Finance Minister Arun Jaitley presented the Union Budget with a focus to alleviate the slowdown in rural India, which had been battered by back-to-back years of drought.
Here are the key highlights of Union Budget 2016-17:
AGRICULTURE AND FARMERS’ WELFARE
Allocation for Agriculture and Farmers' welfare is Rs 35,984 crore
- 'Pradhan Mantri Krishi Sinchai Yojana' to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
- Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked
- A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about Rs 20,000 crore
- Programme for sustainable management of ground water resources with an estimated cost of Rs 6,000 crore will be implemented through
3 multilateral funding
- 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 under MGNREGA
- Soil Health Card scheme will cover all 14 crore farm holdings by March 2017. Allocation under Pradhan Mantri Gram Sadak Yojana increased to Rs 19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.
- 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.
- Allocation under Prime Minister Fasal Bima Yojana Rs 5,500 crore.
Allocation for rural sector is Rs 87,765 crore.
- Rs 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
- Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission
- A sum of Rs 38,500 crore allocated for MGNREGS.
- 300 Rurban Clusters will be developed under the Shyama Prasad
4 Mukherjee Rurban Mission
- 100% village electrification by 1st May, 2018.
SOCIAL SECTOR INCLUDING HEALTH CARE
- Allocation for social sector including education and health care – Rs 1,51,581 crore.
- Rs 2,000 crore allocated for initial cost of providing LPG connections to BPL families.
- New health protection scheme will provide health cover up to Rs 1 lakh per family. For senior citizens an additional top-up package up to Rs 30,000 will be provided.
- 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
- ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode
- 'Stand Up India Scheme' to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs.
- Allocation for skill development – RS 1804. crore.
- 1500 Multi Skill Training Institutes to be set-up.
- National Board for Skill Development Certification to be setup in partnership with the industry and academia.
- GoI will pay contribution of 8.33% for of all new employees enrolling in EPFO for the first three years of their employment. Budget provision of RS 1000 crore for this scheme.
- Deduction under Section 80JJAA of the Income Tax Act will be available to all assesses who are subject to statutory audit under the Act
- 100 Model Career Centres to operational by the end of 2016-17 under National Career Service.
INFRASTRUCTURE AND INVESTMENT
- Total investment in the road sector, including PMGSY allocation, would be RS 97,000 crore during 2016-17.
- India’s highest ever kilometres of new highways were awarded in 2015. To approve nearly 10,000 kms of National Highways in 2016-17.
- Allocation of RS 55,000 crore in the Budget for Roads. Additional RS15,000 crore to be raised by NHAI through bonds.
- Total outlay for infrastructure - RS 2,21,246 crore
FINANCIAL SECTOR REFORMS
- A comprehensive Code on Resolution of Financial Firms to be introduced.
- Statutory basis for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016.
- A Financial Data Management Centre to be set up.
- RBI to facilitate retail participation in Government securities.
- New derivative products will be developed by SEBI in the Commodity Derivatives market.
- Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in the ARC and permit non institutional investors to invest in Securitization Receipts.
- Allocation of RS 25,000 crore towards recapitalisation of Public Sector Banks.
- Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to RS 1,80,000 crore.
GOVERNANCE AND EASE OF DOING BUSINESS
- A Task Force has been constituted for rationalisation of human resources in various Ministries. - Comprehensive review and rationalisation of Autonomous Bodies. - Bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar framework to be introduced.
- Introduce DBT on pilot basis for fertilizer.
- Automation facilities will be provided in 3 lakh fair price shops by March 2017.
- Amendments in Companies Act to improve enabling environment for start-ups.
- Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.
- Revenue Deficit target from 2.8% to 2.5% in RE 2015-16
- Total expenditure projected at RS 19.78 lakh crore
- Plan expenditure pegged at RS 5.50 lakh crore under Plan, increase of 15.3%
- Non-Plan expenditure kept at RS 14.28 lakh crores
- Plan / Non-Plan classification to be done away with from 2017-18.
RELIEF TO SMALL TAX PAYERS
- Raise the ceiling of tax rebate under section 87A from RS2000 to RS5000 to lessen tax burden on individuals with income upto RS5 laks.
- Increase the limit of deduction of rent paid under section 80GG from RS24000 per annum to RS60000, to provide relief to those who live in rented houses.
BOOST EMPLOYMENT AND GROWTH
- Complete pass through of income-tax to securitization trusts including trusts of ARCs. Securitisation trusts required to deduct tax at source.
- Increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to RS 2 crores to bring big relief to a large number of assessees in the MSME category.
MAKE IN INDIA
- 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 & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair.
PROMOTING AFFORDABLE HOUSING
- 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply. - Deduction for additional interest of RS50,000 per annum for loans up to RS35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed RS 50 lakh.
- Distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax, in respect of dividend distributed after the specified date.
PROVIDING CERTAINITY IN TAXATION
- Committed to providing a stable and predictable taxation regime and reduce black money.
- Domestic taxpayers 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. Declarants will have immunity from prosecution. - Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.
SIMPLIFICATION AND RATIONALIZATION OF TAXES
- 13 cesses, levied by various Ministries in which revenue collection is less than RS 50 crore in a year to be abolished.
- For non-residents providing alternative documents to PAN card, higher TDS not to apply.