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Budget Aims to Please Aam Admi, Farmers & the Social Sector
Get live updates on Jaitley’s third Union Budget right here.
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Income Tax Slabs
FM announces no change in personal income tax slabs.
Implementation of GAAR
Committed to implementing General Anit-Avoidance Rule (GAAR) from April 1, 2017
Personal Taxes
Ceiling on tax rebate increased by Rs 3,000 for tax payers earning below Rs 5 lakh.
Smoking Will Cost You
10-15 percent hike in excise duty on tobacco products.
Car Owners to Feel the Pinch
1 percent tax on luxury goods and cars; infra cess of 1 percent on small cars and 2.5 percent on diesel cars.
Startups Get a Boost
100 percent tax deduction for new startups for the first three years, promises Jaitley.
Relief to Those in Rented Houses
Deduction raised from Rs 24,000 to Rs 60,000 under Section 88G
Fiscal Deficit Targets Intact
Crackdown on Black Money
Penalty to be 50 percent of tax in income under-reporting cases, 200 percent in misreporting of facts.
Social Security
Target of disbursement under PM’s MUDRA Yojana at Rs 1,80,000 crore for India’s poor.
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Banking Boost
Rs 25,000 crore allocated for recapitalisation of public sector banks. Bankruptcy Code to be introduced this year in Parliament. This will provide comprehensive resolution of bank NPAs.
Cheer for New Entrants to Workforce
Government will pay EPF contribution of 8.33 percent for all new employees for the first three years.
Infra Boost in Budget
Allocate Rs 55,000 crores for roads and highways, total investment in road sector would be Rs 97,000 crore. This will be further topped up by additional Rs 15000 crore to be raised by NHAI through bonds. Total outlay for infrastructure now stands at Rs 2,21,246 crore.
Jaitley outlines nine pillars to transform India:
1) Agri/Farm and welfare
2) Rural Focus
3) Social Healthcare
4) Education and Job creation
5) Investments to improve quality of Life
6) Infratructure Focus
7) Ease of Business
8) Fiscal Discipline
9) Tax Reforms
‘Plans to Double Farmer Income’
Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana
Govt is launching a new initiative to provide cooking gas to BPL families with state support
28 lakh hectares to be brought under new farm irrigation plan
A dedicated irrigation fund worth Rs 20,000 crore to be set up under NABARD
Rs 35,984 allocated for Agriculture in 2016-17
5 lakh acres to be brought under organic farming over a three year period
Rs 19,000 crore allotted for PMGSY
Addressing the Lok Sabha, Jaitley says, “Presenting the Budget at a time when the global economy is in a crisis.”
The finance minister lists out some achievements of the NDA government:
GDP at 7.6%, economy robust
Inflation has declined despite poor monsoons
CPI inflation has come down to 5.4% under our government, despite two poor monsoons
Forex reserves are at the highest level
We need to prioritise our expenditure, given recommendations of 7th CPC and OROP implementation
Recapitalisation of banks will be done during next financial year
Farm, rural sector, infra, social sector to have more government expenditure
Uproar in Parliament as Jaitley tries to present Union Budget.
Markets Cautious Ahead of Budget, Banks Rally
Sensex cautious ahead of the Budget speech, Nifty holds 7,000. But public sector bank stocks rally up to 4 percent ahead FM’s speech; SBI gains 5 percent, PNB, Bank of Baroda, Andhra Bank rise 3 percent each.
Here are the big numbers to watch for in the Union Budget today:
Fiscal Deficit Target
Some analysts say the FM may miss the 3.5 percent fiscal deficit target for FY17.
Little is expected by way of further income tax relief after the FM’s gift to the aam admi last year. However, we may see some tinkering on the margins.
Indirect Taxes
A roadmap on the Goods and Services Tax is expected. The GST was supposed to come into effect from 1 April 2016, but has now catapulted into a political issue now, from an economic one.
To transition to GST (which will remove every major tax and duty in India), the FM may hike service taxes again this year - something that won’t go down well with the common man. Last year, Jaitley had hiked service taxes to 14 percent from 12.5 percent.
Outlay for Flagship Programmes
The FM may announce more steps to prop up the government’s flagship programmes like the Make in India, Digital India, Startup India, Skill India etc.
Subsidy Rollout
The oil rout was a major windfall for the Modi government, but the FM may announce rationalisation of subsidies, aided by Jan Dhan-Aadhaar-mobile (JAM) trinity.
Modi arrives at Parliament ahead of the announcement of the Union Budget.
The finance minister arrives at Parliament. Copies of Union Budget brought to Parliament moments ago.
Finance minister Arun Jaitley and minister of state for finance Jayant Sinha at the North Block, leaving for Rashtrapati Bhawan.
Here’s the FM with the iconic Budget briefcase.
Sand artist Sudarsan Pattnaik makes a sand sculpture on upcoming Budget 2016 at Puri Sea beach of Odisha.
(Photo Courtesy: Twitter/@sudarshansand)
Welcome to what is arguably the biggest day of the year in Indian finance. It’s the day the Modi government announces its third Union Budget and finance minister Arun Jaitley is in a decidedly unenviable position.
The last two Budgets tabled by Jaitley were largely shied away from any big bang reforms and expectations are low this time around.
In his Mann ki Baat address on Sunday, Modi said he was “full of confidence” ahead of his “examination” today. Will the Modi-Jaitley team deliver a surprise? We’ll know in about an hour. Stay tuned to this space for live updates.
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