UNION BUDGET 2014-15 JAITLEY JOURNEY 1 Prepared by: AGGRAJ
SHARMA
On May 16, the BJP came to power with 282 seats, the most won
by a single party in 30 years. It was a sweeping mandate for
change, jobs, growth. Does the Budget reflect those
aspirations?
The Three Goals Presenting the first Budget of BJP government,
Finance Minister Arun Jaitley stuck to the troika of restoring the
pace of growth, containing inflation and concentrating on fiscal
consolidation.
Focus on Fiscal Consolidation NDA governments maiden Budget
retains the ambitious target of 4.1% of the GDP for fiscal deficit
in FY15. Fiscal deficit would be brought down to 3.6% in FY16 and
3% by FY17. Revenue deficit will be lowered to 2.9% by FY15.
The Budget depends heavily on raising revenues by bringing up
the tax to GDP ratio to 10.6 per cent in FY14 from 10.1% in FY13.
Finance Minister says: We cannot spend beyond our means.
Growth GDP growth in 2014/15 estimated at 5.4-5.9 percent
year-on-year. Aims for sustained growth of 7-8 percent in the next
3-4 years. Nominal GDP growth in 2014/15 expected to be 13.4
percent year-on- year. Must usher in policies for higher growth,
lower inflation.
Taxation High level committee to decide on cases of
retrospective amendments. Investment allowance threshold revised to
25 crore from 100 crore at the rate of 15% to boost manufacturing;
to be applicable upto March 31, 2007. Investment-linked deduction
for two new sectors slurry pipelines for iron ore transportation,
and semiconductor wafer fabrication manufacturing.
Tax holiday for 10 years extended to power undertakings that
begin generation, distribution and transmission by March 31, 2017.
DTC to be reviewed. 60 Aayakar Seva Kendras to be opened during
2014-15. Color picture tubes to be exempt from basic customs duty.
Excise duty on footwear reduced from 12% to 6%.
Imposes 10 percent customs duty on some telecom products.
Introduces uniform customs duty on all types of coals. Raises
export tax on bauxite to 20 percent from 10 percent. The government
has set a direct tax collection target of 7,58,421 crore for
2014-15.
Personal Finance Announcement to raise the exemption limit for
individuals from 2 lakh to 2.5 lakh and also for senior citizens
from 2.5 lakh to 3 lakh. Announcement to raise the deduction limit
under Section 80C from 1 lakh currently to 1.5 lakh. Investment
ceiling in the tax-free PPF scheme has been raised to 1.5 lakh from
1 lakh.
Transport It is time to reaffirm our commitment to a better and
more energetic PMGSY under the dynamic leadership of Prime Minister
Narendra Modi. I propose to provide a sum of 14,389 crore. - Arun
Jaitley, Finance Minister
Employment/Education 10,000 crore incubation fund, thrust on
more jobs. The budget also unveiled a national multi-skill
programme called Skill India that would equip the youth with skill,
with an emphasis on employability and entrepreneur skills.
India today needs a boost for job creation. Our manufacturing
sector in particular needs a push for job creation. - Arun Jaitley,
Finance Minister
Energy Plan to replicate Gujrats 24X7 power supply model by
segregating distribution infrastructure. Deen Dayal Upadhyay Gram
Jyoti Yojana for feeder separation will be launched to augment
power supply to the rural areas and a sum of 500 crore will be
given by the government.
Manufacturing Defence, Insurance, Construction get major FDI
boost. FDI in Defence and Insurance sector raised to 49%. The
government is looking at Defence production as a key player in its
strategy to revive manufacturing.
In line with BJP manifesto to build smart cities, FDI norms in
the construction sector have been lowered by half to $5 million and
the minimum built-up area has been reduced to 20,000 square meters
from the existing 50,000 square meters.
Social Sector Two years on, free drug scheme takes center-stage
in health plan. 12 more government medical colleges will be set up
and dental facilities will be provided at all hospitals. All six
new AIIMs in Jodhpur, Bhopal, Patna, Rishikesh, Bhubaneshwar and
Raipur have become functional.
Four more AIIMs-like institutions in Andhra Pradesh, West
Bengal, Vidarbha and Poorvanchal. Health sector gets 30,645 crore;
Jaitley promises health for all, gives fillip to rural healthcare.
Department of Health Research gets 726 crore. Department of AIDS
control gets 1,785 crore.
Five new IITs and five more IIMs. 12% increase in overall
allocation for education. Increased from 74,621 crore to 83,771
crore.
Agriculture/Defence Announcement for setting up of two centers
of excellence in agricultural research (Assam and Jharkhand), two
agricultural universities (Andhra Pradesh and Rajasthan), two
horticulture universities (Telangana and Haryana) and a dedicated
Kisan TV for farmers. 5,000 crore extra for Defence, but mostly for
R&D.
Budget Highlights 1. Fiscal deficit target 3.6% of GDP for
FY16, 3% for FY17. 2. Subsidy regime, including food and petroleum
subsidies, to be overhauled. 3. High-level panel to interact with
trade, industry for tax law reforms. 4. FDI cap in defence raised
to 49%. 5. FDI cap in insurance sector raised to 49% from 26%.
6. 7,060 crore allotted for developing 100 Smart Cities. 7. For
Smart Cities, built-up area cut from 50,000 sq mts to 20,000 sq
mts. 8. Manufacturing units allowed to sell products through
retail. 9. Electronic Travel Authorisation at 9 airports. 10. Skill
India, a skill programme to improve employability of youths, to be
launched.
11. 1,000 crore Pradhan Mantri Krishi Sinchayee Yojana to
improve access to irrigation introduced. 12. Every household to
have total sanitation by 2019 the 150th birth anniversary of
Mahatma Gandhi through Swachh Bharat Abhiyan. 13. Shyama Prasad
Mukherji Rurban Mission to provide urban amenities in rural areas;
through PPP model. 14. 200 crore for Sardar Patels Statue of Unity
in Gujarat.
15. 500 cr Deen Dayal Upadhyaya Gram Jyoti Yojana for rural
electricity. 16. Institutes for Universal Inclusive Design and
Mental Health Rehabilitation to be set up. 17. Centre for
Disability Sports to be set up. 18. 15 new Braille presses coming,
10 existing presses to be modernised. 19. Currency notes to be
printed with Braille-like signs.
20. 150 crore for safety of women in large cities. 21. 14,389
crore for Pradhan Mantri Gram Sadak Yojana. 22. MGNREGA to
continue, emphasis on asset creation. 23. 8,000 crore for rural
housing. 24. Neeranchal watershed initiative. 25. 3,600 crore for
National Rural Drinking Water Programme. 26. Health for All: Free
Drug Service and Free Diagnosis Service.
27. 28,635 crore for Sarva Shiksha Abhiyan. 28. 4,966 crore for
Rashtriya Madhyamik Shiksha Abhiyan. 29. 500 crore for Pandit Madan
Mohan Malviya New Teachers Training Programme. 30. 100 crore for
setting up virtual classrooms, online courses. 31. 500 crore for
Digital India initiative covering villages.
32. A comprehensive strategy to tackle malnutrition with
timelines, targets. 33. A programme for skill upgrade for
minorities in ancestral arts. 34. 100 crore to modernise madarsas.
35. 100 crore for scheme to provide every farmer a soil health
card. 36. 56 crore to set up 100 Mobile Soil Testing Laboratories.
37. Focus on technology-driven second green revolution.
38. Push for the Amritsar-Kolkata industrial master plan. 39. A
Trade Facilitation Centre and Crafts Museum to promote handloom
products of Varanasi. 40. 4,200 cr Jal Marg Vikas project on Ganga
to connect Allahabad to Haldia. 41. 8,500 km of National Higways.
42. 500 cr for Ultra Mega Solar Power Projects in Rajasthan,
Gujarat, Tamil Nadu, and Ladakh.
43. 400 cr for solar power driven agri- pump sets and water
pumping stations. 44. 100 crore to develop 1 MW Solar Parks near
canals. 45. 100 crore for war memorial and museum in Delhi. 46. 500
crore to develop five tourist circuits with themes. 47.
Sarnath-Gaya-Varanasi Buddhist circuit with world-class tourist
amenities.
48. 2,037 crore for Integrated Ganga Conservation Mission
called Namami Gange. 49. 100 crore for Ghat devlopment and
beautification of river front at Kedarnath, Haridwar, Kanpur,
Varanasi, Allahabad, Patna and Delhi. 50. Special attention for 5
institutions engaged in nanotechnology, material science &
biomedical device technology. 51. To transform Delhis International
Centre for Genetic and
52. Space missions including experimental flight of GSLV
Mk-III, commercial launch of PSLV and two navigational satellites.
53. 1,000 crore for rail connectivity in Northeast. 54. 200 cr for
power and 500 cr for water reforms to make Delhi a world class
city. 55. 10-year tax holiday for power generation, distribution
firms. 56. No customs duty on LCD and LED
57. Colour picture tubes exempted from basic customs duty. 58.
Exemption from 4 % special additional duty on components for PCs.
59. Excise duty increased on cigarettes. 60. Excise duty hiked on
gutkha, tobacco.
What did they say My predecessor has set up a very difficult
task of reducing fiscal deficit to 4.1 per cent of the GDP.
Difficult, as it may appear, I have decided to accept this target
as a challenge. - Arun Jaitley, Finance Minister
The Budget shows that the government is willing to listen and
then state that they will act in due course. - K V Kamath,
Non-Executive Director at ICICI Bank
It is not over ambitious, it is realistic. It is poor-friendly,
farmer-friendly, youth- friendly, women-friendly and senior-
citizen friendly. - Rajnath Singh, Home Minister
This Budget is positive but largely directional and
aspirational. I was expecting bolder reforms for boosting investor
sentiments. -Kiran Mazumdar-Shaw, Chairperson and MD of Biocon
This is a Budget that focuses on speed, scale and skill. Speed
in pushing for time-bound decisions, scale in the emphasis on
improvement and of infrastructure. - Puneet Chaddha, CEO, HSBC
Global Asset Management India
Infrastructure funding had become a bad word for banks. Banks
were not willing to fund. With this move, an out of the box
thinking will enable long term lending for infrastructure sector.
-Deepak Parekh, Chairman, HDFC
They have forgotten everything after getting votes of people.
It seems Bihar is not on radar of the BJP-led NDA government. -
Nitish Kumar, JD(U) leader
The Budget is visionless, missionless, and actionless from the
angle of common people. It is not going to stimulate growth and
development of poor people. - Mamata Banerjee, CM, West Bengal
The Budget turned out to be a dud. What kind of reforms will
the government bring in 200 crore? Instead, it should give people
subsidy on electricity and make water free. - Arvind Kejriwal, AAP
national convener
Any change, even a change for the better, is always accompanied
by drawbacks and discomforts. Our dilemma is that we hate change
and love it at the same time. - Arun Jaitley, Finance Minister
The PM Tweets
These are only the first steps and are directional. ARUN
JAITLEY, Finance Minister