Budget 2016 Highlights

Finance Minister Arun Jaitley presented the budget of 2016-17 and following were the points made by him during his speech: –

1. Government should focus on rural sector, infrastructure, social sector and

recapitalise various banks. It should also prioritize its expenditure.

2. Aadhar Card and its schemes shall be statutory backed in the near future.

3. 70% of population of India resides under rural areas and hence 100%

rural electrification will be accomplished by May 2018.

4. In rural areas good quality medicines are rarely available and hence 3,000

new Jan Aushadhi stores are to be established in such parts of India.

5. Fiscal deficit target retained at 3.5 per cent of GDP.

6. Swaccha Bharat Abhiyaan (Clean India Mission) is a flagship program of

Prime Minister Narendra Modi covering 4,041 cities and towns, to clean

the streets and roads of the country. It was officially launched on 2nd

October 2014 and is India’s biggest ever cleanliness campaign. Hence to

increase its efficiency Rs. 9,000 Crores are allocated.

7. PSU Insurance Companies to be listed.

8. On the birthday of Dr. B.K. Ambedkar government has decided to unify

arigculture market e-platform.

9. 100% FDI to be allowed in Food Products Produced and Marketed in

India through FIPB route.

10. For the next year the government would undertake strong transformative

measures based on 9 pillars for India (Agriculture, Fiscal and Tax

reforms, rural sector, ease of doing business, social sector, governance,

education skills/job creation, financial sector reforms, infrastructural

investment).

The entire budget has been divided into 9 different parts whose reforms are

mentioned below:-

Tax:

• Infrastructural and agricultural cess to be levied.
• SUVs and Luxury cars shall be more expensive. For SUVs 4% high capacity tax to be levied.
• All tobacco products other than beedis are to be more expensive since excise duty on them are raised from 10 to 15 per cent.
• 0.5 per cent Krishi Kalyan Cess to be levied on all services.
• Dividend in excess of Rs.10 lakhs per annum to be taxed at additional 10%.
• Limited tax compliance window shall be opened for people to declare there undisclosed income at 45 per cent incl. surcharge and penalties from June 1 – September 30.
• In order to reduce pollution, the government has initiated 1 per cent cess as pollution cess on small petrol, LPG and CNG cars. 2 per cent on diesel cars and lastly 4 per cent on higher-end models as their contribution to pollution is maximum.

Personal Finance:

• The government has made no changes in existing income tax slabs.
• Rs. 1,000 crores are allocated for new EPF (Employees’ Provident Fund) scheme.
• Income above Rs.1 crore is very rare and hence government has put 15 per cent surcharge on income above Rs.1 crore.
• In order to promote ‘Housing for All by 2022’ scheme, the government has decided to provide exemption from service tax to all those who are constructing houses of less than 60 sq.m.
• Moreover, apart from this provision the government has also provided exemption of Rs. 50,000 for housing loans up to Rs.35 lakhs, provided that the cost of house is not above Rs.50 lakhs.

Social:

• Rs. 38,000 crores for Mahtma Gandhi MGNREGA for 2016-17.
• In order to provide entrepreneurship among backward section of society the government shall create Hubs to support SC/ST entrepreneurs.
• The government under the scheme ‘Shyama Prasad Mukherji Rurban Mission’ shall create 300 urban clusters.
• Government has allocated Rs. 9,500 crores to Swachh Bharat Abhiyan.

Health:

• National Dialysis Service Program shall now be funded through PPP mode in order to provide dialysis equipment to all district hospitals.
• Senior citizen to get additional healthcare cover of Rs. 30,000 crores.
• Government to establish a new health protection scheme for health cover upto 1 lakh per family.
• PM Jan Aushadhi Yojana to be strengthened by opening 300 generic drug stores in various parts of India.

Education:

• In order to make enhance education standards, the government has decided to convert 10 public and 10 private institutes into world class institutes.
• Entrepreneurship training to be given across schools, colleges and through online courses.
• To provide good quality education, the government will establish 62 new navodaya vidyalayas.
• Digital literacy scheme to be launched to cover 6 crores additional rural households.

Energy:

• In order to generate more nuclear power, the government has earmarked Rs. 3,000 crores.
• Incentives shall be provided for deep-water gas exploration.
• Government has planned to exploit nuclear energy for the next 15-20 years.

Investments and Infrastructure:

• For roadways, government has allocated Rs. 27,000 crores.
• 2015 recorded highest production of motor vehicles.
• 100 per cent FDI in marketing food products that are produced in India.
• MAT to be applicable for startups that qualify for 100% tax exemption.
• Government to amend Motor Vehicle Act in passenger vehicle in order to encourage innovation.

Agriculture:

• Total allocation for farmers and agriculture sector is Rs. 35,984 crores.
• 5 lakh acres to be used for organic farming for at least 3 years.
• 28.5 lakh hectares of land to be used for irrigation.
• In order to recharge ground water and to prevent drought by methods of water conservation, the government has allocated Rs. 60,000 crores.

Banking:

• Disbursement under MUDRA is increased to 1,80,000 crores.
• Government to increase ATMs and Micro-ATMs in the next three years.
• Banks to get a big boost as government has allocated Rs. 25,000 crores towards recapitalization of public sector banks.
• General Insurance companies to be listed in the stock exchange.

Author: This blog is written by  Mr. Aman Tiwari, student of National Law University Odisha, Cuttack, a passionate blogger & intern at  Aapka Consultant.

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