29/02/2016
Here are the highlights of Jaitley's budget for the fiscal year that begins on April 1.
FISCAL DEFICIT
* Fiscal deficit seen at 3.9 percent of GDP in 2015/16
* Fiscal deficit seen at 3.5 percent of GDP in 2016/17
* Planned expenditure seen at 5.5 trillion rupees in 2016/17
* Proposes to set up panel to review fiscal responsibility management act
RURAL ECONOMY
* Rural jobs programme allocated 385 billion rupees in 2016/17
* Farmer welfare budget to total 359.84 billion rupees
* Rural road development to get 190 billion rupees
* Target of agriculture credit at 9 trillion rupees
* Interest subvention towards farm loans at 150 billion rupees
* To set up dedicated irrigation fund worth 200 billion core initially
* Allocates 55 billion rupees for crop insurance programme for 2016/17
GROWTH
* Nominal GDP growth seen at 11 percent year-on-year in 2016/17
MONETARY POLICY
* Government along with central bank to set retail inflation target every 5 years
* Monetary Policy Committee to have 6 members, including 3 appointed by federal government
* Monetary Policy Committee to decide policy rates to achieve inflation target; decisions shall be binding on central bank
* RBI act is being amended for implementing monetary policy framework
BANKING REFORMS
* Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required
* To weigh cutting stake in state-run IDBI below 50 percent
POLICY REFORMS
* Proposes to raise foreign portfolio investment limit in state-run companies except banks to 49 percent from 24 percent currently
* Bankruptcy code for financial firms to be introduced in parliament in 2016/17
* To list general insurances companies on stock exchanges
* Companies Act 2013 to be amended to improve ease of doing business
MARKET REFORMS
* Investment basket of foreign portfolio investors in corporate bonds will also include unlisted debt securities, pass-through securities
* Proposes raising investment limit for foreign entities in local stock exchanges to 15 percent from 5 percent
* Government proposes developing an electronic platform for repo in corporate bonds in 2016/17
INFRASTRUCTURE
* Allocates 2.21 trillion rupees for infrastructure development for 2016/17, up 22.5 percent on last year
* Allocation for roads and highways development at 550 billion rupees
* Capital expenditure on roads and rail development at 2.18 trillion rupees
DISINVESTMENT
* Total stake sales in 2016/17 seen at 565 billion rupees
* To encourage central public enterprises to divest own assets for raising resources for new projects
* Strategic divestment seen at 205 billion rupees
TAXATION
* Net revenue gain of 196.1 billion rupees seen from taxes in 2016/17
* Will not resort to retrospective taxation in future; one time tax dispute resolution proposed for retrospective taxation
* To rationalise corporate tax for new manufacturing companies
* To implement general anti avoidance tax rule from April 1, 2017
* To levy 20 percent ad valorem duty on locally produced crude oil versus current 4,500 rupees per tonne
* Security transaction tax on options raised to 0.05 percent
* Proposes to levy infrastructure cess of 1-4 percent on certain models of cars
* Raises factory gate tax on various to***co products by 10-15 percent
* Proposes limited compliance window on undeclared income of domestic tax payers; new dispute resolution scheme to resolve tax disputes
* Thirteen cesses levied by various ministries having revenue collection of less than 5 million to be abolished
* Proposes to raise excise duty on aviation turbine fuel to 14 percent from 8 percent
* Considers scrapping export duty on low-grade iron ore
* Increases import duty on aluminium products to 7.5 percent from 5 percent
* Redemption of sovereign gold bonds by individuals will be exempt from capital gains tax
* Forex appreciation gains at redemption on rupee-denominated bonds by non-residents will be exempt from capital gains tax
EXPENDITURE
* Allocates 2.49 trillion rupees for defence sector in 2016/17
BORROWING
* Gross market borrowing seen at 6 trillion rupees for 2016/17
* Net market borrowing seen at 4.25 trillion rupees for 2016/17
* Government to switch bonds worth 750 billion rupees in 2016/17
SUBSIDIES
* Total subsidy seen at 2.5 trillion rupees in 2016/17
* Food subsidy seen at 1.35 trillion rupees
* Petroleum subsidy estimated at 269.5 billion rupees
* Fertilser subsidy seen at 700 billion rupees
INVESTMENT
* 100 percent foreign direct investment to be allowed in food processing industry
* Promises further reforms in foreign direct investment policy in insurance, pension, asset recast companies
GOLD
* Jaitley makes no mention of revising gold import duty in budget speech
* India raises concessional countervailing duty on gold dore bars to 8.75 percent from 8 percent
