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| Edited By: DNA Web Team |Source: DNA webdesk |Updated: Mar 19, 2018, 06:25 AM IST
Finance Minister Arun Jaitley has announced his maiden full-fledged budget under the Narendra Modi-led NDA government. The stock markets have closed in green on Budget Day for the first time in four years.
India Inc is happy with the budget with most calling it a pro-reform and a positive budget.
Even though people were expecting Jaitley to reduce their tax burden but the finance minister did not touch the income tax slabs. He, however, provided for extra deductions. He said that individuals can now save tax upto close to Rs 4,50,000 a year if they plan well.
However, as with all budgets, some products get cheaper and some get dearer.
Also Read: What does the Budget say about the things you buy on a regular basis
The FM said that the fiscal deficit target of 3% of GDP will now be reached in three years as against 2 years stated earlier. He said that this is important for investments to continue as public investment is needed to boost growth.
Talking about the policy paralysis of the past, Jaitley said that the current government has worked hard over the past 9 months to bring the investor sentiment back. He said that the budget shows exactly that resolve.
Budget COMMENTARY:
PM has said Eastern part has to grow faster so we chose Bihar and West Bengal. These states need certain incentives. For AP, 15% investment allowance and 15% depreciation. With this, the interaction comes to a close.
I have to attract investment. Look at ASEAN countries. They are 10% cheaper in taxes. So in an ideal tax structure you bring rates down, make them globally competitive but along with that you phase out exemptions.
It a taxpayer wants, can save Rs 4,44,200 from deductions. So Rs 7-8 lakh earning individual can plan and save a lot more. All this will be his/her own savings.
In comparison of consumption society, I like an economy that saves, more.
On IT slabs, Jaitley says around 4 crore people pay tax which is 3-4% of our population. This has to increase. This is a challenge. Govt's fiscal space has to be seen and after giving money to states this fiscal space with me is reduced. I have forced people to save. I want to be 35-36%.
Jaitley says decided that super rich can pay 2% surcharge. They can pay Rs 9000 crore then us getting around Rs 1000 crore from wealth tax.
Meanwhile, the stock markets did crash but seem to be recovering at the moment. Sensex now down only 60 points.
Investors were running away looking at taxation in India. If you see past 9 months, we have tried to correct it.
I did a balancing act by aiming for 3% fiscal deficit in three years than 2 years earlier.
We can make India fastest growing economy in the world. If we can continue on this pace for 10-15 years then it will be possible to wipe out poverty from India.
People should be incentived to buy health insurance policies.
As far as devolution is concerned, discretion must end.
Cleaning up unclaimed amounts in PPF and EPF and it will be used for social sector reforms.
Jaitley is now giving an interview. He says we between middle class and weaker section there is a common thread. Deduction allows middle class to put in more corpus in NPS.
This budget has been a bonanza for farmers. Agricultural credit target has been increased by Rs 50,000 crore to Rs 8,50,000 crore.
What does this budget means for the middle class?
PM Modi is happy with the budget. Congratulates Jaitley on pro-poor, pro-growth budget.
2015 Budget will further reignite our growth engine, signalling the dawn of a prosperous future. #SabkaBudget
— Narendra Modi (@narendramodi) February 28, 2015
Jaitley has concluded his speech. The parliament is in commotion. Nothing new there.
He is concluding. Says Budget is roadmap for the future. Genuinely stake claim of intellectual honesty. We are doing for what we have been voted to power for.
Direct tax to lead loss of revenue of Rs 8000 crore. Net impact positive tax gain of Rs 15068 crore
Yoga: include in charitable ambit of IT act.
Giving tax concessions without fiscal space
Transport allowance at Rs 800 per month exemption increased Rs 1600 a month.
To provide social security net, additional deduction of Rs 50,000.
ADDITIONAL DEDUCTION OF RS 20,000 FOR DIFFERENTLY ABLED.
Extention of benefits to middle class:
INCREASE IN LIMIT OF DEDUCTION OF HEALTH INSURANCE PREMIUM FROM 15000 TO 25000!
SENIOR CITIZENS, LIMIT INCREASED TO RS 30,000.
Indirect taxes:
Increase clean energy cess to finance clean energy initiatives. Swacch Bharat cess of 2% if need arises.
Retrospective Tax:
To reduce hassles, propose to increase threshold limit from Rs 5 crore to Rs 20 crore.
To bring in additional Rs 9000 crore with the surcharge.
Abolish WEALTH TAX and replace with ADDITIONAL 2% SURCHARGE on SUPER RICH with INCOME OF OVER RS 1 crore.
Extend deduction of employment of new regular workmen, eligibility from 100 employees down to 50.
Defer applicabaility of GAAR by two years.
Propose to rationalise capital gains regime.
Propose to undertake series of steps to attract capital.
With regard to curbing domestic black money, new bill will be introduced in current session of parliament.
Jaitley is now outlinining key points of this black money law.
BLACK MONEY:
New structure is being put in place. Tracking black money and bringing it back is top priority. Enact a comprehensive law on black money to deal with money stashed abroad. Bill to be introduced in current session.
TAX:
GST is expected to play transformative role. Add buoyancy. Moving on fronts to implement GST next year.
The basic rate of corporate tax is 30%. Higher than other countries. Effective collection is only 23%. Propose to reduce CORPORATE TAX to 25% over 4 years.
Adopted several themes: Measures to curb black money. Job creation. Make in India. Min government and max governance.
Tax receipts: 14,49,490 crore.
Defence:
Govt permitted FDI in defence already. Pursuing Make in India for greater self sufficiency. As against expenditure at Rs ,22,000 crore, budget allocation for 15-16 is Rs 2,46,727 crore
Jaitley is now laying out the money he has provided for various schemes like midday meals, etc. Says significant sums will be spent by states. Urge states to use their enhnaced resources in these areas.
Propose to give special assistance to Bihar and WB as has been provided in case of AP.
Digital India: 7.5 lakh km speeded up.
For NE: Centre for Fim Production, Gaming in Arunachal Pradesh.
Another AIIMS like institute in Bihar. IIT in Karnataka. Postgrad institute of horticulture in Punjab. IIM in J&K and AP.
AIIMS in J&K, Punjab, TN, HP and Assam.
A fully IT based student financial authority to monitor scholarships. Ensure no student misses out on higher education for lack of funds.
Young people have to be educated and employable. PM has explained how Skill India needs to coordinate with Make In India. We will launch national skills mission. Consolidate skill initiatives and allow us to standardise outcomes.
Public contract resolution of disputes bill.
Visa on arrival: 43 countries part of it. Tourism has increase. Propose to increase countries to 150 in different stages.
Propose to start working to support heritage sites. Churches in Goa, Hampi in Karnataka, Elephanta Caves in Mumbai, Rajasthan, rani ka Waav, Leh Palace, varanasi temple Town, Jallinagwallah and Tombs in Hyderabad.
Govt is committed for safety of women. Another Rs 1000 crore for Nirbhaya fund.
Act East policy of Indian Govt. In order to catalyse investment from private sector in this region, SPV to be set up.
Working to make India a cashless society.
GOLD:
Largest consumer is India.
Stocks estimated over 20,000 tonne. I propose:
Introduce gold monetisation scheme. Ern interest on metal account.
Two, develop alternate financial asset. Sovereign gold bond.
Low paid workers suffer deductions in EPF, etc. Providing two options: EPF or new pension scheme. Second: below certain threshold of income, EPF should be optional.
Vision of putting in place a direct tax regime.
Setting up public debt management. Merge forwards markets commision to strengthen regulation with SEBI and reduce speculation.
Rs 5000 crore in infra fund just announced.
This will make this year's allocation highest ever and will help in increasing rural wages. Further allocating intergrated child development scheme Rs 1500 crore, Rs 500 crore for other child schemes.
I will enhance allocation to MNREGA by Rs 5000 crore. He says "Kharge bahut prassan honge."
5 UMPPS. All linkages in place by transparent auction. Investment Rs 1 lakh crore. Plug and play in road, rail and airports, etc.
14 regulateroy permissions at one source. For ease of doing business. States are joining this. But to make India investment destination, we need to simplify this. Appoint expert committee to prepare draft legislation where need for multiple regulatory prior permission can be done away with.
Ports and Shipping:
Ports in public sector will be encouraged to become companies in companies act.
Startups:
Jaitley says needs to be addressed to create jobs. Establishing self employment and talent utilisation (SETU). Rs 1000 crore initially for this.
Tax free infra bonds for road, rail and irrigation projects.
Major slippage over the last decade. Incerase outlays on roads and railways by Rs 14,000 crore and Rs 10,000 crore, resp. Capex Rs 317,000 crore.
Being sensitive to the need of the poor, remain committed to ongoing schemes of SC, ST and women. Allocation made. SC over Rs 30,000 ST over 19000 crore , women over 17000 crore.
Propose a new scheme for providing aid to senior citizens living below poverty line.
For BPL cardholders, small and marginal holders, detailed scheme to be issued in March.
Jaitley gets cheer from his peers for this particular announcement.
Large portion of population is without insurance of any kind. Young will also be pension-less as they age. Propsoe to create universal social security system. Rs 2 lakh for premium of Rs 12 per year for accidental death for poor.
Bankruptcy law reform has been identified as a key to ease of doing business. Bring comprehensive Bankruptcy code in 2015-16.
There are 5.75 crore small businesses, trading and services. 62% are owned by SC, ST and OBCs. These entrepreneurs find it difficult to access formal systems of credit. I propose micro units development refinance agency Mudra bank corpus of Rs 20,000 crore.
To create national agri market. Creationg of national unified agri market underway.
Govt is committed for employment from MNREGA. Initial allocation of over Rs 34000 crore.
To support agri sector, special focus on small and marginal farmers I propose Rs 25000 crore, and Rs 15000 for long term fund, Rs 45000 crore for short term funds.
Over Rs 6000 crore transfered for LPG subsidy to the people.
Subsidies are needed for poor and not those well off. We needed targeted subsidies. We are committed to this appraoch. We have ambarked on this path. Direct benefit will be further expanded.
Budget reflects considerable scaling up of disinvestments including loss making units.
I will complete the journey of fiscal defict of 3% in three years and not 2 years as envisaged earlier.
Will meet fiscal challenge of 4.1% despite issues. Committed to meet 3% fiscal deficit target in medium term.
Says Rs 5.20 lakh crore in taxes to go to states in 2015-16.
Challenges Jaitley outlining: Agri income under stress, increasing investment in infra, manufacturing has declined, mindful of fiscal discipline.
Committed to improve irrigated areas in rural India. Rural-urban divide should no longer be acceptable to us. 2/3 of our people are below 35. Aim to make India a manufacturing hub.
To ensure education improves in terms of quality and learning outcomes.
Good health is a neccessity for quality of life and ability to support his or her family. Providing medical facilities in each city and village is essential.
Team India vision led by states and guided by Centre. Roof for each family in India. Team India to complete 2 crore and 4 crore houses in rural and urban areas. 24x7 power supply, clean water to drink and toilets, as basic amenities.
Growth in 2015-16 expected at 8.1-8.5%. Aiming at double digit growth seems feasible soon.
One of achievements of my govt is to conquer inflationl. Decline shows structural shift. Going forward CPI close to 5% to allow further easing of monetary policy.
Will build 6 crore more toilets. Embarked on two more reforms GST and JAM Trinity.
Jaitley lists out three events that NDA government did. Success of Jan Dhan, coal auction and Swacch Bharat.
People of India wanted scam-scandal-corruption raj to end. Our actions have not only been confined to core or macro economic areas alone but also regards to allocation of natural resources, girls and education, empoloyment, non adversarial tax, agri productivity, etc.
We have turned around the economy, Jaitley says. Investors seeing as with renewed hope.
Jaitley is currently going through economic parameters that the NDA government inherited. Says "we have come a long way since then." CAD expected below 1.3% of GDP. Real GDP is exptected to grow at 7.4% making India fastest growing economy in the world.
World is predicting that it is India's chance to fly. "Kuch toh phool pkhilaye aur kuch phool khinae hain. Mushkiil ye hai ke baagh mein kaante kayi purane hain."
Speech begins. Jaitley says "we have embraced states as equal partners. It is my belief that every rupee of public expenditure will contribute to betterment of people's lives."
Cabinet has approved Jaitley's 2015 Union Budget. Speech begins soon.
.. And Jaitley, with his famed briefcase with budget papers, has arrived!
Do you think the dogs can sniff if you are getting an income tax rebate?
Security check of Union Budget papers underway #Budget2015 at Parliament pic.twitter.com/Qff5u1axBL
— ANI (@ANI_news) February 28, 2015
Arun Jaitley's speech to begin shortly. Budget papers have arrived in the Parliament.
Union Budget papers arrive in Parliament #Budget2015 pic.twitter.com/PgG3a6PCja
— ANI (@ANI_news) February 28, 2015
The Sensex did shed a few points after an over 250 points opening but is again inching up slowly. Up 230 points at the moment.
Just to refresh your memory, Mr Finance Minister. Here is what the Aam Aurat wants from your Budget. Hope you heard her!
Some more divine intervention sought.
Prayer at a Gurudwara in Lucknow ahead of the Union Budget #Budget2015 pic.twitter.com/xGTF5BVpQU
— ANI (@ANI_news) February 28, 2015
If the Finance Ministry had the 'Halwa' ceremony then the people of India are conducting 'hawan' in kanpur ahead of the Budget!
Kanpur : People conduct 'hawan' ahead of the Union Budget #Budegt2015 pic.twitter.com/RFXJ5PTB3y
— ANI (@ANI_news) February 28, 2015
Dalal Street seems to be very excited. Up by 216 points at the moment. Mellowed down a bit from the opening. Is it justified?
"Reforms" has been the buzzword for the most awaited economic event called the Union Budget 2015 of the Narendra Modi-led NDA government. But with the Economic Survey ruling out 'Big Bang reforms' championing a more measured approach, today's Budget is unlikely to meet the hyped-up expectations of the people, no matter how good it is.
Also Read: What would it be, a lofty budget or an idea of realistic goals?
Arun Jaitley has reached the Parliament. Budget speech begins at 11 am.
Arun Jaitley leaves for Parliament. Stay tuned for the picture with his briefcase. Something that has become an icon with finance ministers presenting budgets in India.
... And the stock markets zoom at opening. BSE's Sensex is up 250 points and NSE's Nifty is up 70 points. A gentle reminder that the stock markets are closed on Saturday but are open today especially for the Budget.
The Finance Minister has reached President House
Delhi : Finance Minister Arun Jaitley reaches President House #Budget2015 (pic : Finance Minister's convoy) pic.twitter.com/SQh34tlGG6
— ANI (@ANI_news) February 28, 2015
The audience has applauded ten months back. Now, it’s time to deliver a show that has been awaited for ten months. Just a reminder that while, in the last few years, we have been watching P Chidambaram and Pranab Mukherjee carefully for the Budget. Now, we are looking at Modi who is the PM; hence let’s focus on Arun Jaitley who is going to reading out and has authored the Budget. Jaitley is a former lawyer, who was with Rajya Sabha before this stint.
Also Read: Watch Jaitley’s Budget, not Modi’s
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What to expect from this Budget?
Credit Suisse has said that it expects ARun Jaitley to raise Income Tax slabs which is likely to bring cheer for the people.
Also Read: Credit Suisse sees Jaitley boosting capex, raising I-T slab
The Economic Survey has pointed out the need for boosted investment to increase the growth rate. How this government manages to achieve this will be outlined in the Budget speech by Jaitley today.
Also Read: Tax sops likely in Arun Jaitley's first full year Budget
The Economic Survey has pointed out that India has see over 8% growth rate in the next fiscal and the government is looking to boost investment in growth than subsidies to achieve this target. The Survey also pointed out that a double-digit growth is very much possible in the coming future.
With all this in mind, what steps Jaitley outlines today becomes all the more important. India Inc is looking closely at Jaitley to his what are his solutions to problems like stalled projects and dimming loan growth of banks.
