When Arun Jaitley reads out his annual Union Budget on Thursday, it could well be the constructive road map the NDA government lays out to bring the "Acchhe din" it has promised the nation. The state of the economy of India is deplorable though it looks quite solid when compared to many other countries in the world. Jaitley needs to handle taxation issues, social sector schemes, rationalise its subsidies without affecting the poorest, and revive growth in the economy. The expectations from the Budget is huge. Though many of our problems cannot be fixed in a year, this Budget has to lay out the vision of the government for the nation.
Here's a Live coverage of the Budget:
Jaitley finishes his Budget speech, tables the Bill in the Parliament. The speaker adjourns the House till Friday morning. The house will resume its activities on 11 July 2014.
Rs 7500 crore additional revenue due to changes in indirect taxes
Service Tax: Minimal changes. Negative list: Sales of space for advertisements on online. Newspapers will remain exempted.
Tourism to be boosted for change in service tax
Customs duty: Reduced basic customs duty for some industries with varying rates
LCD and LED TV prices below 19 inches to go down
Coal customs duty changed to reduce disputes regarding quality of coal
Excise duty: Tweaked to boost domestic production
Concessional 2% benefit to sports clubs
Cigarettes, Pan Masala, Gutka, chewing tobacco: Price to go up by hiking duty
Additional duty of excise on aerated waters containing added sugar
Reduced duty in footwear, packaged food
Power: 10 year tax holiday for new generators or distributors
Income out of portfolio: capital gains
Long term foreign borrowing: eligible date from 31.6.2016 to 20.6.2017: concessional rate of 5% for interest payments. All bonds, not just infrastructure bonds
Transfer Pricing: Range concept for determination of arms length price.
Provide investment allowance at 15% for 3 years to the manufacturing company which invests more than Rs 25 crore in plant and machinery
Direct Tax Code: Govt will review and take a decision. Previous proposal lapsed with dissolution of Lok Sabha
Non plan expenditure: Rs 1219892 crore
Fertiliser and capital expenditure separate
Direct tax: retain interim budget targets. Rs 13,64,524 cr tax receipts
Introduce measures to promote manufacturing
Individual: No changes in tax rate
Increase personal exemption increased by Rs 50000.
Senior citizens: moved up to Rs 3 lakh
No change in surcharge rate
Education cess: remain 3%
Savings at 30.1% in 1013. Increase in savings required.
Investment limit under 80C increase to Rs 1.5 lakh
Housing loan: Rebate hiked to Rs 2 lakh for self occupied houses
Andhra Pradesh-Telengana: Provisions to help both states
60 more Ayakar Sewa Kendras to be set up across the country
Rs 10000 crore extra to build railways in North East over and above Interim Budget
Displaced Kashmiri migrants: Rs 500 crore for rehabilitation
Himalayan studies: National centre in Uttarakhand with initial outlay at Uttarakhand
North East: organic farming development: Rs 100 crore
Jammu & Kashmir: special sum of Rs 200 crore to upgrade indoor and outdoor stadiums
Sports University in Manipur: Rs 100 crore
International events to be held in North and North East India
Rs 100 crore for training of sports persons for Asian Games
Young leader's programme: Rs 100 crore
Serious effort to link rivers. Sets aside Rs 100 crore for a report.
Substantial money spent to clean Ganga. Integrated Ganga Conservative Mission: Rs 2037 crore for it
Rs 100 crore for Ghat development
Science and technology
Turn 5 centres into research instituions. PPP model
2 clusters for research in Kolkata and Pune
Rs 2,29000 crore for defense
1 rank- 1 pension for army
Govt in principle agrees to consolidation of PSU banks
Rise of NPA matter of concern
6 new revival tribunals to be set up
Bank will be encouraged to give long term funds & loans to the infrastructure sector
Insurance Bill to be brought for consideration in Parliament
Special small saving instrument for girl child education and girl marriage
PPF scheme: Rs 1.5 lakh per annum
Essential to strengthen financial sector
Modern monitory policy to be brought in
Advise regulators for liquid corporate bond market, eliminate unnecessary restrictions
Allow international settlements of bond settlements
Introduce uniform KYC norms across financial sector
1 operating Demat account to control any instrument
New accounting norms for corporate India: mandatory by 2017
Energy and transport
Rs 4200 crore: Inland navigation
Airport:Scheme for airport in Tier 1 and 2 under Airport Authority of India. Airport to be built under PPP mode
Road:NHAI to get Rs 37000 crore; include Rs 3000 crore for North East
New and renewable energy: Ultra modern solar plant in Tamil Nadu, Rajasthan and Ladakh
Oil and gas: Use of PNG to be increased
15000 km of gas pipeline in the country now. Additional 15000 km required. To be developed udner appropriate PPP model.
Mining: Encourage investment, promote sustainable mining. Current impass including iron ore to be carried out quickly.
4200 cr set aside for the Jal Marg Vikas project on river Ganga connecting Allahabad to Haldia,over 1620 km
National Industrial corridor with headquarter in Pune
SME: Bulk of service sector also SMEs. Majority run by SC ST OBC. Financing is important. Need to examine financial architecture of this sector. Set up committee to give suggestion in 3 months.
Venture capital in SME: Rs 10,000 crore fund. To attract other investors
Apprentice Act to be suitably amended to strengthen the Apprentice Training Scheme
All the Govt departments and ministries will be integrated through E-platform by 31 Dec this year
16 new port porjects this year
Fertilser- must take care of degradation of soil. Intitial fund of Rs 100 crore for climate change fund.
Farmers bank lending: propose to produce of Rs 5 lakh to Bhumeeheen Kisan groups through NABARD
Price stabilisation fund introduced
Food, oil subsidies to be more targeted
Indigenous cattle breeding to be supported
Banks: target of Rs 8,00,000 crore to lend to agriculture sector
Short term crop loan: Farmers to get further incentive of 3% for farmers who pay on time. Was already getting loan at 7%.
Raise RIDF corpus by Rs 5000 crore. Target of Rs 25000 crore set by Chidambaram
Rs 5000 crore for infrastructure fund in agriculture
Long term rural credit bank to provide support to cooperative banks and RRBs, by NABARD. Rs 5000 crore allocated.
Producer's development fund to get Rs 200 crore in NAABARD
Need to restructure FCI
Govt will undertake open market sales to keep prices under control
Farmers to get information on new techniques. Rs 100 crore set aside
FTII Pune, SRFTI Kolkata:special status of national importance
Use of recycled water, solid waste management, sae drinking water: hubs using PPP model to be set up
Rs 100 crore: Metro project in Lucknow
Propose to set up 5 new IIMs in HP, Punjab, Bihar, Odisha & Maharashtra:
Low cost housing:Rs 4000 crore for National Housing Bank
Slum development to be part of CSR.
Currency notes to have braille
Rs 200 crore for 4 agricultural institutes in 4 states
Rs 100 crore has been allocated for the modernization of Madrasas
Universal healthcare: 4 more AIIMS in Andhra Pradesh, West Bengal, Vidharbha, Purvanchal. Rs 500 crore set aside
12 more medical colleges in government hospitals.
Aim to create AIIMS in every state of the country
Rs 3650 crore for safe drinking water
Toilets and drinking water in all girls' school to begin with. More than Rs 26000 crore set aside
Under the 'Pradhanmantri sadak yojna' propose 14,389 cr for development of roads-Arun Jaitley.
Rs 50548 crore for SC-ST plan
Senior citizens: Additional pension introduced by NDA govt last time.
Unclaimed amount of PPF etc. Mostly out of investments belonging of senior citizens. Set up a committee to protect senior citizens. report by December 2014.
EPFO to launch unified accounts to transfer PF funds.
Min pension of Rs 1000 per month. Initial fund of Rs 250 crore.
Differently abled persons: Make inclusive opportunities. Centre for sports for differently abled
Visually challenged: 15 new braille press.
Women's safety: Rs 50 crore to be spent by Roads ministry to increase safety of women on roads: Pilot project
Beti bachao Beti padhao Yojana: Apathy towards girl child rampant. Rs 100 crore allocation.
NREGA: Rural SHGs extend 4% loans to more rural areas. NREGA to target more productive work.
National Housing programme: Rs 8000 crore
Banking: Disinvestment to retail investors to collect money. To give greater autonomy to banks.
PSU capital expenditure: Rs 2, 47,000 crore.
Urbanisation: Need to develop new cities. Provides Rs 7060 crore.
E Visas: To facilitate visa on arrival
Infrastructure Investment Trust to help infrastructure projects.
Kisan Vikas Patra: To have bank and non-bank savings for farmers.
Bulk of farm lands are rain fed. Must improve irrigation. Sets aside Rs 1000 crore for this.
Sanitation: Rural sanitation to reach of every household.
Power: Dindayal Upadhyay Gram Jyoti Yojana launch: Rs 500 crore set aside
Litigation in direct tax: Resident to have possibility of getting advanced order on tax liability.
FDI: Allow selectively in sectors. India needs a push for job creation. We are buying substantial portion of defence requirement.
Insurance sector: Increases FDI to 49% from 265 currently.
FDI in defense raised to 49%
Promoted to minimum government and maximum governance.
Govt will form commission to review expenditure.
Urea policy will be reformulated.
GST essential to restructure taxation. I assure all states govt will be more than fair to all states.
Retrospect taxation: No change to be brought in retrospectively. Govt will be extremely cautious.
Jaitley says the people below poverty line wants to raise themselves above it. While higher growth is important, we cannot ignore that the poor suffer the most.
The government has taken up the challenge in right earnest. The task is challenging because we need to revive manufacturing and infrastructure sector. We need to introduce fiscal prudence. We cannot spend to day which is compensated by tax in future.
Must improve tax-GDP ratio. Although the external sector witnessed turn around and CAD improved, it was through restriction on non-essential imports.
Fiscal Deficit: target 4.1% set by Chidambaram is daunting, but accept the challenge. 3.6% for 2016 and 3% for 2017.
Arun Jaitley start reading out his Budget speech at Lok Sabha. He says people have voted for a change, they decide to grow unhesitatingly.
Cabinet meet is over; the Budget has been approved by the Cabinet. The Budget announcements will begin at 11.00 am. The Sensex in the meanwhile stays absolutely flat at 25444 and Nifty at 7578.
Arun Jaitley enters the Parliament at 10.00 am, and will hold a Cabinet meeting before announcement of the Budget. The Sensex meanwhile is flat at 25435 points, and will await movement till the announcements start pouring in. Here are the copies of the Budget at the Parliament.
— ANI (@ANI_news) July 10, 2014
Arun Jaitley reaches North Block at 9.00 am in the morning. He will also meet President Pranab Mukherjee and Prime Ministre Narendra Modi before going to the Parliament to read out his Union Budget. The Union cabinet will meet at 10am before the Budget announcement.
NDTV reports that Jaitley was to convinced he would carry the customary suitcase. But he finally chose one from the two options given.
The word Budget was derived from the Middle English bowgette, which came from Middle French bougette, which in turn is a diminutive of bouge, meaning a leather bag
Though 41% people think the Budget will be for the rich, there is hope that it would improve the life of many.
It needs a boost to its infrastructure sector, especially transport, and manufacturing output needs to be revived. For that the government needs to give out clear idea as to how it will solve the mining and energy sector issues in the country. That would involve both a balance between environment and mining, as well as sort out transportation issues of mined products. The power sector needs immediate attention as the debt of the state electricity boards has been unsustainable for a really long time. It is important to fix these to expect further investment in the sector. It will be worth seeing of Jaitley offer tax exemptions on infrastructure bonds.
Income tax of people will be a big concern, to boost savings and investment rates in the economy. Tax exemption limits have been untouched since 2006, and it is time Jaitley revises them keeping high inflation in mind. This will also boost demand in the economy by leaving greater disposable income at the hands of people.
Jaitley is also expected to announce a roadmap for goods and services tax (GST) which will help build an uniform tax system in the country. But that could be a political hassle that BJP has to tide over by building the political consensus. The Economic Survey mentioned yesterday that the government good begin with a Central GST and then move over to a pan-India one.
With a buoyant market the government is also expected to announce disinvestment targets for the public sector units to get more money for its own investment plans and social sector policies.
The government has not been happy with the UPA flagship programme NREGA. It mentioned in the Survey that the NREGA was pushing up rural wages and causing food prices to rise.The government needs to be cautious if it wants to tweak it as it could be a drought prone year, and not giving people enough options to earn daily wages could drag down thr rural economy even further.
Indirect taxes will be a tricky issue for the government. On the one hand, it needs more money to invest and run its social security schemes, much hike in the duties would only hurt the cash constrained common man.
As we have already argues, the challenges of Jaitley are basic and complicated. But reduction of deficit by cutting subsidies must not be the way out. For those who think trickle down effect is working fine in India, it ahs slipped on the Human Development Report from rank 134 among countries to rank 136. Its mean years of schooling at 4.4 years is much lower than any of its neighbours including Pakistan and Bangladesh.The median years of schooling (if there are 11 students is ascending order, the schooling year of the fifth child) is expected to be much lower. In such a situation building a robust education and healthcare system, should be prime concern for the government.