Highlights of budget 2015

Posted on 02nd Mar 2015 | 1046 views

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India's Finance Minister Arun Jaitley announced the budget 2015. Here the highlights of budget 2015: Fiscal deficit seen at 3.9 per cent of GDP in 2015/16 Will meet the challenging fiscal target of 4.1 per cent of GDP Remain committed to meeting medium term fiscal deficit target of 3 per cent of GDP Current account deficit below 1.3 per cent of GDP Growth GDP growth seen at between 8 per cent and 8.5 per cent y/y Aiming double digit growth rate, achievable soon Inflation Expects consumer inflation to remain close to 5 per cent by March, opening room for more monetary policy easing monetary policy framework agreement with the RBI clearly states objective of keeping inflation below 6 per cent Revenues * Revenue deficit seen at 2.8 per cent of GDP * Non tax revenue seen at Rs 2.21 trillion * Agricultural incomes are under stress Disinvestment * Government targets Rs 410 billion from stake sales in companies * Total stake sale in 2015/16 seen at Rs 695 billion

Highlights of budget 2015

Market reforms * Propose to merge commodities regulator with SEBI * To bring a new bankruptcy code * To set up public debt management agency * Proposes to introduce a public contract resolution of disputes bill * To establish an autonomous bank board bureau to improve management of public sector banks Policy reforms * To enact a comprehensive new law on black money * Propose to create a universal social security system for all Indians * To launch a national skills mission soon to enhance employability of rural youth * To raise visa-on-arrival facility to 150 countries from 43 * Allocates Rs 346.99 billion for rural employment guarantee scheme

Borrowing * Gross market borrowing seen at Rs 6 trillion * Net market borrowing seen at Rs 4.56 trillion General anti-avoidance rules (GAAR) * Government defers rollout of anti-tax avoidance rules GAAR by two years * GAAR to apply prospectively from April 1, 2017 * Retrospective tax provisions will be avoided Taxation * To abolish wealth tax * Replaces wealth tax with additional 2 per cent surcharge on super rich * Proposes to cut to 25 per cent corporate tax over next four years * Corporate tax of 30 per cent is uncompetitive * Net gain from tax proposals seen at Rs 150.68 billion * Proposes to rationalise capital gains tax regime for real estate investment trusts * Expects to implement goods and services tax by April 2016 * To reduce custom duty on 22 items * Basic custom duty on commercial vehicle doubled to 20 per cent * Proposes to increase service tax rate and education cess to 14 per cent from 12.36 per cent * Plans to introduce direct tax regime that is internationally competitive on rates without exemptions * Exemptions for individual tax payers to continue * To enact tough penalties for tax evasion in new bill * Tax department to clarify indirect transfer of assets and dividend paid by foreign firms

Infrastructure * Investment in infrastructure will go up by Rs 700 billion in 2015/16 over last year * Plans to set up national investment infrastructure fund * Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects * Proposes 5 "ultra mega" power projects for 4,000MW each * Second unit of Kudankulam nuclear power station to be commissioned * Will need to build additional 100,000km of road * Ports in public sector will be encouraged to corporatise under Companies Act Expenditure * Plan expenditure estimated at about Rs 4.65 trillion * Non-plan expenditure seen at about Rs 13.12 trillion * Allocates Rs 2.46 trillion for defence spending * Allocates Rs 331.5 billion for health sector * If revenue improves, hope to raise budgeted allocations for rural job scheme by Rs 50 billion

Investment * Propose to do away with different types of foreign investment caps and replace them with composite caps * To allow foreign investment in alternative investment funds * Public investment needed to catalyse investment Gold * To develop a sovereign gold bond * To introduce gold monetisation scheme to allow depositors to earn interest * To introduce Indian-made gold coin to reduce demand for foreign gold coins Subsidies * Food subsidy seen at Rs 1.24 trillion * Fertiliser subsidy seen at Rs 729.69 billion * Fuel subsidy seen at Rs 300 billion

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