First full budget of Arun Jaitley puts focus on investment and job creation
GN Bureau | February 28, 2015
Announcing a budget aimed at high growth finance minister Arun Jaitley delivered his first full-year budget with proposals to boost investment and benefits to ordinary people.
"India is about to take off," Jaitley said as growth would accelerate to 8-8.5% in the fiscal year starting in April. “The world is predicting that this is India's chance to fly."
In one single speech, Jaitley announced a monetary policy overhaul, a bankruptcy code and the creation of a public debt management agency.
The finance minister sat down around 20 minutes into his speech and delivered a stand out budget as spoke about job creation and infrastructure building.
"Budget indicates our commitment to ensure that development of Eastern & Northeastern parts of India gets an impetus & drives future growth… I congratulate FM for doing an excellent job in respecting aspirations of the States & at the same time delivering on National priorities (sic)," Prime Minister Narendra Modi tweeted after Jaitley's speech. "From housing for all, jobs, health, education & total electrification, FM laid down goals to be achieved by 2022, India's Amrut Mahotsav," he added.
Jaitley said the government was committed to tracing black money stashed abroad and a comprehensive new law will be framed to track it. "On black money, a new structure including e-filing and tracking down is our abiding commitment," the finance minister said.
He said a "comprehensive new law to track black money" would be framed. He also said there will be rigorous imprisonment of 10 years under black money law. The finance minister said a benami property transaction bill will be brought to tackle black money transactions in real estate.
On direct tax, Jaitley reduced corporate tax to 25% over four years from a current 30%, with a view to boosting spending and job creation.
"Individual taxpayers can benefit up to Rs.4.44 lakh from fresh exemptions," Jaitley said even as he skipped income tax slab changes. This is due to hike in exemption limit of health insurance and contributions to pension scheme. Transport allowance exemption was increased from Rs 800 to Rs 1, 600 per month.
Full budget: http://indiabudget.nic.in/
Here are some highlights:
•Social security systems for all poor and an affordable insurance policy for the poor is also being promised. Measure to bring in more equity. Atal Pension Yojana will provide defined pension according to contribution ; 50% contribution to be from the government.
• Infrastructure outlays for roads and railways go up. Investment in infrastructure will go up by Rs 70000 crore in 2015/16 over last year.
• Rs 1,000 crore corpus for establishing a mechanism to facilitate startups.
• Gold monetisation scheme to allow investors to earn interest in metal account. Also says an alternative sovereign gold bond to replace physical gold. Jaitley also proposes to work on developing Indian gold coin which carries the Ashok Chakra to help recycle gold available in country.
• Employees EPF contribution may become optional.
• Different types of foreign investment and replace them with composite caps.
• Another Rs 1,000 crore committed to the Nirbhaya Fund.
• Jaitley proposes increase in Visa on Arrivals to 150 countries from its current 43 in an attempt to boost tourism.
• Dispute of resolution bill to be set to see that stuck projects can be unlocked.
• AIIMS all India institute of medical sciences) to be set up in J&K, Punjab, Tamil Nadu, HP and Assam. Indian Institute of Managements in J&K and Andhra Pradesh.
• India ups defence budget to Rs 2,46,727 crore.
• Corproate tax reduced to 25 percent from the current 30 percent over the next four years.
• Black money law shall be implemented by next year: Foreign Exchange Management Act and Money Laundering Act will be amended in relation to confiscation of assets.
• Custom duty reduced on 22 items.
• Replacement of wealth tax with additional 2% surcharge on super rich ( those earning above Rs 1 crore in a year).
• Pan Number quoting made compulsory for transactions more than Rs 1 lakh.
• Service tax has been raised from 12.3 percent to 14 percent.
• Clean energy cess increased from Rs 100 to 200 per metric tonne of coal to finance Green Energy Fund.
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