Finance Minister Arun Jaitley outlined the economic agenda of the ruling Narendra Modi-led government in his third budget presented in the Lok Sabha Monday. The budget was considered by many experts as being pro-poor and focusing extensively on the farming sector.
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Jaitley also reiterated a forecast that India would grow by 7.6 percent in the fiscal year that is drawing to a close. He said the government wanted to spread the benefits of growth more widely among India’s 1.3 billion people, but that he would stick to the government’s existing fiscal deficit target for the coming year.
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However, the markets have not been enthused with the budget, dropping several points in the course of Jaitley’s speech.
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Nevertheless, for our readers to get a quick glimpse of what the budget entails, we list the top 10 announcements made by the Finance Minister.
1. Government plans to launch a new initiative to provide cooking gas to BPL families with state support. Remember, the #GiveUp campaign that the government had earlier introduced invoking people who don’t need LPG connections to give them up. Jaitley said over 75 lakh people had given up their subsidies.
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2. Pointing out the government’s focus on the agricultural sector, Jaitley has allocated Rs 35,984 crores for the farming sector. The minister announced that 5 lakh acres will be brought under organic farming in the next three years under the Krishi Vikas Yojana. Read More
3. Rs 38,500 crore has been allocated for MNREGA – the job scheme that was introduced by the earlier UPA government. This is the highest-ever allocation the scheme has gotten. Remember, this is the scheme that was called a ‘living monument of the failures of UPA’ by Prime Minister Narendra Modi.
4. The government proposes to allocate Rs 97,000 crore allocation for road sector including rural
roads. This is a boost for Surface Transport Minister Nitin Gadkari who has pledged to substantially increase the number of kilometres of roads built per day.
5. The minister said 160 airports and airstrips in the country can be revived at a cost of Rs 50-100 crore each. There are a number of airports in tier-II cities and towns which are not utilized to their full potential. Read more
Also read: Modi calls Budget pro-poor
6. The government came out with one time four-month compliance window for domestic black money holders to come clean by paying tax and penalty of 45 per cent. The government plans to open the compliance window under the Income Tax Disclosure Scheme from June 1 to September 30 2016 with option to pay amount due within 2 months of declaration. Read more
7. Cigarettes and tobacco products will become costlier with an increase of excise duty by 10-15%. In the last budget too, the prices of cigarettes were increased.
8. While there are no changes in personal income tax slabs, the ceiling of tax rebate for tax-payers with up to Rs 5 lakh annual will be raised to Rs 5000 from Rs 2000 currently. For the benefit of those living in rented houses, the deduction for rent paid will be raised from Rs 20,000 to Rs 60,000.
9. To boost the start-up culture, the companies will get 100 per cent tax exemption for three years except MAT which will apply from April 2016-2019 for creation of jobs. Remember, the Startup India campaign was launched by the Prime Minister earlier this year amid much fanfare.
10. Financial sector reforms were one of the nine pillars of Arun Jaitley’s budget. The minister declared that a comprehensive bankruptcy code will be enacted as part of reforms in the financial sector.
Read the full Budget 2016 document below