29 February 2016
All policies and schemes in union Budget 2016-17:Highlights of budget 2016-17
Measures to boost growth and employment generation
100% deduction of profits for 3 out of 5 years for startups set-up during April 2016 to March 2019
100% deduction of profits for 3 out of 5 years for startups set-up during April 2016 to March 2019
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that startups generate employment, bring innovation and are expected to be key partners in Make in India programme. He proposed to assist their propagation through 100% deduction of profits for 3 out of 5 years for startups set-up during April 2016 to March 2019. MAT will apply in such cases. However, capital gains will not be taxed if invested in regulated/notified Fund of Funds and by individuals in notified startups, in which they hold majority shares.
Sh. Jaitley also proposed a special patent regime with 10% rate of tax of income from worldwide exploitation of patents developed and registered in India.
To get more investment in Asset Reconstruction Companies (ARCs), the Union Finance Minister proposed to provide a complete pass through of income-tax to securitization trusts including trusts of ARCs. He said that the income will be taxed in the hands of investors instead of the trust. However, the trust will be liable to deduct tax at source.
The period for getting benefit of long term capital gain regime in case of unlisted companies was proposed to be reduced from three to two years.
Sh. Jaitley also said that non-banking financial companies shall be eligible for deduction to the extent of 5% of their income in respect of provision for bad and doubtful debts. He reiterated the commitment to implement GAAR from 1.4.2017.
The Union Finance Minister Shri Jaitley also informed that to meet the commitment to BEPS initiative of OECD and G-20, the Finance Bill, 2016 includes provision for requirement of country by country reporting for companies with a consolidated revenue of more than Euro 750 million.
He further proposed to exempt service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship. He also proposed to exempt service tax on general insurance services provided under ‘Niramya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.
Sh. Jaitley also proposed a special patent regime with 10% rate of tax of income from worldwide exploitation of patents developed and registered in India.
To get more investment in Asset Reconstruction Companies (ARCs), the Union Finance Minister proposed to provide a complete pass through of income-tax to securitization trusts including trusts of ARCs. He said that the income will be taxed in the hands of investors instead of the trust. However, the trust will be liable to deduct tax at source.
The period for getting benefit of long term capital gain regime in case of unlisted companies was proposed to be reduced from three to two years.
Sh. Jaitley also said that non-banking financial companies shall be eligible for deduction to the extent of 5% of their income in respect of provision for bad and doubtful debts. He reiterated the commitment to implement GAAR from 1.4.2017.
The Union Finance Minister Shri Jaitley also informed that to meet the commitment to BEPS initiative of OECD and G-20, the Finance Bill, 2016 includes provision for requirement of country by country reporting for companies with a consolidated revenue of more than Euro 750 million.
He further proposed to exempt service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship. He also proposed to exempt service tax on general insurance services provided under ‘Niramya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.
Together with the Capital Expenditure of the Railways, the Total Outlay on Roads and Railways Proposed at Rs 2,18,000 Crore in 2016-17
Total Outlay for Infrastructure in Budgetary Estimates 2016-17 Stands at Rs. 2,21,246 Crore
Total Outlay for Infrastructure in Budgetary Estimates 2016-17 Stands at Rs. 2,21,246 Crore
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that Infrastructure and Investment is the Fifth Support Pillar of Budget Theme ‘Transform India’. A total outlay of Rs. 2,18,000 crore will be spent on capital expenditure of roads and railways in 2016-17. For speeding-up of the process of road construction, an allocation of Rs. 27,000 crore has been purposed for Pradhan Mantri Gram Sadak Yojna (PMGSY) and Rs. 55,000 crore for Road Transport and Highways. Another Rs.15,000 crore are to be raised by NHAI through Bonds. An outlay towards capital expenditure of the Railways is proposed at Rs. 1,21,000 crore.
Shri Jaitley announced that nearly 10,000 KMs of National Highways are expected to be approved in 2016-17. In addition nearly 50,000 KMs of State Highways will also be taken-up for up-gradation as National Highways. The total outlay for infrastructure in budgetary estimates 2016-17 stands at Rs. 2,21,246 crore.
He said that the Government will enact necessary amendments in the Motor Vehicles Act and open-up the road transport sector in the passenger segment. An enabling eco-system will be provided for the States which will have the choice of adopting the new legal framework. Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms. This will benefit the poor and middle class, encourage new investment, promote start up entrepreneurs and create new jobs. This is a major reform measure.
“We are planning to develop new Greenfield ports both in the eastern and western coasts of the country. The work on the National Waterways is also being expedited Rs 800 crore has been provided for these initiatives”, the Finance Minister said. In Civil Aviation sector, un-served and underserved airstrips are to be revived by Airport Authority of India and also in partnership with State Governments.
Union Finance Minister Shri Arun Jaitley spoke on the Key Reform Measures in his Budget speech 2016-17
1. The Government is firm on its course towards fiscal consolidation without compromising on its development agenda. 3.5% fiscal deficit is targeted for FY 2017.
2. Total allocation for Agriculture, Farmers’ welfare and Irrigation set at Rs. 47,912 cr, which is nearly twice the allocation of the previous year.
3. New Health Protection scheme will provide health cover up to Rs. 1 lakh per family and additional Rs. 30,000 for senior citizens.
4. Free LPG connections will be provided in the name of woman member of a family to 1.5 cr BPL households in 2016-17 and to continue for two more years to cover 5 cr households in total.
5. Massive increase in public spending on infrastructure to Rs. 2.21 lakh cr, an increase of 22.5% over the previous year.
6. Higher Education Financing Authority set up, with an initial capital base of Rs. 1,000 cr to promote higher education. In addition, 10 public and 10 private institutions to emerge as world-class Teaching and Research Institutions.
7. Promoting a tax-friendly regime and minimizing hassles due to litigation through a New Dispute Resolution Scheme with low or zero penalties. Ongoing tax cases can be settled with ease.
8. Increased relief for middle-class tax-payers by raising the ceiling of tax rebate under Section 87A to Rs. 5,000 for individuals with income less than Rs. 5 lakhs and by raising the limit of deduction of rent paid under section 80GG to Rs. 60,000.
9. Directly providing financial and other subsidies benefits to people who deserve them by enacting a new law and developing a social security platform using Aadhar.
10. Boosting formal sector employment by provisioning Rs. 1,000 cr towards contributing 8.33% on behalf of all new employees enrolling in EPFO for the first three years of their employment.
11. Simplified and pro-market tax measures such as laying out the roadmap of phasing out of exemptions under Corporate Taxes, abolishing small cesses, providing complete pass through of income-tax to securitization trusts and reducing period of obtaining long-term capital gains treatment for unlisted companies to three years.
12. Promoting entrepreneurship by increasing the turnover limit under Presumptive taxation scheme to Rs. 2 cr, targeting to disburse loans worth Rs. 1.8 lakh cr under PM Mudra Yojana and providing 100% deduction of profits for 3 out of 5 years for start-ups.
13. Facilitating Affordable Housing by 100% tax exemption for profits from small projects, not subjecting distribution REITs and INVITs to Dividend Distribution Tax and encouraging small first-time home buyers by deducting ¬additional interest of Rs. 50,000.
14. Reducing black money through a scheme to declare undisclosed income by paying 45% tax in a given compliance window.
15. Strengthening the financial sector by allocating Rs. 25,000 cr towards recapitalising Public Sector Banks (PSBs), listing Government-owned General Insurance companies, and spelling out a roadmap for consolidating PSBs.
2. Total allocation for Agriculture, Farmers’ welfare and Irrigation set at Rs. 47,912 cr, which is nearly twice the allocation of the previous year.
3. New Health Protection scheme will provide health cover up to Rs. 1 lakh per family and additional Rs. 30,000 for senior citizens.
4. Free LPG connections will be provided in the name of woman member of a family to 1.5 cr BPL households in 2016-17 and to continue for two more years to cover 5 cr households in total.
5. Massive increase in public spending on infrastructure to Rs. 2.21 lakh cr, an increase of 22.5% over the previous year.
6. Higher Education Financing Authority set up, with an initial capital base of Rs. 1,000 cr to promote higher education. In addition, 10 public and 10 private institutions to emerge as world-class Teaching and Research Institutions.
7. Promoting a tax-friendly regime and minimizing hassles due to litigation through a New Dispute Resolution Scheme with low or zero penalties. Ongoing tax cases can be settled with ease.
8. Increased relief for middle-class tax-payers by raising the ceiling of tax rebate under Section 87A to Rs. 5,000 for individuals with income less than Rs. 5 lakhs and by raising the limit of deduction of rent paid under section 80GG to Rs. 60,000.
9. Directly providing financial and other subsidies benefits to people who deserve them by enacting a new law and developing a social security platform using Aadhar.
10. Boosting formal sector employment by provisioning Rs. 1,000 cr towards contributing 8.33% on behalf of all new employees enrolling in EPFO for the first three years of their employment.
11. Simplified and pro-market tax measures such as laying out the roadmap of phasing out of exemptions under Corporate Taxes, abolishing small cesses, providing complete pass through of income-tax to securitization trusts and reducing period of obtaining long-term capital gains treatment for unlisted companies to three years.
12. Promoting entrepreneurship by increasing the turnover limit under Presumptive taxation scheme to Rs. 2 cr, targeting to disburse loans worth Rs. 1.8 lakh cr under PM Mudra Yojana and providing 100% deduction of profits for 3 out of 5 years for start-ups.
13. Facilitating Affordable Housing by 100% tax exemption for profits from small projects, not subjecting distribution REITs and INVITs to Dividend Distribution Tax and encouraging small first-time home buyers by deducting ¬additional interest of Rs. 50,000.
14. Reducing black money through a scheme to declare undisclosed income by paying 45% tax in a given compliance window.
15. Strengthening the financial sector by allocating Rs. 25,000 cr towards recapitalising Public Sector Banks (PSBs), listing Government-owned General Insurance companies, and spelling out a roadmap for consolidating PSBs.
Budget 2016-17 presented in Parliament; major focus on agriculture and farmers’ welfare 28.5 lakh Hectares to be brought under irrigation
Rs. 2.87 lakh crore Grant in Aid to Gram Panchayats and Municipalities
100% village electrification by 1st May 2018
Rs. 2.87 lakh crore Grant in Aid to Gram Panchayats and Municipalities
100% village electrification by 1st May 2018
A massive mission announced to provide LPG connection to poor households
New Health Protection Scheme to provide Health cover upto Rs. 1 lakh per family
1500 Multi Skill Training Institutes to be set up
Emphasis on Infrastructure Development
Total expenditure projected at Rs. 19.78 lakh crore
Major focus on agriculture and farmers’ welfare, massive mission to provide LPG connection to poor households, a new health protection scheme, increased outlay for infrastructure, Rs. 2.87 Lakh crore Grant in Aid to Gram Panchayats and Municipalities, setting up of 1500 Multi Skill Training Institutes and incentives for jobs creation are major highlights of the General Budget 2016-17 presented in Lok Sabha today by Union Finance Minister Sh. Arun Jaitley. Announcing a number of new schemes and increasing the allocation in various sectors Sh. Jaitley underlined that the Government is firm on its course towards fiscal consolidation without compromising on its development agenda. He said 3.5% fiscal deficit is targeted for FY 2016- 17.
Stating that the IMF has hailed India as a ‘bright spot’ amidst a slowing global economy, the Finance Minister said the growth of GDP has now accelerated to 7.6% compared to the last three years of the previous Government when growth had decelerated to 6.3% . He said this was accomplished despite two consecutive years of monsoon shortfall of 13% compared to normal rainfall in the last three years of the previous Government. He added that the country’s external situation is robust and the Current Account deficit has declined from 18.4% billion US dollars in the first half of last year to 14.4 billion this year.
While cautioning about the risks of further global slowdown and mounting turbulence, he said this complicates the task of economic management for India. He said the financial years 2015-16 and 2016-17 have been and will be extremely challenging for Government expenditure. He said the next financial year will cast an additional burden on account of the recommendations of the 7th Central Pay Commission and the implementation of Defence OROP. Stating that the Government has to prioritise its expenditure, Sh. Jaitley said the Government wants to enhance expenditure in the farm and rural sector, the social sector, the infrastructure sector and provide for recapitalisation of the banks.
The Finance Minister said that the Government will undertake three major schemes to help the weaker sections. He said the Pradhan Mantri Fasal Bima Yojana has already been announced. The farmer will pay a nominal amount of insurance premium and get the highest ever compensation in the event of any loss suffered. Sh. Jaitley announced a health insurance scheme which will protect one-third of India’s population against hospitalization expenditure. He also announced that the Government is launching a new initiative to ensure that the BPL families are provided with a cooking gas connection, supported by a Government subsidy.
Shri Jaitley said the Government will undertake significant reforms such as the enactment of a law to ensure that all Government benefits are conferred upon persons who deserve it, by giving a statutory backing to the AADHAR platform. He added that significant changes will be brought in the legislative framework relating to the transport sector so as to free it from constraints and restrictions. Other important reforms, the Finance Minister announced included incentivizing gas discovery and exploration by providing calibrated marketing freedom; enactment of a comprehensive law to deal with resolution of financial firms; providing legal framework for dispute resolution in PPP projects and public utility contracts; undertaking important banking sector reforms and public listing of general insurance companies and undertaking significant changes in FDI policy.
The Finance Minister said the agenda for the next year will be to ‘Transform India’ in this direction. He highlighted that the budget proposals are built on this transformative agenda with nine distinct pillars which include: Agriculture and Farmers’ Welfare; Rural Sector; Social Sector including Healthcare; Education, Skills and Job Creation; Infrastructure and Investment; Financial Sector Reforms; Governance and Ease of Doing Business; Fiscal Discipline and Tax Reforms.
Sh. Jaitley announced that the Government will reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. He said total allocation for Agriculture and farmers’ Welfare is Rs. 35,984 crore. Stating that the ‘Pradhan Mantri Krishi Sinchai Yojana’ has been strengthened and will be implemented in mission mode, he said 28.5 lakh hectares will be brought under irrigation under this Scheme. He also underlined that the implementation of 89 irrigation projects under AIBP, which have been languishing will be fast tracked.
The Finance Minister announced creation of a dedicated Long Term Irrigation Fund in NABARD with an initial corpus of about Rs. 20,000 crore. To achieve all these, a total provision of Rs. 12,517 crore has been made through budgetary support and market borrowings in 2016-17. He also said, simultaneously a major programme for sustainable management of ground water resources has been prepared with an estimated cost of Rs. 6,000 crore and proposed for multilateral funding. The Minister said at least 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up by making use of allocations under MGNREGA.
Sh. Jaitley said the Soil Health Card Scheme will cover all 14 crore farm holdings by March 2017. He said 2,000 model retail outlets of fertilizer companies will be provided with soil and seed testing facilities during the next three years.
The Finance Minister announced that the allocation under Pradhan Mantri Gram Sadak Yojana has been increased to Rs. 19,000 crore and it will connect remaining 65,000 eligible habitations by 2019.
In the budget special focus has been given to ensure adequate and timely flow of credit to the farmers. Against the target of Rs. 8.5 lakh crore in 2015-16, the target for agricultural credit in 2016-17 will be an all-time high of Rs. 9 lakh crore. To reduce the burden of loan repayment on farmers, a provision of Rs. 15,000 crore has been made in the BE 2016-17 towards interest subvention.
The Finance Minister informed that for effective implementation of Prime Minister Fasal Bima Yojana, Rs. 5,500 crore have been provided in the Budget 2016-17. He said to make dairying more remunerative to the farmers, four new projects will be taken up: First the ‘Pashudhan Sanjivani’, an animal wellness programme and provision of Animal Health Cards (‘Nakul Swasthya Patra’); Second , an Advanced breeding technology; Third, Creation of ‘E-Pashudhan Haat’, an e market portal for connecting breeders and farmers; and Fourth, a National Genomic Centre for indigenous breeds. These projects will be implemented at a cost of Rs. 850 crores over the next few years.
Regarding rural sector, Sh. Jaitley announced that a sum of Rs. 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities. It will translate to an average assistance of over Rs. 80 lakh per Gram Panchayat and over Rs. 21 crore per Urban Local Body.
Sh. Jaitley said every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission. He announced allocation of Rs. 38,500 crore for MGNREGS. He said 300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission. He declared that the Government is committed to 100% village electrification by 1st May, 2018. Regarding Swachh Bharat Mission, Sh. Jaitley said Rs. 9,000 crore has been provided for it. He said a new Digital Literacy Mission Scheme for rural India will cover around 6 crore additional households within the next 3 years. In order to develop governance capabilities of Panchayati Raj Institutions on the Sustainable Development Goals, the Minister announced a new scheme namely ‘Rashtriya Gram Swaraj Abhiyan”, for which Rs. 655 crore is being set apart. For rural development as a whole, Rs. 87,765 crore have been allocated.
The Finance Minister announced a massive mission to provide LPG connection in the name of women members of poor households for which Rs. 2000 crore have been earmarked. This will benefit about 1 crore 50 lakh households below the poverty line in 2016-17. The Scheme will be continued for at least two more years to cover a total of 5 crore BPL households.
Sh. Jaitley also announced a new health protection scheme which will provide health cover up to Rs. One lakh per family for economically weak families. For senior citizens of age 60 years and above belonging to this category, an additional top-up package up to Rs. 30,000 will be provided. In order to make quality medicines available at affordable prices, 3000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17. He said that a ‘National Dialysis Services Programme’ will be started to provide dialysis services in all district hospitals.
In the area of education, the Finance Minister said allocation under Sarva Shiksha Abhiyan will be increased. 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years. In order to empower Higher Educational Institutions to help them become world class teaching and research institutions, an enabling regulatory architecture will be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions. The Finance Minister said that the Government has decided to set up a Higher Education Financing Agency (HEFA) with initial capital base of Rs. 1,000 crore.
The Finance Minister while laying emphasis on skill development said the Government wants to bring entrepreneurship to the doorsteps of youth through Pradhan Mantri Kaushal Vikas Yojana (PMKVY). 1500 Multi Skill Training Institutes will be set up for which Rs. 1700 crore have been set aside.
Shri Jaitley said that in order to incentivize creation of new jobs in the formal sector, the Government will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. This will incentivize the employers to recruit unemployed persons and also to bring into the books the informal employees.
The Finance Minister laid special emphasis on Infrastructure and Investment. He said the process of road construction has speeded up. An allocation of Rs. 55,000 crore in the Budget for Roads and Highways has been proposed which will be further topped up by additional Rs. 15,000 crore to be raised by NHAI through bonds. The total investment in the road sector including PMGSY allocation would be 97,000 crore during 2016-17. He said together with the capital expenditure of the Railways, the total outlay on roads and railways will be Rs. 2,18,000 crore. He said 10,000 kms. of National Highways are expected to be approved in 2016-17. He further said abolition of permit-raj will be the medium term goal. The Government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment. Shri Jaitley said, an enabling eco-system will be provided for the States which will have the choice of adopting the new legal framework.
In the port sector, the Finance Minister said the Sagarmala Project has already been rolled out. The Government is planning to develop new greenfield ports. The work on National Waterways is also being expedited. He said Rs. 800 crore has been provided for these initiatives.
In the Civil Aviation Sector action plan is being drawn up to revive unserved and underserved airports. There are about 160 airports and air strips with the State Governments which can be revived at an indicative cost of Rs. 50 crore to Rs. 100 Crore each.
In the power sector, he said the Government is drawing up a comprehensive plan, spanning next 15 to 20 years to augment the investment in nuclear power generation.
To augment infrastructure spending further, the Government will permit mobilization of additional finances to the extent of Rs. 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority through raising of Bonds.
The Minister announced reforms in FDI Policy in the areas of Insurance and Pension, Asset Reconstruction Companies, Stock Exchanges etc. He said 100% FDI will be allowed through FIPB route in marketing of food products produced and manufactured in India. The Minister said a new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale has been approved.
Shri Jaitley announced a number of financial sector reforms. A comprehensive Code on Resolution of Financial Firms will be introduced as a Bill in the Parliament during 2016-17. He said the RBI Act 1934 is being amended to provide statutory basis for a Monetary Policy Framework and a Monetary Policy Committee through the Finance Bill 2016. A Financial Data Management Centre will also be set up.
Expressing concern over problem of stressed assets in Public Sector Banks, the Minister said several steps have been taken in this regard. He said to support the banks, an allocation of Rs. 25,000 crore is being proposed towards recapitalization of Public Sector Banks.
Stating that the Government is giving unparalleled emphasis to good governance, Shri Jaitley said a task force has been constituted for rationalization of human resources in various Ministries. He added a comprehensive review and rationalization of autonomous bodies is also underway. The Minister said a bill will be introduced for Targeted Delivery of Financial and Other Subsidies Benefits and Services by using the Aadhar framework. He said it is proposed to introduce DBT on pilot basis for fertilizer in a few districts across the country. The Minister said automation facilities will be provided in 3 lakh Fair Price Shops by March 2017.
Shri Jaitley announced that “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism.
On the fiscal situation in the country the Minister said the prudence lies in adhering to the fiscal targets. Consequently, he said, the fiscal deficit in RE 2015-16 and BE 2016-17 have been retained at 3.9% and 3.5% of GDP respectively. He added a redeeming feature of this year’s Budget is that the Revenue Deficit target has been improved upon from 2.8% to 2.5% of GDP in RE 2015-16.
The total expenditure in the Budget for 2016-17 has been projected at Rs. 19.78 lakh crore, consisting of Rs. 5.50 lakh crore under Plan and Rs. 14.28 lakh crore under Non-Plan.
Corpus of Rs. 900 crores for Price Stabilisation Fund
The Price Stabilisation Fund has been provided with a corpus of Rs.900 crore to supportS market interventions. While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that monitoring of prices of essential commodities is a key element of good governance. A number of measures have been taken to deal with problem of abrupt increase in prices of pulses. Government has approved creation of buffer stock of pulses through procurement at Minimum Support Price and at market price through Price Stabilisation Fund.
Government to Double the Income of Farmers by 2022
Unified Agricultural Marketing E-Platform to be Dedicated to the Nation on 14th April this Year
Unified Agricultural Marketing E-Platform to be Dedicated to the Nation on 14th April this Year
The Union Finance Minister, Shri Arun Jaitley while presenting the General Budget today said that his Government intends to go beyond Food Security and give back a sense of income security to our farmers. In this regard, his Government intends to double the farmers’ income by 2022. He allotted Rs. 35,984 crore for agriculture and farmers’ welfare. He said that his government intends to address issues of optimal utilization of water resources, create new infrastructure for irrigation, conserve soil fertility with balanced use of fertilizer and provide connectivity from farm to market.
Shri Arun Jaitley said that out of 141 million hectares of net cultivated area only about 65 million hectares are irrigated. In this regard, he announced ‘Pradhan Mantri Sinchai Yojana’, to be implemented in a mission mode to bring another 28.5 lakh hectares under irrigation. He said that 89 projects under AIBP will be fast tracked which will help to irrigate another 80.6 lakh hectare. He promised to complete 23 of these projects before 31st March, 2017. These projects require Rs.17,000 crores next year and Rs. 86,500 crore in the next five years.
The Union Finance Minister, Shri Jaitley announced to create a dedicated Long Term Irrigation Fund in NABARD with an initial corpus of Rs. 20,000 crore. A similar progrmme for sustainable management of ground water resources, with an estimated cost of Rs.6,000 crores has been proposed for multilateral funding. He also said that allocations under MGNREGA will be used for creating atleast 5 lakh farm pond and dug wells in rain fed areas and 10 lakh compost pits for organic manure production.
Shri Jaitley has set the target for Soil Health Card Scheme coverage to 14 crore farm holdings by March, 2017. This will help farmers to make judicious use of fertilizer. He said that 2000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities in the next 3 years. He announced a policy to convert city waste to compose under Swachh Bharat Abhiyan. Fertilizer Companies will co-market these compost .
The Union Finance Minister Shri Jaitley announced ‘Parmparagat Krishi Vikas Yojana’ for bringing 5 lakh acres of rain fed areas under organic farming. He launched a scheme ‘Organic value chain development in North East Region’ to make their organic produce find domestic and export markets. Number of pulses districts under National Food Security Mission has been increased to 622.
Shri Jaitley announced that a Unified Agricultural Marketing E Platform will be dedicated to the Nation, on the birthday of Dr. Baba Saheb Ambedkar on 14th April, this year. He also said that, the completion target of ‘Pradhan Mantri Gram Sadak Yojana’ will be advanced from 2021 to 2019, to connect the remaining 65,000 eligible habitations.
The Union Finance Minister, Shri Jaitley announced 3 specific initiatives to ensure MSP reaches to all the farmers. First, the remaining State will be encouraged to take-up decentralized procurement. Second, an online Procurement System will be undertaken through the Food Corporation of India. Third, effective arrangements will be made for pulses procurement.
The Union Finance Minister, Shri Jaitley announced that four new initiatives to make dairying more remunerative to the farmers. First, ‘Pashudhan Sanjivani’, an animal wellness programme and provision of Animal Heaalth Cards (‘Nakul Swasthya Patra’). Second, an advanced breeding technology. Third, Creation of E-Pashudhan Haat, an e market portal for connecting breeders and farmers. Fourth, a National Genomic Centre for indigenous breeds. He said that these projects will be implemented at a cost of Rs. 850 crore over the next few years.
The Union Finance Minister, Shri Jaitley announced an allocation of Rs. 2.87 lakh crore as Grants in Aid to Gram Panchayats and Municipalities (228% increase compared to previous five years) as per the recommendations of 14th Finance Commission. He said that every block in the areas of drought and rural distress will be taken up under ‘Deen Dayal Antyodaya Mission’. These districts would also be taken up for priority under ‘Pradhan Mantri Krishi Sinchai Yojana’.
Shri Jaitley announced that 300 Rurban Clusters will be developed under the ‘Shyama Prasad Mukherjee Rurban Mission’ to incubate growth centre in rural areas by providing infrastructure amenities and market access for the farmers. He committed to achieve 100 percent village electrification by 1st May, 2018. He proposed to make priority allocation from centrally sponsored scheme, to reward villages that have become free from open defecation.
In order to spread digital literacy in Rural India, the Union Finance Minister, Shri Jaitley has approved 2 new Schemes viz. ‘National Digital Literacy Mission’ and ‘Digital Saksharta Abhiyan’ (DISHA). He proposed to launch a new Digital Literacy Mission Scheme to cover around 6 crore additional households has been revamped under Digital India initiative and will be implemented as a Central Sector Scheme with effect from 1st April, 2016. This will be critical for dispute free titles. He proposed a new structure scheme, ‘Rashtriya Gram Swaraj Abhiyan’ to help Panchayat Raj Institutions deliver Sustainable Development Goals.
Limit of Deduction of Rent Increased from Rs.24,000 to Rs.60,000
100% Deduction of Profits for 3 out of 5 Years for Start-Ups withdrawal upto 40% of the Corpus to be Tax-Free at the time of Retirement
100% Deduction of Profits for 3 out of 5 Years for Start-Ups withdrawal upto 40% of the Corpus to be Tax-Free at the time of Retirement
Deduction of Additional Interest of Rs.50,000 Per Annum for First-Time Home buyers
New Dispute Resolution Scheme to be Introduced
Thirteen Cesses Levied by Various Ministries having Revenue Collection less than Rs.50 Crore to be Abolished
‘E-Sahyog’ and ‘E-Assessment’ to be Expanded Further
100% Deductions for Profits to an undertaking in Housing Project for Flats up to 30 Sq. Mtrs.
The Union Finance Minister Shri Arun Jaitley said that taxation is a major tool available to government for removing poverty and inequality from the society. He enlisted 09 categories of thrust in his text proposals which include (1) Relief to small tax payers (2) Measures to boost growth and employment generation (3) Incentivizing domestic value addition to help Make in India (4) Measures for moving towards a pensioned society (5) Measures for promoting affordable housing (6) Additional resource mobilization for agriculture, rural economy and clean environment (7) Reducing litigation and providing certainty in taxation (8) Simplification and rationalization of taxation (9) Use of technology for creating accountability.
Announcing relief to small tax payers Shri Jaitley proposed to raise the ceiling of tax rebate U/s. 87A from Rs.2000 to Rs.5000. With this, individuals having income up to Rs.5 lakh will get a relief of Rs.3000 in their tax liability. He also proposed to increase the limit of deduction of rent paid U/s.80 GG from Rs.24,000 per annum to Rs.60,000 to provide relief to those who live in rented houses. Shri Jaitley proposed to increase the turnover limit under presumptive taxation scheme U/s.44 AD of the Income Tax Act to Rs.2 Crores from existing limit of Rs.1 Crore which will benefit more than 30 lakh small business people. He also proposed to extend the presumptive taxation scheme with profit deemed to be 50%, to professionals with gross receipts up to Rs.50 lakh.
Announcing the measures to boost growth and employment generation Shri Arun Jaitley said that the accelerated depreciation provided under IT Act will be limited to maximum 40% from 1st April 2017. The benefit of deductions for research would be limited to 150% from 1st April 2017 and 100% from 1st April 2020. The benefit of Section 10-AA to new SEZ units will be available to those units which commence activity before 31st March 2020. The weighted deduction U/s.35-CCD for skill development will continue up to 1st April 2020, Shri Jaitley said.
Announcing Corporate Tax proposals Shri Arun Jaitley said that new manufacturing companies incorporated on or after 1st March 2016 will be given an option to be taxed at 25% + Surcharge and Cess provided they do not claim profit- linked or investment-linked deductions and do not avail of investment allowance and accelerated depreciation. He further proposed to lower the Corporate Tax rate for the next financial year for relatively small enterprises i.e., companies with turnover not exceeding Rs.5 crore (in the financial year ending March 15), to 29% +Surcharge and Cess.
Recognizing the importance of start-ups in employment generation and as key partners in Make in India programme, Shri Jaitley proposed 100% deduction of profits for three out of five years for start-ups set up during April 2016 to March 2019 entailing MAT liability. He also proposed 10 per cent rate of tax on income from worldwide exploitation of patents, developed and registered in India by a resident. In order to get more investment in Asset Reconstruction Companies (ARCs) he proposed complete pass through of Income Tax to securitization trusts including trusts of ARCs. Securitization Trusts will be liable to deduct tax at source. Period for getting benefit of long term Capital Gain regime in case of unlisted companies will be reduced from 3 to 2 years. Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts. Shri Jaitley said that determination of residency of foreign company on the basis of place of effective management (POEM) will be deferred by one year and reiterated commitment to implement General Anti Avoidance Rules (GAARs). He further proposed exemption of Service Tax on services provided under Deen Dayal Upadhyay Gramin Kaushalya Yojana and services provided by assessing bodies empanelled by Ministry of Skill Development and Entrepreneurship. He also announced exemption of Service Tax on general insurance services provided under Niramaya Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability. Shri Jaitley also announced reduction of basic custom and excise duty on refrigerated containers to 5% and 6% respectively.
To promote Make in India campaign of the Government Shri Arun Jaitley proposed changes in Customs and Excise Duty rates on certain inputs to reduce costs and improve competitiveness of domestic industry in sectors like Information Technology Hardware,
Capital Goods, Defence Production, Textiles, Mineral Fuels and Mineral Oils, Chemicals and Petrochemicals, Paper, Paperboard and Newsprint, Maintenance Repair and Overhauling (MRO) of aircraft and ship repair.
Announcing measures for pensioners Shri Arun Jaitley said that withdrawal up to 40% of the corpus at the time of retirement will be tax exempt in the case of National Pension Scheme (NPS). Annuity Fund which goes to legal heir will not be taxable. In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1st April 2016. Shri Jaitley also proposed limit for contribution of employer in recognized provident and superannuation fund of Rs.1.5 lakh per annum for taking tax benefit. Exemption from Service Tax for annuity services provided by NPS and services provided by EPFO to employees will be given. He also announced reduction of Service Tax on single premium annuity (Insurance Policies) from 3.5% to 1.4% of the premium paid in certain cases.
To address the housing needs of all and more specifically the poor, in a time-bound manner, Shri Arun Jaitley announced 100% deduction for profits to an undertaking in housing project for flats up to 30 sq mtrs. in four metro cities and 60 sq. mtrs. in other cities, approved during June 2016 to March 2019 and completed in three years. However, Minimum Alternate Tax (MAT) will be applicable. The Finance Minister announced deduction for additional interests of Rs.50,000 per annum for loans up to Rs.35 lakh sanctioned in 2016-17 for first time home buyers, where house costs does not exceed Rs.50 lakh. He also proposed that distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax (DDT), in respect of dividend distributed after the specified date. Shri Jaitley also proposed to exempt Service Tax on construction of affordable housing up to 60 sq. mtrs. under any scheme of the Central or State Government including PPP Schemes. He also proposed Excise Duty exemption presently available to concrete mix manufactured at site for use in construction work to ready-mix concrete.
Announcing resource mobilization measures for agriculture, rural economy and clean environment Shri Jaitley said that additional tax @ 10% of gross amount of dividend will be payable by the recipients receiving dividends in excess of Rs.10 lakh per annum. Surcharge will be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above Rs.1 Crore, he said. Shri Jaitley said that tax will be deducted at source @ 1% on purchase of luxury cars exceeding value of Rs.10 lakh and purchase of goods and services in cash exceeding Rs.2 lakh. He proposed to increase security transaction tax in case of ‘Options’ from 0.017 to 0.05 per cent. Equalization levy of 6% of gross amount for payment made to non-residents exceeding Rs.1 lakh a year in case of B2B transactions was also proposed. He further proposed Krishi Kalyan Cess @ 0.5% on all taxable services w.e.f. 1st June 2016. Proceeds from this would be exclusively used for financing initiatives for improvement of agriculture and welfare of farmers, he said.
Expressing concern over pollution and traffic situation in Indian cities, Shri Jaitley proposed an Infrastructure Cess of 1% of small petrol, LPG, CNG cars; 2.5% on Diesel Cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. No credit of this Cess will be available nor credit of any other tax or duty be utilized for paying the Cess, he said. Shri Jaitley also proposed levy of Excise Duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery (excluding silver jewellery, other than studded with diamonds and some other precious stones), with a higher exemption
and eligibility limits of Rs.6 Crore and 12 Crore respectively. The Finance Minister further proposed to raise Excise Duty on ready-made garments with retail price of Rs.1,000 or more to 2% without input tax credit or 12.5% with input tax credit. He also proposed to increase Clean Environment Cess on coal, lignite and peat from Rs.200 per tonne to Rs.400 per tonne. Excise Duty on various tobacco products other than bidi was also proposed to be raised by about 10 to 15%. Proposing amendment to Finance Act 1994 he said that assignment of right to use the spectrum and its subsequent transfers will be a service leviable to Service Tax and not sale of intangible tax.
Highlighting Government’s priority towards a lower tax regime with non-litigious approach the Finance Minister desired to give an opportunity to the earlier non-compliant to move to the category of compliant. He reiterated government’s commitment to provide a stable and predictable taxation regime and reduce black money. Shri Arun Jaitley announced that domestic tax payers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Such declarants will have immunity from prosecution. He said that Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan Surcharge to be used for agriculture and rural economy. Announcing New Dispute Resolution Scheme he said that no penalty will be charged in respect of cases with disputed tax up to Rs.10 lakh. Cases with disputed tax exceeding Rs.10 lakh will be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition, he said. Shri Jaitley announced a High Level Committee chaired by Revenue Secretary to oversee fresh cases where Assessing Officer applied the retrospective amendment. In case of mis-reporting of facts, the Finance Minister proposed penalty rates of 200% of tax and 50% penalty in case of under-reporting of income. He said this allowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under Rule –AD of Section -14A of Income Tax Act. There will be a time limit of one year for disposing petitions of the tax-payers seeking waiver of interest and penalty. It will be mandatory for the Assessing Officer to grant stay of demand once the assessee pays 15% of the disputed demand while the appeal is pending before Commissioner of Income Tax (Appeals). Shri Jaitley said that the monetary limit for deciding an appeal by a single member Bench of ITAT will be enhanced from Rs.15 lakh to Rs.50 lakh. He also announced creation of 11 new Benches of Customs, Excise and Service Tax, Appellate Tribunal (CESTAT) to remove backlog of cases.
Stressing on simplification and rationalization of taxation the Finance Minister said that 13 cesses, levied by various Ministries in which revenue collection is less than Rs.50 Crore, will be abolished. For non residents providing alternative documents to PAN Card will be allowed and TDS provisions for Income Tax will be rationalized. Facility for revision of return will also be extended to Central Excise Assesses. With respect to non-taxable services for reversal of input tax credits, additional options to banking companies and financial institutions, including NBFCs will be provided. Exporters and importers with proven track record will be extended the facility for deferred payment of customs duties. At major ports and airports starting from next financial year customs single window project will be implemented. Shri Jaitley also announced increase in free baggage allowance for international passengers. Filing of baggage declaration will be required only for those carrying dutiable goods.
Emphasizing use of technology in taxation department in a big way to make life simpler for a law-abiding citizen. Shri Arun Jaitley announced expansion in the scope of e-Assessment to all assesses in seven mega cities in the coming years. Interest @ 9% per annum against normal rate of 6% per annum for delay in giving effect to Appellate Order beyond 90 days will be chargeable. To reduce compliance cost especially for small tax payers ‘e-Sahyog’ will be expanded, he said. Shri Jaitley said that direct tax proposals would result in revenue loss of Rs.1060 Crore and indirect proposals are expected to yield Rs.20670 Crore which means a revenue gain of Rs.19610 Crore. The Finance Minister said that government have a desire to provide socio-economic security to every Indian, especially the farmers, the poor and the vulnerable; a dreamto see a more prosperous India; and a vision to ‘Transform India’.
A New Health Protection Scheme to provide health cover up to Rs.1 lakh per family announced
National Dialysis Services Programme to be launched
3000 Stores to be opened under Prime Minister’s Jan Aushadhi Yojana during 2016-17
National Dialysis Services Programme to be launched
3000 Stores to be opened under Prime Minister’s Jan Aushadhi Yojana during 2016-17
The Minister for Finance and Corporate Affairs and Information and Broadcasitng, Shri Arun Jaitley has announced a New Health Protection Scheme in the Budget 2016-17. In his Budget address in the Parliament today, the Finance Minister expressed concern that a serious illness of family member(s) causes severe stress on the financial condition of poor and economically weak families, shaking the foundation of their economic security. In order to help such families, the Government will launch a new health protection scheme which will provide health cover up-to rupees one lakh per family, the Finance Minister said. For Senior citizens of the age 60 years and above belonging to this category, an additional top-up package up to Rs.30,000 will be provided.
The Finance Minister Shri Jaitley stated that making quality medicines available at affordable prices has been a key challenge. “We will reinvigorate the supply of generic drugs. 3,000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17”, the Minister added.
About 2.2 lakh new patients of End Stage Renal Disease get added in India every year resulting in additional demand for 3.4 Crore dialysis sessions. With approximately 4,950 dialysis centres in India, largely in the private sector and concentrated in the major towns, the demand is only half met. Every dialysis session costs about Rs.2,000 – an annual expenditure of more than Rs. 3 lakh. Besides, most families have to undertake frequent trips, often over long distances, to access dialysis services, incurring heavy travel costs and loss of wages.
To address this situation, Shri Arun Jaitley proposed to start a ‘National Dialysis Services Programme’. Funds will be made available through PPP Mode under the National Health Mission, to provide dialysis services in all district hospitals. To reduce the cost, the Finance Minister proposed to exempt certain parts of dialysis equipment from basic customs duty, excise/CVD and SAD.
The Finance Minister Shri Jaitley stated that making quality medicines available at affordable prices has been a key challenge. “We will reinvigorate the supply of generic drugs. 3,000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17”, the Minister added.
About 2.2 lakh new patients of End Stage Renal Disease get added in India every year resulting in additional demand for 3.4 Crore dialysis sessions. With approximately 4,950 dialysis centres in India, largely in the private sector and concentrated in the major towns, the demand is only half met. Every dialysis session costs about Rs.2,000 – an annual expenditure of more than Rs. 3 lakh. Besides, most families have to undertake frequent trips, often over long distances, to access dialysis services, incurring heavy travel costs and loss of wages.
To address this situation, Shri Arun Jaitley proposed to start a ‘National Dialysis Services Programme’. Funds will be made available through PPP Mode under the National Health Mission, to provide dialysis services in all district hospitals. To reduce the cost, the Finance Minister proposed to exempt certain parts of dialysis equipment from basic customs duty, excise/CVD and SAD.
Reforms in FDI Policy in the Areas of Insurance and Pensions, Asset Reconstruction Companies, Stock Exchanges
100% FDI to be Allowed Through FIPB Route in Marketing Food Products Produced and Manufactured in India
100% FDI to be Allowed Through FIPB Route in Marketing Food Products Produced and Manufactured in India
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that to promote private participation in infrastructure projects, Public Utility (Resolution of Disputes) Bill will be introduced; and guidelines for renegotiation of PPP agreements will be issued, without compromising transparency. New credit rating system for infrastructure projects will also be introduced. Announcing changes in FDI Policy, Shri Jaitley said that reforms in FDI policy in areas of insurance and pensions, asset reconstruction companies and stock exchanges have been proposed. 100% FDI is to be allowed through FIPB route in marking of food products produced and manufactured in India. This will benefit farmers, give impetus to food processing industry and create vast employment opportunities.
He further said that guidelines for strategic disinvestment have been approved and will be spelt out. Individual units of CPSEs can be disinvested to raise resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their assts value for making investment in new projects. The NITI Aayog will identify the CPSEs for strategic sale, he said.
He further said that guidelines for strategic disinvestment have been approved and will be spelt out. Individual units of CPSEs can be disinvested to raise resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their assts value for making investment in new projects. The NITI Aayog will identify the CPSEs for strategic sale, he said.
Finance Minister announces Rs. 2000 crore in the Budget to give LPG Connection to women member of poor households; Scheme to benefit 1.5 crore households below poverty line in the current year
Finance Minister expresses gratitude and appreciation for those households who voluntarily gave up cooking gas subsidy
Finance Minister expresses gratitude and appreciation for those households who voluntarily gave up cooking gas subsidy
National Scheduled Caste and Scheduled Tribe Hub to be set-up to provide support to SC/ST entrepreneurs Stand Up India Scheme to benefit 2.5 lakh SC/ST and Women entrepreneurs
The Union Budget for the Financial Year 2016-17 contains several new measures for the Social Sector. Highlighting these measures in his Budget Speech in the Parliament here today, the Minister for Finance and Corporate Affairs and Information and Broadcasitng, Shri Arun Jaitley said that the Government has “decided to embark on a massive mission to provide LPG connection in the name of women members of poor households”. A sum of Rs.2,000 crore has been set aside in this year’s Budget to meet the initial cost of providing these LPG connections, the Finance Minister explained.
The Finance Minister Shri Jaitley said this will benefit about 1.5 Crore households below the poverty line in 2016-17. The scheme will be continued for at least two more years to cover a total of 5 crore BPL households. This will ensure universal coverage of cooking gas in the country, the Minister added. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas, he said.
The Finance Minister expressed his gratitude and appreciation for the 75 lakh middle class and lower middle class households who have voluntarily given-up their cooking gas subsidy, in response to the call given by the Hon’ble Prime Minister, Shri Narendra Modi. In an another important announcement, Shri Arun Jaitley said that it is proposed to constitute a National Scheduled Caste and Scheduled Tribe Hub in the MSME Ministry in partnership with industry associations. This Hub will provide professional support to Scheduled Caste and Scheduled Tribe entrepreneurs to fulfil the obligations under the Central Government Procurement Policy 2012, adopt global best practices and leverage the Stand Up India initiative.
The Finance Minster also announced the approval given by the Union Cabinet to the “Stand Up India Scheme” to promote entrepreneurship among SC/ST and women. Rs.500 Crore has been provided for this purpose. The Scheme will facilitate at least two such projects per bank branch, one for each category of entrepreneur. This will benefit at least 2.5 lakh entrepreneurs, the Minister elaborated. (pg10/para56)
Shri Jaitley said the schemes for welfare and skill development for Minorities such as Multi-Sectoral Development Programme and USTAAD shall be implemented effectively.
Promoting a tax-friendly regime through a new ‘Dispute Resolution Scheme’
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that litigation is a scourge for tax friendly regime and creates an environment of distrust. Litigation also leads to increasing the compliance cost of the tax payers and administrative cost for the Government. There are 3 lakh tax cases pending with the 1st Appellate Authority with disputed amount being 5.5 lakh crores. In order to reduce this number new dispute Resolution Scheme (DRS) is launched. Following are highlights of dispute resolution scheme:
• A taxpayer who has an appeal pending as of today before the Commissioner (Appeals) can settle his case by paying the disputed tax and interest up to the date of assessment.
• No penalty in respect of Income-tax cases with disputed tax up to Rs. 10 lakh will be levied.
• Cases with disputed tax exceeding Rs. 10 lakhs will be subjected to only 25% of the minimum of the imposable penalty for both direct and indirect taxes.
• Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty.
• Certain categories of persons including those who are charged with criminal offences under specific Acts are proposed to be barred from availing this scheme.
With special reference to Government’s assurance of not to create retrospectively of fresh tax liability, Union Finance Minister Shri Arun Jaitley reiterated this commitment to provide a stable and predictable taxation regime. He proposed one-time scheme of Dispute Resolution for past cases ongoing under retrospective amendment. One can settle the case by paying only the tax arrears in which case liability of the interest and penalty shall be waived. This is subject to agreeing to withdraw any pending case lying in any Court or Tribunal or any proceeding for arbitration, mediation etc. under BIPA.
Identifying that levy of heavy penalty as a cause of large number of disputes, Shri Jaitley proposed to modify the scheme of penalty by providing different categories of misdemeanor with graded penalty and thereby substantially reducing the discretionary power of the tax officers. The penalty rates will now be 50% of tax in case of underreporting of income and 200% of the tax where there is misreporting of facts. Remission of penalty is also proposed where taxes are paid and appeal is not filed.
Quantification of disallowance of expenditure relatable to exempt income in terms of Section 14A of the Income Tax Act is another issue led to number of disputes. Hence, it has been proposed to rationalize formula in Rule 8D governing such quantification.
• A taxpayer who has an appeal pending as of today before the Commissioner (Appeals) can settle his case by paying the disputed tax and interest up to the date of assessment.
• No penalty in respect of Income-tax cases with disputed tax up to Rs. 10 lakh will be levied.
• Cases with disputed tax exceeding Rs. 10 lakhs will be subjected to only 25% of the minimum of the imposable penalty for both direct and indirect taxes.
• Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty.
• Certain categories of persons including those who are charged with criminal offences under specific Acts are proposed to be barred from availing this scheme.
With special reference to Government’s assurance of not to create retrospectively of fresh tax liability, Union Finance Minister Shri Arun Jaitley reiterated this commitment to provide a stable and predictable taxation regime. He proposed one-time scheme of Dispute Resolution for past cases ongoing under retrospective amendment. One can settle the case by paying only the tax arrears in which case liability of the interest and penalty shall be waived. This is subject to agreeing to withdraw any pending case lying in any Court or Tribunal or any proceeding for arbitration, mediation etc. under BIPA.
Identifying that levy of heavy penalty as a cause of large number of disputes, Shri Jaitley proposed to modify the scheme of penalty by providing different categories of misdemeanor with graded penalty and thereby substantially reducing the discretionary power of the tax officers. The penalty rates will now be 50% of tax in case of underreporting of income and 200% of the tax where there is misreporting of facts. Remission of penalty is also proposed where taxes are paid and appeal is not filed.
Quantification of disallowance of expenditure relatable to exempt income in terms of Section 14A of the Income Tax Act is another issue led to number of disputes. Hence, it has been proposed to rationalize formula in Rule 8D governing such quantification.
Reducing black money through a Scheme to declare undisclosed income by paying 45% tax in a given compliance window.
While presenting the General Budget 2016-17 in Lok Sabha here today, the Union Finance Minister Shri Arun Jaitley proposed a Scheme to declare undisclosed income by paying 45% tax in a given compliance window.
Shri Jaitley proposed a limited period Compliance window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions. This will include paying tax at 30% and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Regarding income declared in these declarations, there will be no scrutiny or enquiry under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions.
The surcharge levied at 7.5% of undisclosed income will be called ‘Krishi Kalyan surcharge’ which will be used for agriculture and rural economy. Government of India plan to open the window under this Income Disclosure Scheme from 1st June to 30th September, 2016 with an option to pay amount due within two months of declaration.
Shri Jaitley today reiterated Government of India’s commitment to remove black money from the economy. He also suggested that as this one opportunity for evaded income to be declared once is given, government will be further focusing on bringing people with black money to books.
Shri Jaitley proposed a limited period Compliance window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions. This will include paying tax at 30% and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Regarding income declared in these declarations, there will be no scrutiny or enquiry under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions.
The surcharge levied at 7.5% of undisclosed income will be called ‘Krishi Kalyan surcharge’ which will be used for agriculture and rural economy. Government of India plan to open the window under this Income Disclosure Scheme from 1st June to 30th September, 2016 with an option to pay amount due within two months of declaration.
Shri Jaitley today reiterated Government of India’s commitment to remove black money from the economy. He also suggested that as this one opportunity for evaded income to be declared once is given, government will be further focusing on bringing people with black money to books.
Increase of 15.3 percent in the Plan Expenditure over the current Financial Year
The total expenditure in the General Budget for 2016-17 has been projected at Rs.19.78 lakh crore, consisting of Rs.5.50 lakh crore under Plan and Rs.14.28 lakh crore under Non-Plan. The increase in Plan expenditure is in the order of 15.3% over current year BE. While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that Plan Allocations have given special emphasis to sectors like agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure, etc.
Simplification and Rationalization of Taxation
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that the Government has already accepted many recommendations of Tax Administration Reform Committee. He further proposed to accept a number of recommendations of Justice Easwar Committee in Budget 2016-17.
In order to reduce multiplicity of taxes, associated cascading and to reduce cost of collection, abolition 13 cesses, levied by various Ministries in which revenue collection is less than Rs.50 crore in a year, is proposed.
Measures to rationalize TDS provisions for Income Tax have been proposed to improve cash flow position of small tax payers who get their funds blocked due to current TDS provisions. Also, Non-residents without PAN are currently subjected to a higher rate of TDS, however with amendment to relevant provision will allow that on furnishing of alternative documents, such higher rate will not apply. The facility for revision of return hitherto available to service tax assesses only will be extended to Central Excise assesses also.
Additional options for reversal of input tax credits with respect to non-taxable services provided by banking companies and financial institutions, including NBFCs, by way of extending deposits, loans and advances are proposed in Budget 2016-17.
Government of India has taken steps to reduce the cargo release time and transaction costs of EXIM trade. Shri Jaitley also proposed to amend the Customs Act so as to provide for deferred payment of customs duties for importers and exporters with proven track record.
Indian Customs Single Window Project would be implemented at major ports and airports starting from beginning of next financial year. Also, customs baggage for international passengers are simplified as filing of baggage declaration will be required only for those passengers who carry dutiable goods.
In order to reduce multiplicity of taxes, associated cascading and to reduce cost of collection, abolition 13 cesses, levied by various Ministries in which revenue collection is less than Rs.50 crore in a year, is proposed.
Measures to rationalize TDS provisions for Income Tax have been proposed to improve cash flow position of small tax payers who get their funds blocked due to current TDS provisions. Also, Non-residents without PAN are currently subjected to a higher rate of TDS, however with amendment to relevant provision will allow that on furnishing of alternative documents, such higher rate will not apply. The facility for revision of return hitherto available to service tax assesses only will be extended to Central Excise assesses also.
Additional options for reversal of input tax credits with respect to non-taxable services provided by banking companies and financial institutions, including NBFCs, by way of extending deposits, loans and advances are proposed in Budget 2016-17.
Government of India has taken steps to reduce the cargo release time and transaction costs of EXIM trade. Shri Jaitley also proposed to amend the Customs Act so as to provide for deferred payment of customs duties for importers and exporters with proven track record.
Indian Customs Single Window Project would be implemented at major ports and airports starting from beginning of next financial year. Also, customs baggage for international passengers are simplified as filing of baggage declaration will be required only for those passengers who carry dutiable goods.
Comprehensive Code on Resolution of Financial Firms to be Enacted
Allocation of Rs. 25,000 Crore Towards Recapitalisation of PSBS
Target of Amount Sanctioned Under Pradhan Mantri Mudra Yojana is Proposed to be Increased to Rs 1,80,000 Crore
Allocation of Rs. 25,000 Crore Towards Recapitalisation of PSBS
Target of Amount Sanctioned Under Pradhan Mantri Mudra Yojana is Proposed to be Increased to Rs 1,80,000 Crore
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that in the financial sector, a comprehensive Code on Resolution of Financial Firms will be enacted. Together with the Bankruptcy and Insolvency Law, this will fill a major systemic vacuum. This is a major reform measure. Announcing more financial sector reforms, he said new derivative products will be developed by SEBI in the commodity derivatives market. Statutory basis will be provided for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016. A Financial Data Management Centre will also be set up to facilitate integrated data aggregation and analysis in the financial sector.
SARFAESI Act is to be amended to strengthen Asset Reconstruction Companies. This will help in dealing with stressed assets of Banks. In the plan for revamping of Public Sector Banks (PSB), he announced :–
a. allocation of Rs. 25,000 crore towards recapitalisation of PSBs;
b. roadmap to be spelt out for consolidation of PSBs;
c. considering reduction of Government equity in IDBI Bank to 49% of below;
d. Debt Recovery Tribunals (DRTs) to be strengthened with computerized processing of court cases.
Target of amount sanctioned under Pradhan Mantri Mudra Yojana is proposed to increased to Rs 1,80,000 crore. General Insurance Companies will be listed in stock exchanges for improving transparency, accountability and efficiency. Comprehensive Central legislation to deal with Illicit Deposit Taking schemes will be enacted.
To provide better access to financial services, especially in rural areas, the government will undertake a massive nationwide rollout of ATMs and Micro ATMs in Post Offices over the next three years, Shri Jaitley announced.
1500 Multi Skill Training Institutes to be set-up across the country, Rs.1,700 crore provided in the Budget 2016-17
Government to pay EPS contribution of 8.33% for all new employees for first three years of employment; Rs 1,000 crore earmarked in the Budget
100 Model Career Centres to be made operational by end of 2016-17
State Employment Exchanges to be linked with National Career Service Platform
Government to pay EPS contribution of 8.33% for all new employees for first three years of employment; Rs 1,000 crore earmarked in the Budget
100 Model Career Centres to be made operational by end of 2016-17
State Employment Exchanges to be linked with National Career Service Platform
The Government has decided to set-up 1500 Multi Skill Training Institutes across the country for which Rs 1,700 crore has been set aside in the Budget 2016-17. Announcing this in his Budget Speech in the Parliament here today, the Minister of Finance, Corporate Affairs and Information and Broadcasting, Shri Arun Jaitley said that it is the endeavour of the Government to bring entrepreneurship to the doorstep of youth through Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
The Finance Minister said that Skill India Mission seeks to capitalize our demographic advantage. Since its launch, the National Skill Development Mission has created an elaborate skilling eco-system and imparted training to 76 lakh youth. He said that we have decided to set-up a National Board for Skill Development Certification in partnership with the industry and academia .We propose to further scale- up Pradhan Mantri Kaushal Vikas Yojana to skill one crore youth over the next three years, the Minister said.
The Finance Minister Shri Jaitley also stated that Entrepreneurship, Education and training will be provided in 2200 colleges, 300 schools, 500 government ITIs and 50 Vocational Training Centres through Massive Open Online Courses. Aspiring entrepreneurs, particularly those from remote parts of the country, will be connected to mentors and credit markets. (pg12/para66)
In another important announcement, Shri Jaitley said that in order to incentivize creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. The Scheme will be applicable to those with salary up to Rs.15,000 per month and a budget provision of Rs.1000 crore has been made for this.
Further, the Finance Bill, 2016 proposes to broaden and liberalize the scope of the employment generation incentive available under section 80JJAA of the Income Tax Act.
A National Career Service was launched in July, 2015. Already 35 million jobs seekers have registered on this platform. In the new Budget, the Government proposes to make 100 Model Career Centres operational by the end of 2016-17. It also proposes to inter-link State Employment Exchanges with the National Career Service platform.
The Finance Minister said that Skill India Mission seeks to capitalize our demographic advantage. Since its launch, the National Skill Development Mission has created an elaborate skilling eco-system and imparted training to 76 lakh youth. He said that we have decided to set-up a National Board for Skill Development Certification in partnership with the industry and academia .We propose to further scale- up Pradhan Mantri Kaushal Vikas Yojana to skill one crore youth over the next three years, the Minister said.
The Finance Minister Shri Jaitley also stated that Entrepreneurship, Education and training will be provided in 2200 colleges, 300 schools, 500 government ITIs and 50 Vocational Training Centres through Massive Open Online Courses. Aspiring entrepreneurs, particularly those from remote parts of the country, will be connected to mentors and credit markets. (pg12/para66)
In another important announcement, Shri Jaitley said that in order to incentivize creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. The Scheme will be applicable to those with salary up to Rs.15,000 per month and a budget provision of Rs.1000 crore has been made for this.
Further, the Finance Bill, 2016 proposes to broaden and liberalize the scope of the employment generation incentive available under section 80JJAA of the Income Tax Act.
A National Career Service was launched in July, 2015. Already 35 million jobs seekers have registered on this platform. In the new Budget, the Government proposes to make 100 Model Career Centres operational by the end of 2016-17. It also proposes to inter-link State Employment Exchanges with the National Career Service platform.
Initiatives to Ensure Targetted Disbursement of Government Subsidies and Financial Assistance to Actual Beneficiaries
Three specific initiatives have been proposed to achieve the objective of targeted disbursement of Government subsidies and financial assistance to the actual beneficiaries.
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that this is the critical component of minimum government and maximum governance. The three initiatives are:
First, a bill for Targeted Delivery of Financial and other subsidies, benefits and services by using the Aadhar framework. A social security platform will be developed using Aadhar to accurately target beneficiaries.
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Second, Direct Benefit Transfer (DBT) is proposed to be introduced on pilot basis for fertilizer in a few districts across the country.
Third, of the 5.35 lakh Fair Price Shops in the country, automation facilities will be provided in 3 lakh Fair Price Shops by March, 2017.
FM: Tax Proposals are aimed at Boosting Economic Growth and Employment Generation
The Union Finance Minister Shri Arun Jaitley announcing the tax proposals in the Union Budget today said boosting employment generation through economic growth is a main objective behind these proposals. Other objectives, he said, would be for incentivizing ‘Make in India’, to promote measures for moving towards a pensioned society and for promoting affordable housing.
Such provisions to boost economic growth and employment include-100% deduction of profits for 3 out of 5 years for start-ups, during April, 2016 to March 2019, with certain riders. Similarly to promote innovation, a special patent regime with 10% rate of tax on income from worldwide exploitation of patents developed and registered in India was proposed.
Non-banking financial companies shall be eligible for deduction to the extent of 5 % of its income in respect of provision for bad and doubtful debts.
The corporate income tax rate for the next financial year of relatively small enterprises i.e companies with turnover not exceeding Rs. 5 crores (in the financial year ending March 2015) is proposed to be lowered to 29 % plus surcharge and cess. The new manufacturing companies which are incorporated on or after 1.3.2016 are proposed to be given an option to be taxed at 25% plus surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.
Service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development and Entrepreneurship are also proposed to be exempted.
The determination of residency of foreign company on the basis of Place of Effective Management (POEM) is deferred by one year.
To get more investment in Asset Reconstruction Companies (ARCs), which play a very important role in resolution of bad debts, a complete pass through income-tax to securitization trusts including trusts of ARCs has been proposed. The income will be taxed in the hands of the investors instead of the trust.
The Finance Minister also enunciated a plan for phasing-out various exemptions as the corporate tax is proposed to be reduced from 30% to 25 % over a period. Such graduated plan includes
a) The accelerated depreciation provided under IT Act will be limited to maximum 40 % from 1.4.2017.
b) The benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020
c) The benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.
d) The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020.
Other objectives enunciated for his tax proposals are: Additional resource mobilization for agriculture, rural economy and clean environment, use of technology for creating accountability, simplification and rationalization of taxation and reduction in litigation for providing certainty in taxation.
FM: GDP Accelerates to 7.6%; Budget 2016-17 Built on Agenda ‘Transform India’
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that the growth of GDP has accelerated to 7.6% in the current Financial Year. This was possible notwithstanding the contraction of global exports by 4.4% compared to 7.7% growth in the world exports during the last three years of the previous Government. He said that the Global growth has slowed down from 3.4% in 2014 to 3.1% in 2015. Financial markets have been battered and the global trade had contracted. Amidst these global events, the Indian economy held its ground firmly, due to the inherent strengths and policies of the present Government.
The Finance Minister Shri Jaitley said that the IMF has hailed India as a ‘bright spot’, amidst a slowing global economy. The World Economic Forum has commented that India’s growth is ‘extraordinarily high’. He said that it could be achieved inspite of inheriting an economy of low growth, high inflation and zero investor confidence in Government ‘s capability to govern.
The Finance Minister Shri Jaitley further said that CPI inflation which was 9.4% during the last three years of the previous Government had come down to 5.4%. This was accomplished despite monsoon shortfall of 13% for two consecutive years. Calling India’s external situation as robust, Shri Jaitley said that the Current Account Deficit had declined from 18.4 billion US dollars in the first half of last year to 14.4 billion this year, projected to be 1.4% of GDP by the end of this year. India’s foreign exchange reserves are at the highest level of about 350 billion of US dollars.
The Finance Minister affirmed the principle that money with Government belongs to the people and the Government has the sacred responsibility to spend it prudently and wisely for the welfare of people, especially for the poor and the downtrodden. He said that the Plan expenditure at RE stage has been increased in 2015-16 in contrast to the usual practice of reducing it. Shri Jaitley pointed-out three serious implications facing the Indian economy. Firstly, we must strengthen our firewalls against the risks of further global slowdown and turbulence by ensuring macroeconomic stability and prudent fiscal management. Secondly, since foreign markets are weak, we must rely on domestic demand and Indian markets to ensure that India’s growth does not slow down. And thirdly, we must continue with the pace of economic reforms and policy initiatives to change the lives of people for the better.
The Finance Minister said that the Government has also to prioritise its expenditure for the Financial Year 2016-17 on account of the recommendations of 7th Central Pay Commission and the implementation of Defence OROP. Also, the 14the Finance Commission has reduced the Central share of taxes to 58% from 68%. Shri Jaitley said that the government wished to enhance expenditure in the farm and rural sector, the social sector, the infrastructure sector and provide for recapitalisation of banks as these sectors need immediate action.
The Finance Minister Shri Jaitley also said that the Government will undertake three major schemes to help the weaker section of the society. The Pradhan Mantri Fasal Bima Yojana (PMFBY) will help to protect the farmers from the natural disasters. The farmer will pay a nominal amount of insurance premium and get the highest ever compensation the event of any loss suffered. A health insurance scheme which protect about one-third of India’s population against hospitalization expenditure will also be announced. A new initiative to ensure BPL families are provided with cooking gas connection, supported by a Government subsidy, will also be launched.
Shri Jaitley asserted that the priority of the government is to provide additional resources for vulnerable section, rural areas and social and physical infrastructure creation. He said the Government shall also endeavour to continue with the ongoing reforms and ensure passage of Constitutional amendments to enable implementation of GST, passage of Insolvency and Bankruptcy law and other pending reform measures. He also added that the Government shall enact a law to ensure that all benefits given by the government are conferred upon persons who deserve it, by a statutory backing to AADHAR platform. He added, significant reforms like changes in the legislative framework relating to transport sector, incentivizing gas discovery and exploration, enactment of law to deal with resolution of financial firms, legal framework dispute resolution in PPP projects and public utility contracts, important banking sector reforms and public listing of general insurance companies and significant changes in FDI policy are also on Government’s agenda.
Important Announcements made by Union Finance Minister Shri Arun Jaitley in his Budget speech 2016-17
1. Big Focus on Agriculture and Farmer’ Welfare
(i) &nbs p; Farmer’s income to be doubled by 2022.
(ii) &nbs p; 28.5 lakh hectares will be brought under irrigation under Pradhan Mantri Krishi Sinchai Yojana.
(iii) &nbs p; 89 irrigation projects, requiring Rs. 86,500 crore in next five years, to be fast tracked. 23 of these projects to be completed before 31st March, 2017.
(iv) &nbs p; Dedicated Long Term Irrigation Fund will be created in NABARD with initial corpus of Rs. 20,000 crore.
(v) &nbs p; Total outlay on irrigation including market borrowings is R. 12,157 crore.
(vi) &nbs p; Major programme for Sustainable Ground Water management proposed for multilateral funding at a cost of Rs. 6,000 crore.
(vii) 5 lakh farm ponds and dug wells in rain-fed areas and 10 lakh copost pits for production of organic manure will be taken up.
(viii) Soil Health Cards will be given to 14 crore farm holdings by March, 2017.
(ix) &nbs p; 2,000 model retail otlets of fertilizer companies with soil and seed testing facilities, will be opened in the next three years.
(x) &nbs p; Unified Agricultural Marketing E Platform to be dedicated to the Nation on the Birthday of Dr. Ambedkar on 14th April, 2016.
2. Rs. 27,000 crore including State’s share to be spent on PMGSY in 2016-17. Target date of completion of PMGSY advanced from 2021 to 2019.
3. Rs. 9 lakh crore will be given as Agricultural credit in 2016-17.
4. FCI will undertake online procurement of food grains. This will bring transparency and convenience to farmers through prior registration and monitoring of procurement.
5. Pashudhan Sanjeevani, an animal wellness programme, will be undertaken. Nakul Swasthya Patras to be issued.
6. Rural Sector
(i) &nbs p; R. 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municpalities as per the recommendations of the 14th FC. This translates to Rs. 81 lakh per gram panchayat and over Rs. 21 crore per Municipality.
(ii) &nbs p; Every Block in drought and rural distress areas will be taken up under Deen Dayal Antoyodaya Mission.
(iii) &nbs p; 300 Rurban Clusters will incubate growth Centres in Rural Area.
(iv) &nbs p; All villages will be electrified by 1st May, 2018.
(v) &nbs p; A new Digital Literacy Mission scheme will be launched for rural India to cover around 6 crore households in next three years.
(vi) &nbs p; Modernisation of Land Records through revamped National Land Records Programme.
(vii) Rashtriya Gram Swaraj Programme to be launched.
7. Targeted Delivery of Government subsidies and benefits to ensure that they reach the poor and the deserving.
(i) &nbs p; New law fpr targeted delivery of financial and other subsidies etc. using Aadhar framework will be enacted.
(ii) &nbs p; DBT in fertilizer will be launced on pilot basis.
(iii) &nbs p; Of the total 5.35 lakh fair price shops in the country, 3 lakh shops to be automated by March,2017.
8. MUDRA – Loan target of 1,80,000 crore in 2016-17.
9. Social Sector
(i) &nbs p; Massive Mission to provide LPG connection to poor households will be launched. 1.5 crore poor households will benefit in 2016-17. Scheme will continue for two more years to cover a total of 5 crore BPL households. LPG connection to be given in the name of woman member of the family.
(ii) &nbs p; New Health Protection scheme will be launched. Health cover up to Rs. 1 lakh per family and additional Rs. 30,000 for senior citizens to be provided.
(iii) &nbs p; 3000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened in 2016- 17.
(iv) &nbs p; National Dialysis Services Programme will be launched. Tax exemptions given to certain parts of dialysis equipments.
(v) &nbs p; A new Eco System for SC/ST entrepreneurs will be set up. SC/ST Hub to be set up in MSME Ministry.
10. Education
(i) &nbs p; 62 new Navaodaya Vidyalayas to be opened in remaining uncovered districts in next two years.
(ii) &nbs p; An enabling regulatory architecture will be provided to 10 public and 10 private institutions to emerge as world class teaching and research institutions.
(iii) &nbs p; Higher Education Financing Agency will be set up with an initial capital base of Rs. 1,000 crore.
(iv) &nbs p; Digital Depository will be set up for educational certificates, mark-sheets, awards etc.
11. Skills
(i) &nbs p; 1500 Multi Skill Training Institutes will be set up under Pradhan Mantri Kaushal Vikas Yojana
(ii) &nbs p; National Board for Skill Development Certification will be set up in partnership with industry and academia.
(iii) &nbs p; Entrepreneurship education and training will be provided in 2200 colleges, 300 schools, 500 govt. it is and 50 vocational training centres through open online courses.
12. Job Creation
(i) &nbs p; Government of India will pay EPS contribution of 8.33% for all new employees enrolling in EPFO for the first three years of employment. Applicable to those with salaries of Rs. 15,000 per month
(ii) &nbs p; Section 80 JJAA of Income Tax Act being amended to broaden the scope of employment generation incentives.
(iii) &nbs p; Interlinking of State Employment Exchanges with National Career Service Platform.
(iv) &nbs p; Small and medium shops to be permitted to remain open all 7 days a week on voluntary basis. New jobs in retail sector.
13. Measures in the sectors of Infrastructure, Investment, Banking, Insurance etc.
(i) &nbs p; Rs. 2,18,000 crore will be spent on capital expenditure of roads and railways in 2016-17.
Includes: Rs. 27,000 crore PMGSY
55,000 crore Road Transport and highway
15,000 crore NHAI Bonds
1,21,000 crore Railways
(ii) &nbs p; Unserved and underserved airstrips to be revived by AAI and also in partnership with State Governments.
(iii) &nbs p; Road transport sector (passenger segment) to be opened up by removing permit system. This will benefit the poor and middle class, encourage new investment, promote start up entrepreneurs and create new jobs. This is a major reform measure.
(iv) &nbs p; Discovery and exploration of fas in difficult areas will be incentivized by giving them calibrated marketing freedom. This is a major reform measure.
(v) &nbs p; To promote private participation in infrastructure projects, Public Utility (Resolution of Disputes) Bill will be introduced; and guidelines for renegotiation of PPP agreements will be issued, without compromising transparency.
(vi) &nbs p; Changes in FDI Policy.
(vii) For the benefit of farmers, 100% FDI through FIPB route will be permitted for marketing of food products, produced and manufactured in India. This will give big encouragement to food processing industry and create new jobs.
(viii) Guidelines for strategic disinvestment have been approved and will be spelt out.
(ix) &nbs p; Individual units of CPSEs can be disinvested to raise resources for investment in new projects.
(x) &nbs p; In the financial sector, a comprehensive Code on Resolution of Financial Firms will be enacted. Together will the Bankruptcy and Insolvency Law, this will fill a major systemic vacuum. This is a big reform measure.
(xi) &nbs p; SARFAESI Act to be amended to strengthen Asset Reconstruction Companies. This will help in dealing with stressed assets of Banks.
(xii) Public Sector Banks (PSB) – (a) Recapitalisation of PSBs; (b) roadmap to be spelt out for consolidation of PSBs; (c) considering reduction of Government equity in IDBI Bank to 49% of below; (d) DRTs to be strengthened with computerized processing of court cases.
(xiii) General Insurance Companies will be listed in stock exchanges for improving transparency, accountability and efficiency.
(xiv) Comprehensive Central legislation to deal with Illicit Deposit Taking schemes will be enacted.
14. ‘Ek Bharat Shreshtha Bharat’ will be launched to link States and Districts.
15. Technology Driven Platform for Government procurement of goods and services will be set up by DGS&D. This will improve transparency, efficiency and reduce cost of procurement.
16. Fiscal Discipline
(i) &nbs p; Fiscal deficit target of 3.5% of GDP in 2016-17
(ii) &nbs p; Committee for review of FRBM Act.
(iii) &nbs p; Removal of -/Non Plan classification from 2017-18
(iv) &nbs p; Rationalisation of Central Plan Schemes. More than 1500 Central Plan schemes have been restructured to about 300 Central sector and 30 centrally sponsored Schemes.
Fiscal Deficit Retained at 3.9 percent in RE 2015-16 and at 3.5 percent in BE 2016-17
Adhering to the fiscal targets, the fiscal deficit in RE 2015-16 and BE 2016-17 have been retained at 3.9% and 3.5% of GDP respectively. While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that he has weighed the policy options of either in favour of fiscal consolidation and stability or for a less aggressive consolidation and for boosting growth. He has decided that prudence lies in adhering to the fiscal targets but while doing so, it has been ensured that the development agenda has not been compromised.
100 Crore each allocated for celebrating Birth Centenary of Pt Deen Dayal Upadhyay and 350th Birth Anniversary of Guru Gobind Singh
General Budget 2016-17 has proposed allocation of initial sums of Rs. 100 Crore each allocated for celebrating Birth Centenary of Pt Deen Dayal Upadhyay and 350th Birth Anniversary of Guru Gobind Singh. While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that in 2017, the country will also celebrate the 70th Anniversary of our Independence. Government will chalk out milestones for nation’s journey beyond the 70th Anniversary of Independence
Plan – Non Plan Classification To Be Done Away from Fiscal 2017-18
The Plan and Non-Plan classification will be done away with from fiscal 2017-18. This was stated by the Union Finance Minister Shri Arun Jaitley while presenting the General Budget 2016-17 in Lok Sabha today.Shri Jaitley said that successive committees have questioned the merit in having Plan and Non-Plan classification of Government expenditure. A broad understanding over the years has been that Plan expenditures are good and Non-Plan expenditures are bad resulting in skewed allocations in the Budget. This needs to be corrected to give greater focus to Revenue and Capital classification of Government expenditure. Mr. Jaitley said that the Finance Ministry will closely work with the State Finance Departments to align Central and State Budgets in this matter.
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