Yesterday, finance minister Arun Jaitley presented the first budget of Prime Minister Narendra Modi’s government. Here are the key highlights:
Fiscal Deficit
* A fiscal deficit target of 4.1% of GDP for 2014/15 and 3.6% of GDP in 2015/16.
* “We cannot spend beyond our means”, said Jaitley
* India’s tax-to-GDP ratio is amongst the lowest in the world. Jaitley said this ratio must be raised.
* Approval of the highly anticipated good and services (GST) tax by the end of the year.
Taxation
* Income tax rates left unchanged.
* Personal tax exemption limit was raised from Rs 2 lakh to Rs 2.5 lakh.
* Exemption limit for senior citizens was raised from Rs 2.5 lakh to 3 lakh.
* Tax exemption limit under 80C and Public Provident Fund investment limit to Rs 1.5 lakh from Rs 1 lakh.
* Jaitley promised to maintain a stable tax environment but stopped short of scrapping rules on retrospective tax.
Growth
* The government is aiming for a sustained growth rate of 7-8 percent in the next 3-4 years.
* Plans to usher in policies for higher growth and lower inflation.
Subsidies
* Earmarked Rs 2.51 lakh crore as total payments towards subsidies.
* Food subsidy is Rs 1.15 lakh crore. Food subsidy includes Rs 25,000 crore towards the Food Security Act.
* Petroleum subsidy is Rs 63,427 crore.
* Fertilizers subsidy is Rs 72,970 crore.
Education
* Plans to set up four additional All India Institute of Medical Sciences, in Andhra Pradesh, West Bengal, Vidarbha, Maharashtra and Purvanchal, Uttar Pradesh. Rs 500 crore has been allocated for this.
* Five new Indian Institutes of Technology, in Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
* Five new Indian Institutes of Management, in Himachal Pradesh, Bihar, Punjab, Maharashtra and Odisha.
Agriculture
* Will focus on achieving 4% growth per year in agriculture.
* Plan to finance 5 lakh landless farmers through the National Bank for Agriculture and Rural Development.
* Rs 5,000 crore for short time rural credit refinance fund.
* Rs 100 crore set aside for Kisan Television, which will provide real-time information on various farming and agricultural issues.
* State governments will also be encouraged to develop farming markets.
* Rs 200 crore set aside for an agricultural universities in Andhra Pradesh and Rajasthan and horticulture universities in Haryana and Telangana.
Foreign Direct Investment
* FDI in defence sector raised from 26 percent to 49 percent.
* FDI in insurance sector from 26 percent to 49 percent.
Cheaper Goods
* Cosmetics, soaps
* Certain apparel, such as active-wear, gloves, skinny jeans, swimsuits and undergarments.
* Indian assembled/manufactured computers and laptops.
* Mobile SIMs
* Low-end television sets
* LED/LCDs below 19 inches
* Precious and semi-precious stones
* Footwear
* Solar equipment/products
* Radio cab services
Dearer Goods
* Cigarettes/cigars/tobacco products and pan masala.
* Aerated drinks drinks containing added sugar.
* Imported steel items.
Other Important Announcements
* Rs 100 crore set aside for a National Adaption Fund for climate change.
* Rs. 7,060 crore set aside to create 100 “smart cities.”
* An Arun Prabha channel for northeastern region has been announced and will be a 24/7 channel.
* Rs 50 crore set aside for a national police memorial.
* Rs 100 crore war memorial at Princess Park near India Gate in New Delhi.
* All government departments and ministries to be integrated through an e-platform by 31 December, 2014.
* A crisis management center for women in Delhi, with money coming from the Nirbhaya fund.
* Rs 100 crore set aside for community radio centres; 600 new and existing ones will be supported.
* Rs 100 crore set aside for a Beti Padhao, Beti Badhao Yojana.
* Schemes for disabled persons in the country, with 15 new braille presses and a revival of 10 existing ones.
* 24/7 power supply to all homes under the Deen Dayal Upadhyay Gram Jyoti Yojna for electricity supply to rural areas.
* Rs 200 crore for 'Statue of Unity' of Sardar Vallabh Patel.
* E-visas to be introduced at nine airports in India in phased manner.
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Fiscal Deficit
* A fiscal deficit target of 4.1% of GDP for 2014/15 and 3.6% of GDP in 2015/16.
* “We cannot spend beyond our means”, said Jaitley
* India’s tax-to-GDP ratio is amongst the lowest in the world. Jaitley said this ratio must be raised.
* Approval of the highly anticipated good and services (GST) tax by the end of the year.
Taxation
* Income tax rates left unchanged.
* Personal tax exemption limit was raised from Rs 2 lakh to Rs 2.5 lakh.
* Exemption limit for senior citizens was raised from Rs 2.5 lakh to 3 lakh.
* Tax exemption limit under 80C and Public Provident Fund investment limit to Rs 1.5 lakh from Rs 1 lakh.
* Jaitley promised to maintain a stable tax environment but stopped short of scrapping rules on retrospective tax.
Growth
* The government is aiming for a sustained growth rate of 7-8 percent in the next 3-4 years.
* Plans to usher in policies for higher growth and lower inflation.
Subsidies
* Earmarked Rs 2.51 lakh crore as total payments towards subsidies.
* Food subsidy is Rs 1.15 lakh crore. Food subsidy includes Rs 25,000 crore towards the Food Security Act.
* Petroleum subsidy is Rs 63,427 crore.
* Fertilizers subsidy is Rs 72,970 crore.
Education
* Plans to set up four additional All India Institute of Medical Sciences, in Andhra Pradesh, West Bengal, Vidarbha, Maharashtra and Purvanchal, Uttar Pradesh. Rs 500 crore has been allocated for this.
* Five new Indian Institutes of Technology, in Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
* Five new Indian Institutes of Management, in Himachal Pradesh, Bihar, Punjab, Maharashtra and Odisha.
The most-used terms in Jaitley’s speech
Agriculture
* Will focus on achieving 4% growth per year in agriculture.
* Plan to finance 5 lakh landless farmers through the National Bank for Agriculture and Rural Development.
* Rs 5,000 crore for short time rural credit refinance fund.
* Rs 100 crore set aside for Kisan Television, which will provide real-time information on various farming and agricultural issues.
* State governments will also be encouraged to develop farming markets.
* Rs 200 crore set aside for an agricultural universities in Andhra Pradesh and Rajasthan and horticulture universities in Haryana and Telangana.
Foreign Direct Investment
* FDI in defence sector raised from 26 percent to 49 percent.
* FDI in insurance sector from 26 percent to 49 percent.
Cheaper Goods
* Cosmetics, soaps
* Certain apparel, such as active-wear, gloves, skinny jeans, swimsuits and undergarments.
* Indian assembled/manufactured computers and laptops.
* Mobile SIMs
* Low-end television sets
* LED/LCDs below 19 inches
* Precious and semi-precious stones
* Footwear
* Solar equipment/products
* Radio cab services
Dearer Goods
* Cigarettes/cigars/tobacco products and pan masala.
* Aerated drinks drinks containing added sugar.
* Imported steel items.
Other Important Announcements
* Rs 100 crore set aside for a National Adaption Fund for climate change.
* Rs. 7,060 crore set aside to create 100 “smart cities.”
* An Arun Prabha channel for northeastern region has been announced and will be a 24/7 channel.
* Rs 50 crore set aside for a national police memorial.
* Rs 100 crore war memorial at Princess Park near India Gate in New Delhi.
* All government departments and ministries to be integrated through an e-platform by 31 December, 2014.
* A crisis management center for women in Delhi, with money coming from the Nirbhaya fund.
* Rs 100 crore set aside for community radio centres; 600 new and existing ones will be supported.
* Rs 100 crore set aside for a Beti Padhao, Beti Badhao Yojana.
* Schemes for disabled persons in the country, with 15 new braille presses and a revival of 10 existing ones.
* 24/7 power supply to all homes under the Deen Dayal Upadhyay Gram Jyoti Yojna for electricity supply to rural areas.
* Rs 200 crore for 'Statue of Unity' of Sardar Vallabh Patel.
* E-visas to be introduced at nine airports in India in phased manner.