinized by a high-level committee
 GST by end of the year (sets no firm deadline)
 To encourage development of smart cities; FDI cap on minimum built up area reduced
 Policy of NDA govt is to promote FDI in select sectors
 GST will streamline tax administration and result in higher tax collection for Centre and states
 FDI in defence sector to go up to 49%
 Greater autonomy to banks
 PSU 247,944 cr capex to create industrial cycle
 Smart cities: PM has vision of developing 100 new cities
 Rs 7,060 cr fund for smart cities
 Tourism: e-visas to be introduced at nine airports in the country in a phased manner
 Real estate investment trusts – modified REITS is being announced for infrastructure projects to reduce pressure on banking system
 Kisan Vikas Patra to be pushed further
 New scheme for skill development called Skill India to be launched
 Sanitation in every household by 2019
 Shyama Prassad Mukherjee Rozgar mission to be launched
 New scheme for agricultural irrigation
 Rs 500 cr for rural electrification
 Rs 200 cr for Sardar Vallabhbhai statue in Gujarat
 Rs 50000 cr for SC/ST schemes
 Social security: minimum pension of Rs 1000 per month for all subscribers of EPFO scheme
 National level institute for mental health to be set up
 Currency notes with braille like signs to help the blind
 Rs 150 cr on new scheme to improve safety of women in big cities
 ‘Beti bacahao, beti padahao’ scheme to be launched – Rs 100 cr allocation
 Gender main-streaming: School curriculum to have a chapter on the issue
 MNREGA will be made more productive; it will be linked to agriculture related activities
 Women SHGs bank loan scheme to be extended to other districts
 Rural housing scheme: allocation increased to Rs 8000 cr
 Watershed programme: New prog with outlay of Rs 2000 cr
 Backward region grant fund for 272 backward districts – BRGF will be restructured
 Rs 3600 cr for national rural drinking water programme
 Health for all: free drug and free diagnostic services
 Four more AIIMS to be set up in AP, WB, Vidharbha and Purvanchal – Rs 500 cr allocation
 12 more govt medical colleges to be added
 Aim to create an AIIMS in every state
 Govt to provide toilet and drinking water in all girl schools
 New teachers training scheme is being launched: Rs 500 cr allocated
 Rs 100 cr for virtual classrooms
 National Centre of Humanities would be set up in MP
 Five more IITs and five more IIMs to be set up
 Pan-India programme called Digital India would be launched – it will provide broadband connectivity to villages
 5 new IITs in Jammu, Chhattisgarh, Goa, AP & Kerala
 5 new IIMs in HP, Punjab, Bihar, Odisha & Maharashtra
 Program for upgradation of skills and ancient arts for the minorities
 Two more research institutes on farming to be set up in Assam and Jharkhand
 New agri univ in AP, Rajasthan
 Horticulture univ in Telangana and Haryana
 National rural and tech mission is proposed – Rs 500 cr allocated
 New plan to promote community radio – Rs 100 cr allocated
 Urban renewal to get Rs 50000 cr
 Urabn metro: govt will encourage metro system in PPP mode
 Rs 100 cr for Lucknow and Ahmedabad metro projects
 New mission for low cost affordable housing for urban poor – Rs 4000 cr allocated
 Easier flow of FDI is also being encouraged in this sector
 Rs 100 cr for modernisation of madrasas
 Slum development to be included in Corporate Social Responsibility activities
 Urban renewal will address drinking water, use of recycled water,solid waste management, digital connectivity; 500 habitats supported
 15 Model Rural Health Research centers to be set up for rural health issues
 Anti-poverty programmes will be targeted well
 New scheme to provide soil health card to each farmer- Rs 100 cr allocated
 Climate change is a reality which we have to face – national adaptation fund for climate change to be set up – Rs 100 allocated
 Finance to 5 lakh joint farming groups through NABARD
 Price stabilisation fund to be set up – Rs 500 cr allocated
 State govts to be encouraged to set up farmers’ markets in cities and town
 Rs 8 lakh crore target for agriculture credit
 3% tax subvention for farmers who pay up on time
 RIDF target raised to 30000 cr
 Warehousing: Rs 5000 cr allocated
 Set up long term rural credit fund to be started by NABARD
 Rs 5000 cr for STRC fund
 To set up 100 mobile soil testing labs across country
 See FY’14 growth at 4%
 Committed to restructuring FCI
 Kisan Television will be launched this year – this will provide real time info to farmers on farming techniques – Rs 100 cr allocated
 All the govt departments and ministries will be integrated through e-platform by 31 Dec this year
 Export proportion mission to be set up
 Committed to revive SEZs
 Effective steps to revilatise SEZs
 SMEs form the backbone of economy
 Most SMEs are owned and run by SC/STs and OBCs
 Committee to be set up to look at financing this sector
 National Industrial Corridor with headquarters in Pune will be set up. Rs 100 crores allotted
 Apprentice Act to be suitably amended to strengthen the Apprentice Training Scheme
 6 more textile clusters to be set up at Bareily, Lucknow, Kutch, Mysore, Bhagalpur and TN
 Hastkala academy to be set up in Delhi
 Pashmina production prog in J&K
 To set up 7 new Industrial Smart Cities
 Manufacturing units will be allowed to sell products through retail, e-commerce
 Trade facilitation centre to promote handloom work in Varanasi
 Ganga inland navigation – jal marg from Allahabad to Haldia at the cost of Rs 4200 cr
 New scheme to develop new airports in tier 2 and tier 3 cities
 Road sector needs huge investment
 NHAI and state highways get 37,000 cr which includes Rs 3000 cr for Northeast
 New expressways to be developed in parallel to the development on industrial corridors
 Rs 100 cr for new coal based power generation technology
 Big solar projects in Rajasthan, TN and Ladakh – Rs 400 cr allocated
 Current impasse in mining sector will be resolved expeditiously
 Royalty on mining will be reviewed as suggested by many state governments
 Capital markets: Need to strengthen regulatory framework
 Essential to have modern monetary policy framework, Govt to work with RBI on this
 Liberalise AGR-GDR scheme part
 Indian capital market to be energized by introduction of single KYC scheme
 Urgent need to converge Indian accounting standards with international ones
 Adherence to Indian accounting standards to be made mandatory by 2017
 Two bank accounts in each household for marginal sections
 Banks to be encouraged to give long term loans to industrial sector
 NPA is a cause of worry
 6 new debt recovery tribunals to be set up
 Insurance penetration is still very low
 Pending Insurance Amendment Bill to be taken up in Parliament
 Benefits of insurance have not reached larger section of people, will address in multi-pronged manner with stakeholders
 Provide all households with banking facilities to empower the weaker sections
 Committee will be set up to examine how unused money in postal schemes can be utilized
 Govt committed to providing 24×7 power supply to all homes
 Chit Fund and Money Circulation Act will be overhauled
 PPF ceiling upped from Rs 1 lakh to be Rs 1.5 lakh
 Small savings scheme to be revitalized
 Capital outlay of defence increased by Rs 5000 cr
 New war memorial will be constructed at Princess Park – Rs 100 cr allocated
 Small savings scheme to promote girl child, which will mature at the time of her marriage, higher education will be introduced
 Renewed effort to link rivers, Rs 100 cr for detailed study on it
 New scheme Namami Ganga for rejuvenation of River Ganga gets Rs 2,037 cr
 Rs 990 crore for development of villages along the border
 Rs 100 cr set aside for development of Technology Development Fund
 National Police Memorial to be allocated Rs 50 cr
 Allocation for defence Rs 2,29,000 crore
 Budget proposes National Housing Banking programme; sets aside Rs 8,000
 Rs 500 cr for five tourists circuits
 National sports academies to be set up in different parts of India
 Rs 200 cr for upgradation of stadiums in J&K
 Sports university to be set up in Manipur, Rs 100 allocated
 Rs 100 cr for training for forthcoming Asian and Commonwealth Games
 Young leaders prog for youth to be started, Rs 100 cr set aside
 Displaced Kashmiri migrants rehabilitation gets Rs 500 cr
 National Centre for Himalayan studies to be set up in Uttarakhand
 National institute for customs and central excise to be set up in Karnataka
 Development of rail system in Northeast get Rs 1000 cr over and above what has been provided in interim budget
 New 24×7 TV channel for Northeast
 Union govt to help Andhra and Telangana in reorganization
 Rs 200 cr for power reforms and Rs 500 cr for water reforms in Delhi
 Rs 150 cr for communication needs of Andaman and Nicobar Islands
 Rs 100 cr set aside for development of organic farming in Northeast region

Budget estimates:

 Non-plan expenditure at Rs 12,19,892 crore
 Non-tax revenue at Rs 2,12,544 crore
 Revenue deficit pegged at 2.9 percent of GDP
 Plan expenditure at over Rs 5.75 lakh crore
 Impact of tax changes have been factored
 60 more Ayakar Sewa Kendras to be set up in the country
 Income Tax Dept is expected to function not only as an enforcement dept but also as a facilitator
 Net effect of direct tax proposals is revenue loss of Rs 22,200 cr
 Long-term Capital Gains tax on MFs raised to 20% from 10%

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