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More money in the hands of tax payer, higher spending on the poor: Arun Jaitley

Union finance minister Arun Jaitley refused to be over-optimistic on the condition of Indian economy. "We are confronted with favourable and challenging circumstances," he told journalists in an interaction after presenting Budget 2015-16 in Parliament on Saturday.

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Finance minister Arun Jaitley, MOS finance Jayant Sinha and ministry officials leave for Parliament to present the Union Budget
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Union finance minister Arun Jaitley refused to be over-optimistic on the condition of Indian economy. "We are confronted with favourable and challenging circumstances," he told journalists in an interaction after presenting Budget 2015-16 in Parliament on Saturday.

Jaitley defended his government's move to increase service tax and reduce corporate tax even as the Congress dubbed his budget as having been designed to favour big industrialists.

Jailtley defended his budget saying, "I have given more money in the hands of the tax-payer and have enhanced spending on the poor."

The finance minister also asked the states to cooperate since the resources available for sharing between them and the Centre have declined.

Jaitley also sought to signal his intent to crack down on black money in the Indian economy especially the money being routed through the real estate sector. He said that no cash payments above Rs 20,000 could be made for purchase of any immovable property. "We have sent a tough message to those who evade law," said Jaitley.

Jaitley outlined the framework of a new law to clamp down on those who stash money abroad. Concealment of income and assets and evasion of tax in relation to foreign assets would land offenders in jail for 10 years. He also stressed that the new law would fine evaders with a penalty of 300% tax and all those found guilty would also be stopped from approaching the Settlements Commission. He promised to crack down on benami transactions and said that laws would be amended to allow for confiscation of benami properties across India.

Jaitley was, however, silent on the government's disinvestment policy. He signalled that the government was actively considering disinvestment of Public Sector Units (PSUs). But when asked whether the government would sell its stake in even profitable PSUs, Jaitley remarked ambiguously, "We are not limiting disinvestment to loss making PSUs."

The finance minister also defended the move to increase service tax to 14%. A 2% Swacch Bharat Cess to fund PM Modi's pet project – Swacch Bharat Abhiyan- has also been proposed in the budget.

Stressing the need to enforce fiscal discipline, Jaitley pledged to reduce the fiscal deficit to 3% by 2017-18. However he announced that Corporate Tax in India would be gradually reduced from 30% to 25%. "The effective tax collection from corporates is 23%. India has one of the highest rates of corporate tax in Asia. So we lose out on both counts" said Jaitley.

Jaitley also announced a slew of social sector schemes including two schemes named after BJP stalwart Atal Bihari Vajpayee. These include the Atal Pension Yojana & the Atal Innovation Mission (AIM). The government will contribute half of the premiums under the Atal Pension Yojana while a sum of Rs 150 crore has been earmarked for AIM.

Jaitley also launched several schemes for the agriculture sector. One of the highlights was the Paramparagat Krishi Vikas Yojana that aims to promote organic farming in the country.

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