Key Features of Budget 2014-2015

Thu Jul 10 2014, 18:00 hrs
The current economic situation and the challenges   Decisive vote for change represents the desire of the people to grow, free themselves from the curse of poverty and use the opportunity provided by the society. Country in no mood to suffer unemployment, inadequate basic amenities, lack of infrastructure and apathetic governance.  Challenging situation due to Sub five per cent growth and double digit inflation.  Continued slow-down in many emerging economies a threat to sustained global recovery.   Recovery seen with the growth rate of world economy projected at 3.6 per cent in 2014 vis-à-vis in 2013.  First budget of this NDA government to lay down a broad policy indicator of the direction in which we wish to take this country.  Steps announced are only the beginning of the journey towards a sustained growth of 7-8 per cent or above within the next 3-4 years along with macro-economic stabilization. Growing aspirations of people will be reflected in the development strategy of the Government led by the Prime minister Shri Narendra Modi and its mandate of “Sab ka Saath Sab ka Vikas”.  Need to revive growth in manufacturing and infrastructure sectors.  Tax to GDP ratio must be improved and Non-tax revenues increase   Read Full Report
The current economic situation and the challenges

Decisive vote for change represents the desire of the people to grow, free themselves from the curse of poverty and use the opportunity provided by the society. Country in no mood to suffer unemployment, inadequate basic amenities, lack of infrastructure and apathetic governance.
Challenging situation due to Sub five per cent growth and double digit inflation.
Continued slow-down in many emerging economies a threat to sustained global recovery.

Recovery seen with the growth rate of world economy projected at 3.6 per cent in 2014 vis-à-vis in 2013.
First budget of this NDA government to lay down a broad policy indicator of the direction in which we wish to take this country.

Steps announced are only the beginning of the journey towards a sustained growth of 7-8 per cent or above within the next 3-4 years along with macro-economic stabilization. Growing aspirations of people will be reflected in the development strategy of the Government led by the Prime minister Shri Narendra Modi and its mandate of “Sab ka Saath Sab ka Vikas”.

Need to revive growth in manufacturing and infrastructure sectors.
Tax to GDP ratio must be improved and Non-tax revenues increase Read Full Report

ECONOMIC INITIATIVES  Government to promote FDI selectively in sectors.  The composite cap of foreign investment to be raised to 49 per cent with full Indian management and control through the FIPB route.  The composite cap in the insurance sector to be increased up to 49 per cent from 26 per cent with full Indian management and control through the FIPB route.  Requirement of the built up area and capital conditions for FDI to be reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively for development of smart cities.  The manufacturing units to be allowed to sell its products through retail including E-commerce platforms.
ECONOMIC INITIATIVES
Government to promote FDI selectively in sectors.

The composite cap of foreign investment to be raised to 49 per cent with full Indian management and control through the FIPB route.

The composite cap in the insurance sector to be increased up to 49 per cent from 26 per cent with full Indian management and control through the FIPB route.

Requirement of the built up area and capital conditions for FDI to be reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively for development of smart cities.

The manufacturing units to be allowed to sell its products through retail including E-commerce platforms.

 Smart Cities and Real Estate:  A sum of Rs 7060 crore is provided in the current fiscal for the project of developing “one hundred Smart Cities  Incentives for Real Estate Investment Trusts (REITS). Complete pass through for the purpose of taxation.  A modified REITS type structure for infrastructure projects as the Infrastructure Investment Trusts (INVITS).  These two instruments to attract long term finance from foreign and domestic sources including the NRIs .
Smart Cities and Real Estate:

A sum of Rs 7060 crore is provided in the current fiscal for the project of developing “one hundred Smart Cities

Incentives for Real Estate Investment Trusts (REITS). Complete pass through for the purpose of taxation.

A modified REITS type structure for infrastructure projects as the Infrastructure Investment Trusts (INVITS).

These two instruments to attract long term finance from foreign and domestic sources including the NRIs .

Rural Development   Shyama Prasad Mukherji Rurban Mission for integrated project based infrastructure in the rural areas.   Rs 500 crore for “Deen Dayal Upadhyaya Gram Jyoti Yojana” for feeder separation to augment power supply to the rural areas.   Rs 14,389 crore provided for Pradhan Mantri Gram Sadak Yojna(PMGSY) .   More productive, asset creating and with linkages to agriculture and allied activities wage employment would to be provided under MGNREGA.    Under Ajeevika, the provision of bank loan for women SHGs at 4% to be extended to another 100 districts.   Initial sum of Rs100 crore for “Start Up Village Entrepreneurship Programme” for encouraging rural youth to take up local entrepreneurship programs .   Allocation for National Housing Bank increased to  Rs 8000 crore to support Rural housing.   New programme “Neeranchal” to give impetus to watershed development in the country with an initial outlay of Rs 2142 crores.   Backward Region Grant Fund (BRGF) to be restructured to address intra-district inequalities.
Rural Development

Shyama Prasad Mukherji Rurban Mission for integrated project based infrastructure in the rural areas.

Rs 500 crore for “Deen Dayal Upadhyaya Gram Jyoti Yojana” for feeder separation to augment power supply to the rural areas.

Rs 14,389 crore provided for Pradhan Mantri Gram Sadak Yojna(PMGSY) .

More productive, asset creating and with linkages to agriculture and allied activities wage employment would to be provided under MGNREGA.

Under Ajeevika, the provision of bank loan for women SHGs at 4% to be extended to another 100 districts.

Initial sum of Rs100 crore for “Start Up Village Entrepreneurship Programme” for encouraging rural youth to take up local entrepreneurship programs .

Allocation for National Housing Bank increased to Rs 8000 crore to support Rural housing.

New programme “Neeranchal” to give impetus to watershed development in the country with an initial outlay of Rs 2142 crores.

Backward Region Grant Fund (BRGF) to be restructured to address intra-district inequalities.

Women & Child Development:    Outlay of Rs 50 crores for pilot testing a scheme on “Safety for Women on Public Road Transport”.   Sum of Rs 150 crores on a scheme to increase the safety of women in large cities.   “Crisis Management Centres” in all the districts of NCT of Delhi this year government and private hospitals.   A sum of Rs 100 crore is provided for “Beti Bachao, Beti Padhao Yojana”, a focused scheme to generate awareness and help in improving the efficiency of delivery of welfare services meant for women.   School curriculum to have a separate chapter on gender mainstreaming
Women & Child Development:

Outlay of Rs 50 crores for pilot testing a scheme on “Safety for Women on Public Road Transport”.

Sum of Rs 150 crores on a scheme to increase the safety of women in large cities.

“Crisis Management Centres” in all the districts of NCT of Delhi this year government and private hospitals.

A sum of Rs 100 crore is provided for “Beti Bachao, Beti Padhao Yojana”, a focused scheme to generate awareness and help in improving the efficiency of delivery of welfare services meant for women.

School curriculum to have a separate chapter on gender mainstreaming

Urban Development   Vision of the Government is that 500 urban habitations to be provided support for renewal of infrastructure and services in next 10 years through PPPs   Present corpus of Pooled Municipal Debt Obligation Facility facility to be enlarged to   Rs 50,000 Crore from Rs 5000 crore.   Rs 100 crore provided for Metro Projects in Lucknow and Ahmadabad
Urban Development

Vision of the Government is that 500 urban habitations to be provided support for renewal of infrastructure and services in next 10 years through PPPs

Present corpus of Pooled Municipal Debt Obligation Facility facility to be enlarged to

Rs 50,000 Crore from Rs 5000 crore.

Rs 100 crore provided for Metro Projects in Lucknow and Ahmadabad

Housing:    Extended additional tax incentive on home loans shall be provided to encourage people,especially the young, to own houses.   Mission on Low Cost Affordable Housing anchored in the National Housing Bank to be set up.   A sum of Rs 4000 crores for NHB from the priority sector lending shortfall with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/ LIG segment is provided   Slum development to be included in the list of Corporate Social Responsibility (CSR) activities to encourage the private sector to contribute more
Housing:

Extended additional tax incentive on home loans shall be provided to encourage people,especially the young, to own houses.

Mission on Low Cost Affordable Housing anchored in the National Housing Bank to be set up.

A sum of Rs 4000 crores for NHB from the priority sector lending shortfall with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/ LIG segment is provided

Slum development to be included in the list of Corporate Social Responsibility (CSR) activities to encourage the private sector to contribute more

Industry:   Central Government Departments and Ministries to integrate their services with the e-Biz -a single window IT platform- for services on priority by 31 December this year.   Rs 100 crore provided for setting up a National Industrial Corridor Authority.   Amritsar Kolkata Industrial master planning to be completed expeditiously.   Master planning of 3 new smart cities in the Chennai-Bengaluru Industrial Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka to be completed.   Perspective plan for the Bengaluru Mumbai Economic corridor (BMEC) and Vizag-Chennai corridor to be completed with the provision for 20 new industrial clusters.   Development of industrial corridors with emphasis on Smart Cities linked to transport connectivity to spur growth in manufacturing and urbanization will be accelerated.   Proposed to establish an Export promotion Mission to bring all stakeholders under one umbrella.   Apprenticeship Act to be suitably amended to make it more responsive to industry and youth
Industry:

Central Government Departments and Ministries to integrate their services with the e-Biz -a single window IT platform- for services on priority by 31 December this year.

Rs 100 crore provided for setting up a National Industrial Corridor Authority.

Amritsar Kolkata Industrial master planning to be completed expeditiously.

Master planning of 3 new smart cities in the Chennai-Bengaluru Industrial Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka to be completed.

Perspective plan for the Bengaluru Mumbai Economic corridor (BMEC) and Vizag-Chennai corridor to be completed with the provision for 20 new industrial clusters.

Development of industrial corridors with emphasis on Smart Cities linked to transport connectivity to spur growth in manufacturing and urbanization will be accelerated.

Proposed to establish an Export promotion Mission to bring all stakeholders under one umbrella.

Apprenticeship Act to be suitably amended to make it more responsive to industry and youth

New & Renewable Energy:    Rs 500 crores provided for Ultra Mega Solar Power Projects in Rajasthan, Gujarat,Tamil Nadu, Andhra Pradesh and Ladakh.   Rs 400 crores provided for a scheme for solar power driven agricultural pump sets and water pumping stations.   Rs 100 crore provided for the development of 1 MW Solar Parks on the banks of canals.   A Green Energy Corridor Project is being implemented to facilitate evacuation of renewable energy across the country
New & Renewable Energy:

Rs 500 crores provided for Ultra Mega Solar Power Projects in Rajasthan, Gujarat,Tamil Nadu, Andhra Pradesh and Ladakh.

Rs 400 crores provided for a scheme for solar power driven agricultural pump sets and water pumping stations.

Rs 100 crore provided for the development of 1 MW Solar Parks on the banks of canals.

A Green Energy Corridor Project is being implemented to facilitate evacuation of renewable energy across the country

Petroleum & Natural Gas: * Production and exploitation of Coal Bed Methane reserves will be accelerated.    Possibility of using modern technology to revive old or closed wells to be explored.   Usage of PNG to be rapidly scaled up in a Mission mode.   Proposal to develop pipelines using appropriate PPP models
Petroleum & Natural Gas: * Production and exploitation of Coal Bed Methane reserves will be accelerated.

Possibility of using modern technology to revive old or closed wells to be explored.

Usage of PNG to be rapidly scaled up in a Mission mode.

Proposal to develop pipelines using appropriate PPP models

FINANCIAL SECTOR:    Ongoing process of consultations with all the stakeholders on the enactment of the Indian Financial Code and reports of the Financial Sector Legislative Reforms Commission (FSLRC) to be completed. Government in close consultation with the RBI to put in place a modern monetary policy framework.   Following measures will be taken to energize Capital markets:   Introduction of uniform KYC norms and inter-usability of the KYC records across the entire financial sector.   Introduce one single operating demat account    Uniform tax treatment for pension fund and mutual fund linked retirement plan
FINANCIAL SECTOR:

Ongoing process of consultations with all the stakeholders on the enactment of the Indian Financial Code and reports of the Financial Sector Legislative Reforms Commission (FSLRC) to be completed. Government in close consultation with the RBI to put in place a modern monetary policy framework.

Following measures will be taken to energize Capital markets:

Introduction of uniform KYC norms and inter-usability of the KYC records across the entire financial sector.

Introduce one single operating demat account

Uniform tax treatment for pension fund and mutual fund linked retirement plan

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