On 28th February, 2015, the Union Government tabled the budget for the financial year 2015-16. Focusing on growth, low inflation and more friendly social schemes, the Budget refrained from making sensationalist or populist announcements and focused more on balance and growth. Finance Minister Arun Jaitley began the Budget by pointing out that lowering inflation, Swachh Bharat Abhiyan are some of the successes by the Union Government in the past one year. Here are some of the key sector-wise highlights of the Union Budget 2015-16:
- Wealth Tax to be abolished.
- Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
- Rate of Corporate Tax to be reduced to 25% from 30% over the next four years.
- Total exemption of up to Rs. 4,44,200 can be achieved.
- 100% exemption for contribution to Swachh Bharat, apart from Corporate Social Responsibility (CSR).
- Service Tax increased to 14%
With the abolition of wealth tax and reduction of corporate tax, the Government has extended a friendly hand towards the corporate sector. With the amount of exemption increased, it becomes easier for small and middle income groups to breathe easy. 100% exemption for contribution to Swachh Bharat would see more contribution and thus strengthen the cleanliness drive for the country.
- Rs. 25,000 Crore for Rural Infrastructure Development Bank.
- Rs. 5,300 crore to support Micro Irrigation Programme.
- Farmers credit – target of 8.5 lakh crore.
Farmers to get more credit and with the massive allocation for development of Rural infrastructure, the Agricultural sector will witness good growth and development.
- Rs. 70,000 crores to Infrastructure sector.
- Tax-free bonds for projects in rail road and irrigation.
- PPP model for infrastructure development to be revitalised and govt. to bear majority of the risk.
- Rs. 150 crore allocated for Research & Development.
- NITI to be established and involvement of entrepreneurs, researchers to foster scientific innovations.
- Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.
Establishment of NITI to come as a welcome change as entrepreneurs and researchers can come together for infrastructure development projects. 5 ultra mega power projects would see the harnessing of more energy, thus providing power to industries across. Risk factor for Private Enterprises in PPP projects comes down with the govt ready to bear majority of the risk, thus encouraging more Private enterprises to become a part of PPP projects.
- Rs. 2,46,726 crore for Defence.
- Focus on Make in India for quick manufacturing of Defence equipment.
- 50,000 toilets constructed under Swachh Bharath Abhiyan.
- Two other programmes to be introduced- GST & JAM Trinity. GST will be implemented by April 2016.
- MUDRA bank will refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
- Housing for all by 2020. 2 Crore houses in Rural Areas and 5 Crore houses in Urban areas.
- Upgradation 80,000 secondary schools.
- DBT will be further be expanded from 1 crore to 10.3 crore.
- Rs. 5,000 crore additional allocation for MGNREGA.
- Govt. to create universal social security system for all Indians.
With housing for all by 2020, the government has become stronger in its appeal to provide housing for all in both rural and urban areas within the next 5 years. Swachh Bharat Abhiyan will see the cleanliness drive taken to another level and eradicating problems like open defecation.
- Rs. 75 crore for electric cars production.
- Renewable energy target for 2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro.
Overall, these major highlights from the Budget show that the Government is focusing more on growth, inclusion and development rather than announcement of schemes. Measures such as Housing for all by 2022 or reduction in Corporate Tax show that the Government is interested in development in all sectors and has given equal priority to each. What waits to be seen is how well these are implemented as we, like countless others would wait for double digit growth and reduction of inflation by the next financial year.