Highlights of Union Budget: 2015-16, No change in personal Income tax rates!

This article provides you
the highlights of the Union Budget 2015 -16, which was presented by Finance
Minister Arun Jaitely today in the Parliament.

Finance Minister Arun
Jaitely presented the first – full fledged Union Budget 2015 of the NDA
government in the Parliament.

The Union Budget for 2015 –
16 proposes two new laws and major curbs on black money stashed at home and
abroad. No change has been proposed in the personal Income tax rates but
deduction hiked for Transport allowance and health insurance premium.

Finance
Minister puts forth three achievements of the new government – the success of
the Jan Dhan Yojana, coal auctions and Swachch Bharat Abhiyan.

What is
Budget?

A Government Budget is the legal document
that is passed by the legislature and approved by the President.  The Union Budget of India, referred to as the Annual Financial
Statement in Article 112 of the Constitution of India, is the
annual budget of the Republic of India, presented each year on the last
working day of February by the Finance Minister of India in Parliament.

The budget, which is presented by means of
the Financial Bill and the Appropriation bill has to be passed by the House
before it can come into effect on April 1, the start of India’s financial
year.

History
& Background:
Budget was first introduced in India by the first Finance Member James
Wilson on 7th April, 1860 from East-India Company to British Crown.

First Budget after Independence:  The first Union Budget of
independent India was presented India’s first Finance Minister R.K. Shanmukham
Chetty. He presented the first Budget at 5 pm on 26th November,
1947.

Word ‘Interim Budget’ introduced:  R.K. Shanmukham Chetty introduced the word ‘Interim
Budget’ in 1948-49. From then onwards an interim budget began to mean a budget
for a short period.

Budget presented by Prime Minister: Jawaharlal
Lal Nehru, Indira and Rajiv Gandhi have presented the budget while serving as
the Prime Minister of India. Jawaharlal Lal Nehru was the first prime minister
to present the budget when he held the union finance minister portfolio in
1958-59.  In 1970-71 , after Moraji Desai
resignation, Indira Gandhi, the then Prime Minister of India, took over
the Ministry of Finance to become the only woman to hold the post of the
finance minister

Budget began to prepared in Hindi – In
1955-56 Budget papers began to be prepared in Hindi also, earlier it was
prepared in English only.

Budget presented, maximum number of times:  Former Finance Minister Moraji Desai presented
maximum number of Budget ten times during his tenure. He was the only Finance
Minister to present two budgets on his birthday – in 1964 and 1968 on February
29.

Service tax introduced in budget: Services Tax was introduced by Manmohan Singh in
budget 1994 to tap the growing sector in Indian economy.

Budget presentation time changed: Yashwan Sinha began the new timing of budget speech by presenting the
budget from 2001 at 11:00 am. Until year 2000, the Union Budget was announced
at 5 pm on the last working day of February.

Highlights of Union Budget: 2015 -16:

1. Budget estimates of expenditure:17 .77 lakh cr, of which Non Plan is
13.12 lakh cr, and Plan is 4.65 lakh cr

2. PAN number quoting made compulsory for transactions for more than 1 Lakh

3. Increase exemption on health insurance premium to Rs 25,000 from current
Rs 15,000

4. Rigorous imprisonment of 10 years under Black Money Law

5. Benami
Property Transaction Bill will help tackle black money transactions in real
estate soon

6. Another Rs
1,000 crore to Nirbhaya fund

7. Indian gold
coin with Ashok Chakra will soon introduce.

8. GAAR
implementation deferred by 2 years to April 2017

Taxation:

1. No change in personal Income Tax

2. Service Tax rate
hiked to 14%, from 12.36%

3. Wealth tax to abolished

4. Additional 2%
surcharge on people earning over Rs 1 cr; to fetch Rs 9,000 crore

5. Rate of corporate tax to be reduced to 25% over next four years.  

6. Total exemption of up to Rs. 4,44,200 can be achieved.

7. 100% exemption for contribution to Swachch Bharat, apart from CSR.

8.
Expects to implement goods and services tax by April 2016

Fiscal/ Revenue  deficit

1. Fiscal deficit seen at 3.9
pct of GDP in 2015/16

2. Will meet the challenging
fiscal target of 4.1 pct of GDP

3. Remain committed to meeting
medium term fiscal deficit target of 3 pct of GDP

4.
Current account deficit below 1.3 percent of GDP

5. Revenue
Deficit to be 2.8% in 2015-16

Growth

1. GDP growth seen at between 8
pct and 8.5 pct y/y

2.
Aiming double digit growth rate, achievable soon

Inflation

1. Expects consumer inflation
to remain close to 5 percent by March, opening room for more monetary policy
easing

2. Monetary policy framework
agreement with the RBI clearly states objective of keeping inflation below 6
percent

Agriculture:

1. Rs. 25,000 crore for Rural
Infrastructure Development Bank.

2. In order to improve soil health, the
Agriculture Ministry’s organic farming programme,

3. Rs. 5,300 crore for micro-irrigation
watershed projects

4.
Farmers credit – targets of 8.5 lakh

Infrastructure:

1. Rs. 70,000 crores to Infrastructure sector.

2. Tax-free bonds for projects
in rail road and irrigation

3. PPP model for infrastructure
development to be revitalised and govt. to bear majority of the risk.

4. Second unit of Kudankulam
nuclear power station to be commissioned in 2015/16

5. Rs. 150 crore allocated for
Research & Development

6. NITI to be established and
involvement of entrepreneurs, researchers to foster scientific innovations.

7. Govt. proposes to set up 5
ultra mega power projects, each of 4000 MW.

Education:

1. IIM for
Jammu and Kashmir and Andhra Pradesh.

2. AIIMS in Jammu and Kashmir,
Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam.

3. IIT in
Karnataka; Indian Institute of Mines in Dhanbad to be upgraded to IIT.

4. PG institute of Horticulture
in Armtisar.

5. Kerala to have University of
Disability Studies.

6. Centre of film production,
animation and gaming to come up in Arunachal Pradesh

Defence:

1. Rs. 2,46,726 crore for
Defence.

2. Focus on Make in India for
quick manufacturing of Defence equipment.

Welfare Schemes:

1. 50,000 toilets constructed
under Swachh Bharath Abhiyan.

2. Housing for all by 2020

3. Up-gradation 80,000 secondary
schools.

4. DBT will be further be
expanded from 1 crore to 10.3 crore.

5. New scheme for physical aids
and assisted living devices for people aged over 80 .

6. Govt to use Rs. 9000 crore
unclaimed funds in PPF/EPF for Senior Citizens Fund.

7. Rs. 5,000 crore additional
allocation for MGNREGA.

8.
Nayi Manzil scheme – to enable minority youth to obtain school leaving
certificate and gain better employment.

9. Pradhan Mantri Jeevan Jyoti Bima Yojana – Rs. 1 per day premium, Rs. 2
lakh coverage. Accident death risk – Rs 2 lakhs for a premium of Rs. 12
per year

10. For the Atal
Pension Yojna,
govt. will contribute 50% of the premium limited to Rs. 1000 a year

Renewable Energy:

1. Rs. 75 crore for electric
cars production.

2. Renewable energy target for
2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small
hydro.

Tourism

1. Development schemes for
churches and convents in old Goa; Hampi, Elephanta caves, Forests of Rajasthan,
Leh palace, Varanasi , Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be
under the new tourism scheme.

2. Visa on Arrival for 150
countries

3. GDP growth will
accelerate to 7.4%

Financial Sector

1. NBFCs registered with RBI
above Rs. 5,00 crore to be considered financial institutions.

2. Development of Mudra Bank with corpus of Rs.
20,000 crore for micro-finance to help SC/ST entrepreneur

Policy reforms

1. Propose to create a universal social security system for all Indians

2. Propose to merge commodities regulator with SEBI

3. Allocates 346.99 billion rupees for rural employment guarantee scheme in
2015/16

4. To bring a new bankruptcy code in 2015/16

5. FM said: He will move to amend the RBI act this year, and provide for a
monetary policy committee

6. To set up public debt management agency.

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