The finance minister Mr. Arun Jaitley announced the union budget 2016-17 on 29th February. This was the third budget announced by him.
HIGHLIGHTS OF BUDGET 2016-17
Agriculture and Rural
- Allocation for Agriculture and Farmers’ welfare is 35,984 crore
- ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
- A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about 20,000 crore
- Soil Health Card scheme will cover all 14 crore farm holdings by March 2017
- Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets
- Allocation under Prime Minister Fasal Bima Yojana 5,500 crore.
- 850 crore for four dairying projects – ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds
- Allocation for rural sector – 87,765 crore.
- A sum of 38,500 crore allocated for MGNREGS.
- 300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission
- 100% village electrification by 1st May, 2018.
- 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
- New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of 655 crore
Social Sector
- Allocation for social sector including education and health care – 1,51,581 crore.
- 2,000 crore allocated for initial cost of providing LPG connections to BPL families.
- 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.
- National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry association
- Allocation of 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru Gobind Singh
Education, Job Creation and Skill Development
- 62 new Navodaya Vidyalayas will be opened
- Higher Education Financing Agency to be set-up with initial capital base of ` 1000 Crores
- Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be set-up.
- Allocation for skill development – 1804. crore.
- National Board for Skill Development Certification to be setup in partnership with the industry and academia
- 1500 Multi Skill Training Institutes to be set-up.
- 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 1000 crore for this scheme
- 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 ` 97,000 crore during 2016-17.
- Total outlay for infrastructure – 2,21,246 crore.
- Comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation to be drawn up.
- 100% FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India
Financial Sector Reforms
- 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 25,000 crore towards recapitalisation of Public Sector Banks
- Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to 1,80,000 crore.
- General Insurance Companies owned by the Government to be listed in the stock exchanges.
Governance
- Introduce DBT on pilot basis for fertilizer.
- Price Stabilisation Fund with a corpus of 900 crore to help maintain stable prices of Pulses.
- “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
Fiscal Discipline
- 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
- Committee to review the implementation of the FRBM Act.
Tax Matters
- Raise the ceiling of tax rebate under section 87A from `2000 to `5000 to lessen tax burden on individuals with income upto 5 lakhs.
- Increase the limit of deduction of rent paid under section 80GG from 24000 per annum to 60000, to provide relief to those who live in rented houses
- New manufacturing companies incorporated on or after 1.3.2016 to 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
- 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases.
- Commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.
- Withdrawal up to 40% of the corpus at the time of retirement to 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 1.4.2016
- Limit for contribution of employer in recognized Provident and Superannuation Fund of ` 1.5 lakh per annum for taking tax benefit.
- Deduction for additional interest of `50,000 per annum for loans up to 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed 50 lakh.
- Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of 10 lakh per annum
- Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above 1 crore
- Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of ten lakh and purchase of goods and services in cash exceeding two lakh.
- Excise duties on various tobacco products other than beedi raised by about 10 to 15%
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