Budget 2020

In 'farm' Jaitley reaches out to all

BL Internet Desk | Updated on July 23, 2019 Published on February 29, 2016
Finance Minister Arun Jaitley with Minister of State Jayant Sinha and Finance Secretary Ratan Watal leaving the Finance Ministry to present the Union Budget 2016-17 in Parliament House, in the Capital on February 29 , 2016. Photo: Ramesh Sharma

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Finance Minister, Arun Jaitley, with Minister of State, Jayant Sinha, giving final touches to the Union Budget 2016-17 at North Block, in the Capital on Sunday. Also in the picture (from standing right) Finance Secretary, Ratan Watal, Secretary, Diinvestment, Neeraj Kumar Gupta, Secretary, Economic Affairs, Shaktikanta Das, Revenue Secretary, Hasmukh Adhia, and Chief Economic Adviser Arvind Subramanian
Photo: Ramesh Sharma

Finance Minister Arun Jaitley with Minister of State Jayant Sinha giving final touches to the Union Budget 2016-17 at North Block, in the Capital on Sunday. Jaitley's team in picture (from standing right) Finance Secretary Ratan Watal, Disnvestment Secretary, Neeraj Kumar Gupta, Economic Affairs Secretary, Shaktikanta Das, Revenue Secretary, Hasmukh Adhia, and Chief Economic Adviser Arvind Subramanian. Photo: Ramesh Sharma

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Presenting his third Budget, Finance Minister Arun Jaitley made no changes in the personal or corporate income-tax slabs but made costlier several items by raising duties. The Budget brought in a new 0.5 per cent Krishi Kalyan Cess on all taxable services to fund agriculture while proposing a retirement tax on 60 per cent of the pension and provident fund corpus including EPF created after April 1, 2016.

Presenting his third Budget, Finance Minister Arun Jaitley made no changes in the personal or corporate income-tax slabs but made costlier several items by raising duties. The Budget brought in a new 0.5 per cent Krishi Kalyan Cess on all taxable services to fund agriculture while proposing a retirement tax on 60 per cent of the pension and provident fund corpus including EPF created after April 1, 2016. Synopsis:Amidst global and domestic headwinds, Finance Minister Arun Jaitley presented a growth and development-oriented Budget that seeks to transform india for the benefit of farmers and the vulnerable. Jaitley’s third Budget saw enhanced focus on agriculture and rural sectors while having some special measures to boost infrastructure in the country. The Budget did not deviate from the fiscal growth. Read full text of Budget speech here
Quick take
: It's more a Rahul Dravid budget than a Sehwag one Click here to read
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Short term pain for long-term gains Click here to read
Markets at close
Shares fell on Monday in a volatile session, with energy companies such as Oil and Natural Gas Corp slumping after the government unveiled a higher-than-expected tax in its budget for 2016/17, offsetting hopes for rate cuts that had lifted bonds and the rupee. The stock markets were disappointed with the increase in Securities Transaction Tax on options from 0.017 per cent to 0.05 per cent and also the Dividend Distribution Tax where Jaitley has proposed an extra 10 per cent tax in the hands of the investor on dividend income over Rs 10 lakh in a year. In a trading marked by spells of volatility, the Sensex crashed to 22,494.61, a loss of 659.69 points, or 2.84 per cent in the afternoon trade. The 50-share NSE Nifty dropped 203.95 points, or 2.90 per cent, to 6,825.80. However, buying by domestic institutions and reports about an imminent rate cut by RBI helped improve the sentiment battered by the proposal for higher dividend distribution tax on those earning more and a proposal to increase securities transaction tax in some categories. The 30-share BSE index Sensex ended lower by 152.30 points or 0.66 per cent at 23,002 and the 50-share NSE index Nifty ended down by 42.7 points or 0.61 per cent at 6,987.05.
Union Budget 2016 as it was presented in Parliament on February 29, 2016 (Latest first):
Markets at 12.45 pm : Benchmark index Sensex still down by more than 300 points even as Union Budget 2016 presentation ends

No service tax for houses built under 60 sq metres.
Announces two new cesses for agri and infra
4% high capacity tax for SUVs.
Rate of securities transaction tax to be raised from 0.017 per cent to 0.05 per cent
Clean Energy Cess to renamed as Clean Environment Cess
Abolishment of 13 cesses that raise less than Rs 50 crore, levied by various ministeries
Committed to stable taxation regime. No more retrospective amendments
Limited period compliance window for taxpayers to declare undisclosed income. Declarations to have immunity from prosecutions
No face to face contact between IT authority and tax payer
Tech usage to be increased in income tax dept, for data mining and also catch tax evaders
Direct tax proposals result in revenue loss of Rs 1,060 crore, indirect tax proposals result in gain of Rs 20,670 crore
Revenue gain of Rs 19,600 crore in Union Budget 2016 proposals.


Govt to increase ATMs, micro-ATMs in post offices in next three years.
Excise on tobacco products to go up to 15%. ITC shares down over 2 per cent
In 2016-17, govt eyes Rs 1,80,000 crore credit target through Mudra bank
Tax proposals

No changes have been made to existing income tax slabs.

Easwar committee report included in Union Budget 2016. Presumptive income taxation scheme expanded
Presumptive income tax scheme for all professionals with gross income of Rs 50 lakh

FM focuses on relief for small tax payers
People with income less than Rs 5 lakh to get deduction of Rs 5,000, up from Rs 2,000 last year
Deduction for rent paid to go up to Rs 60,000 from Rs 24,000 for people not getting HRA
For MakeinIndia, Union Budget 2016 rejigs rates of customs and excise duties for some items
Effective tax rate of corporates is 24.67%
Corp tax rate to be 29% for cos with turnover less than Rs.5 crore
New manufacturing companies to be taxed at 25 per cent plus surcharge
Tax holiday for startups for three of five years of setting up the company
GAAR from April 2017
Accelerated depreciation to be limited to 40 per cent wef from April 1, 2017 as part of phasing out of exemptions to industry.
National Pension Scheme gets partial tax exemption for withdrawal-- 40% of withdrawal to be exempt
No tax on annuity pension going to legal heir
Boost for Real Estate Investment Trusts, exemption from dividend distribution tax.
Dividends over Rs 10 lakh to be taxed at 10%
0.5 pc Krishi Kalyan Cess to be levied on all services.

Fiscal situation

Fiscal deficit targeted at 3.5%
15.3 per cent increase in total budget expenditure
Plan and non plan classification to b done away with from this year
Govt plans to spend Rs 19.78 lakh crore in 2016—17 — Rs 5.5 lakh crore under plan head, Rs 14.28 lakh crore under non—plan head.
FRBM Act implementation to be reviewed
All new Central schemes to have 'sunset date' and outcome budgeting


FDI policy and reforms
Big announcement: General insurance companies in govt sector to be listed
Aadhaar to be backbone for delivering subsidy benefits, legislation to be introduced soon
Task force for rationalising human resource in govt ministries--- significant.
Technology based platform for procurement in various ministries
Registration of start-ups in a single day.
Direct Benefit Transfer for fertilisers subsidy to be tested on a pilot basis
Bill to amend companies act to be introduced.
Automation facilities to be provided at 3 lakh fair price shops
Number of measures to be undertaken to deepen corporate bond market
FDI reforms in insurance, pension, ARCs, stock exchanges
Dept of Disinvestment is rechristened as Dept of public investment
NITI Aayog to look at strategic sales
RBI Act being amended to provide statutory basis for monetary policy framework
Financial Data Management Centre for integrated data collection and analysis

100% FDI in marketing of food products produced and marketed in India
Bankruptcy code to be introduced
Rs.25,000 cr for bank recapitalisation-- way below what is needed
Bank recap allocation along expected lines, will prove insufficient and only hints at going below 50% stake in PSU banks.
More Securities Appellate Tribunal benches to be set up
A comprehensive approach to be adopted for Government investment in CPSEs
Infrastructure

Total outlay on infrastructure in 2016-17 is Rs 2,21,246 crore
Capex on railways/roads Rs 2 lakh crore, a mammoth allocation in FY 17
Our medium term goal is to abolish permit raj
Entrepreneurs will be able to ply buses on specific roads: permission raj to go
New greenfield ports to be developed on east and west coasts
10,000 km of national highways to be added
Revival of underserved airports. Partner with States to revive airports for regional connectivity.
Massive State push to infrastructure spending... sting will come in tax proposals?
New credit rating system for infrastructure to be developed
Finance Minister lays down comprehensive plan of 15-20 years to develop nuclear power generation
Innovation
Oil discovery to get incentives
Natural resources discovery and exploitation has been low.
Govt to consider incentivise extraction of hydrocarbon from deep sea
Deepwater gas new discovery to get calibrated market freedom, pre-determined ceiling price based on landed price of alternate fuels
Retail push
Jaitely moots plan to let small shops to open 7 days a week. Model shops establishment Bill for smaller shops to be circulated for states.
Focus on agriculture will accelerate growth of tech companies in agri space: IESA Chairman Vinay Shenoy
11.40 am

A Digital Depository to be established which will be a One-stop place for all education related e-certificates
Next big step for quality education. Arun Jaitley sets up Higher Edu Financing Committee with Rs 1,000 crore fund
62 new Navodaya Vidyalaya
Skilling of 1 crore youth over the next three years
National SC/ST hub to be set up in MSME Ministry, providing professional help
Incentivise employers to employ unskilled and skilled workers
Standup India Scheme to get Rs 500 cr for promoting entrepreneurship among SC/ST
Renal patients get a shot in arm. Govt announces sops. National Dialysis Service Programme with funds through PPP mode to provide dialysis at all district hospitals.
FM appreciates 75 lakh middle class and lower middle class families for giving up LPG Subsidy
11.25 am
RURAL ECONOMY

Rural development cheers. Gets huge allocation in budget
Allocation of Rs 87,000 cr for overall rural development sector.
100% rural electrification to be done by May 2018
Around 3,000 stores under PM Jan Aushadhi Yojana to be opened in a year.
65 eligible habitats to be connected via 2.23 lakh km of road. Current construction pace is 100 kms per day
Rs 2.87 lakh crore grant in aid to gram panchayats and urban local bodies
Rs 38,500 crore for MGNREGA... highest amount spent on the scheme till now
New health protection scheme with Rs 1 lakh cover per family to be launched
Key element for social sector: Massive mission to provide LPG connection in the name of women
Now rural women to get LPG connection in their name. Rs 2,000 crore allocated for 5 years for BPL families
Swacch Bharat to get Rs 9,500 crore
Villages to be rewarded for getting rid of open defacation

Digital Literacy Mission for rural India
National digital literacy scheme to cover 6 crore households this year
Land record digitization revamped under Digital India program

11.15 am
AGRICULTURE
Govt to help farmers double their income
Agriculture and farmers welfare. Income security for farmers. Double the income of farmers by 2020. Rs 35,984 crore allocation for farmer welfare. Soil fertility, connectivity from farm to market, irrigation and water utility
17,000 crore needed for new irrigation projects this year.
28 lakh hectares to be brought under irrigation plan
Dedicated irrigation fund in NABARD of Rs.20.000 cr
Rs 360 crore to improve soil health
₹35,894 cr allocated for farmer's welfare
A major programme for ground water restoration under MGNREGA
Increase crop yield in rain fed areas, 55 per cent of arable land, organic farming promoted. Organic Value Chain development - in North East to find domestic and export market.
Boost to organic farming through special provisions
5 lakh hectares to be brought under organic farming
Unified e-marketing platform to go live on Dr Ambedkar's birthday
PM Fasal Bima Yojana to get Rs 5,500 cr in Budget. Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana
Four new projects for Dairy sector and animal husbandry.
Rs 15,000 cr interest subvention for farm loans under budgetary estimates for 2016-17
Nine pillars: agriculture, rural employment and infra, social sector, skills and job creation, infra and financial sector reforms, governance and ease of business, fiscal discipline and tax reforms

Law to give statutory backing to Aadhaar platform
We need to prioritize our expenditure, given recommendations of 7thCPC and OROP implementation
Government to increase outlay of social sector programmes: FM
New initiative for BPL families for LPG
Growth has acclerated to 7.6 pc in 2015-16 notwithstanding contraction of global exports
We have to have a prudent fiscal policy, raise domestic demand, carry out reforms
Farm, rural sector, infra, social sector to have more Government expenditure
Will enhance expenditure in farm and rural, infrastructure and recapitalisation of banks
Increased the plan expenditure in the RE stage, a reverse from previous budgets
We must rely on domestic demand
Risks of global slowdown and turbulence are mounting
Foreign exchange reserves at highest ever level
CAD at 1.4% of GDP at end of this fiscal
The CPI inflation has come down to 5.4% from 9 plus, bringing big relief to the public
We have converted difficulties and challeneges into an opportunity
Presenting Budget at a time of global economic slowdown, says Arun Jaitley
11 am
Finance Minister Arun Jaitley begins Budget speech amidst chaos



First real budget of Modi govt?
Though technically this is Jaitley’s third Budget, it is being seen as the first real one of the Modi government, and is expected to take forward the BJP’s agenda of development and growth. Jaitley’s first Budget was not for the full fiscal, while in the second the government claimed to be correcting legacy issues inherited from the previous regime.
Markets @ 10.40 am
The Sensex and the Nifty were marginally down ahead of the Budget presentation on reduced bets by cautious retail investors amid continued capital outflows by foreign funds. The Sensex was down 28.92 points or 0.12 per cent at 23,125.38. Similarly, the NSE Nifty was trading down 15.65 points or 0.22 per cent at 7,014.10. The rupee was quoting at 68.62. The rupee traded in a range between 68.75 and 68.57 after opening at 68.68.
10.30 am
Union Cabinet clears General Budget for 2016-17.

Budget test for PM
"I have an exam tomorrow. 125 crore citizens are going to test me as the Budget will be presented in Parliament," the PM said concluding his monthly radio address 'Mann Ki Baat’ on Sunday.
10.15 am
Stocks in focus
Gainers: Ahead of the Budget, SBI, Tata Steel, ICICI Bank, ONGC and Dr Reddy's were trading higher by 1-3 per cent on the BSE.
Losers: GAIL, Hero MotoCorp, Hindustan Unilever, Maruti and Cipla were down by 3.77- 1.5 per cent.

The Finance Minister must take steps to sustain momentum in government spending, says Kamlesh Rao, CEO, Kotak Securities
Budget humour
North Block, the entire team is getting serious about how to get funny. The FM has been braving suggestions on taglines that could scroll on the bottom of the TV screen whilst he would read the budget provisos. Read full opinion article by Manasi Phadke here
09.57 am
Pre-budget jitters sent the S&P BSE Sensex down 2.3 per cent last week. Worries that the government may overshoot its fiscal consolidation target caused nervousness. So did speculation that the Finance Minister may raise the period of holding of equity instruments to three years to qualify as long-term capital gain. Also, the monthly derivatives expiry on Thursday and the Railway Budget that showed many missed financial targets did not help. Whether today’s Budget has measures to bring much-needed cheer will be keenly watched.
09.50 am
Union Budget 2016 papers arrive at Parliament House. Photo: Kamal Narang
Rupee weakens
Ahead of the Budget presentation, the rupee was trading lower by 12 paise to quote at 68.74 against the dollar in early trade at the Interbank Foreign Exchange (forex) market today on month-end demand for the American currency from importers and banks.
The High Five Stocks
SBI, ITC, RIL, Infosys and Tata Steel. Read technical call here
Video: Interesting facts on Union Budget

9.40 am
The Budget speech and the document has two parts – Part A and B. Part A is the macroeconomic part of the budget where various schemes are announced, and allocations are made to several sectors. The priorities of the government are also announced in this part.
Reader's Poll
90% of our readers say the Finance Minister should loosen up the purse strings and spend to push growth. What's your opinion? Vote and comment here
9.25 am
Markets updateThe 30-share BSE index Sensex was up 1.36 points or 0.01 per cent at 23,155.66 in initial trade and the 50-share NSE index Nifty was down 5.65 points or 0.08 per cent at 7,024.10.
9.20 am
The Budget speech gives a bird’s eye view of the country’s fiscal situation. But if you need more information to understand the finer points, you need to go to the official Union Budget website . Here's a brief on the various sections in this website and what they contain, to help you navigate the site
9.15 am
Finance Minister has left North Block For Rashtrapati Bhavan
9.10 am
The Union Budget to be presented on Monday may not go the whole hog on the income-tax law simplification front. This is because the Centre-appointed income tax simplification committee headed by Justice RV Easwar is yet to submit its final report, official sources said. Read more

9.05 am
It’s the D-day and it is doubtful if anyone even wants to read the newspapers. Most investors and market watchers would be more preoccupied with reserving their favourite chair and getting chai-naashta ready for the Finance Minster’s speech. Read more

8.50 am
What to look for Intense lobbying precedes Union Budgets as all sections of the society jostle with each other to make their voices heard by the Finance Minister. Based on the wishlists, expectations and media reports, we have put together some pointers that you can look for in the Budget.




 
Published on February 29, 2016

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