Union Budget 2015-16: Highlights

The finance minister Mr. Arun Jaitley announced his first full union budget 2015-16 on 28th February. This was the second budget announced by him.

Table of Contents

HIGHLIGHTS OF BUDGET 2015-16

TAXATION

No change in individual income tax slabs. Total exemption of up to Rs. 4,44,200 can be achieved.
Limit of deduction of health insurance premium increased to 25,000 rupees from 15,000 rupees; limit increased to 30,000 rupees from 20,000 rupees for the elderly.
People aged above 80 and not covered by health insurance to be allowed deduction of 30,000 rupees for medical expenses.
Additional deduction of 25,000 rupees for the disabled.
Limit on deduction for contributions to pension fund and new pension scheme increased to 150,000 rupees from 100,000 rupees.
Additional deduction of 50,000 rupees for contribution to new pension scheme under section 80CCD.
Monthly transport allowance exemption doubled to 1,600 rupees from 800 rupees.
Abolition of Wealth Tax. Additional 2% surcharge for the super-rich with income of over Rs. 1 crore.
Rate of corporate tax to be reduced to 25% over next four years.
100% exemption for contribution to Swachch Bharat, apart from CSR.
All contributions to Sukanya Samridhi scheme to be tax free.
Government to reduce custom duty on 22 items.
Service tax increased to 14 per cent from the current 12.36 per cent.
IMPORT TAX – Import tax on iron and steel increased to 15 percent from 10 percent. Import tax on metallurgical coke increased to 5 percent from 2.5 percent

FISCAL DEFICIT AND GROWTH

Fiscal deficit seen at 3.9 percent of GDP in 2015-16. Will meet the challenging fiscal target of 4.1 percent of GDP.
Current account deficit below 1.3 percent of GDP
GDP growth seen at between 8 percent and 8.5 percent. Nominal economic growth seen between 11 and 12 percent
Revenue deficit seen at 2.8 percent of GDP

INFLATION

Expects consumer inflation to remain close to 5 percent by March, opening room for more monetary policy easing. Monetary policy framework agreement with the RBI clearly states objective of keeping inflation below 6 percent

POLICY REFORMS

To raise visa-on-arrival facility to 150 countries from 43.
Defence allocation for this fiscal is Rs 2,46,727 crore.
GST to be put in place by April 1, 2016
States get 62% of the total resources now.
Raises threshold for application of transfer pricing rules to 200 million rupees from current 50 million rupees
Allocates 346.99 billion rupees for rural employment guarantee scheme
To enact a comprehensive new law on black money
To launch a national skills mission soon to enhance employability of rural youth
Government defers rollout of anti-tax avoidance rules GENERAL ANTI-AVOIDANCE RULES (GAAR) by two years. GAAR to apply prospectively from April 1, 2017. Retrospective tax provisions will be avoided.
To develop an Indian gold coin, which will carry the Ashok Chakra on its face, to reduce the demand for foreign coins and recycle the gold available in the country. Sovereign Gold Bond, as an alternative to purchasing metal gold.

WELFARE SCHEMES, NEW PROJECTS AND PROGRAMMES

5 more AIIMSs in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.
IIT in Karnataka. While, the Indian School of Mines in Dhanbad, Jharkhand will be converted into IIT. 2 more IIMs in Jammu and Kashmir and Andhra Pradesh.
For Infrastructure sector Rs. 70,000 crores allocated
5 ultra-mega power projects each of 4000MW proposed by Government
Infrastructure development through PPP model will be revitalised and government will bear majority of the risk
Under the Swachh Bharat Abhiyan, six crore toilets across the country will be built.
MGNREGA will get allocation of Rs. 5,000 crore. It is highest allocation to this scheme
Housing for all till 2020.
Direct Benefit Transfer (DBT) will be further be expanded to 10.3 crore from 1 crore.
Government will contribute 50% of the premium limited to Rs. 1,000 a year for the Atal Pension Yojana.
9,000 crore unclaimed funds in PPF/EPF will be used for Senior Citizens Fund.
Forward Markets Commission (FMC) will be merged with the Securities and Exchange Board of India (SEBI).
Under SARFAESI Act 2002, NBFCs registered with the RBI having asset size of Rs 500 crore and above to be considered as financial institution for mid-corporate businesses and fund SME.
For Rural Infrastructure Development Bank, Rs. 25,000 crore allocated.
To support Micro Irrigation Programme, Rs. 5,300 crore allocated.
Rs 150 core to create world class IT hub in India
Upgradation of 80,000 secondary schools.