From agriculture to real estate: Snapshot of Arun Jaitley’s budget

By: | Updated: February 29, 2016 6:48 PM

In a 101 minute Budget speech, Finance Minister Arun Jaitley touched upon various subjects impacting the taxpayer, the common man, the investor, businesses and markets.

Union Budget 2016In a 101 minute Budget speech, Finance Minister Arun Jaitley touched upon various subjects impacting the taxpayer, the common man, the investor, businesses and markets. (Photo: Photo)

In a 101 minute Budget speech, Finance Minister Arun Jaitley touched upon various subjects impacting the taxpayer, the common man, the investor, businesses and markets.

Here we list out some of the major announcements across sectors that have a bearing on the economy and personal finances.

Agriculture

The government aims to reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. The proposed allocation for agriculture and farmers’ welfare
is Rs 35,984 crore.

Out of 141 million hectares of net cultivated area in the country, only 46 per cent is covered with irrigation. The ‘Pradhan Mantri Krishi Sinchai Yojana’ has been strengthened and will be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation under this Scheme.

Long Term Irrigation Fund will be created in NABARD with an initial corpus of about Rs 20,000 crore. To achieve all these, a total provision of Rs 12,517 crore has been made through budgetary support and market borrowings in 2016-17.

Incentives are being given for enhancement of pulses production. Rs 500 crores under National Food Security Mission has been assigned to pulses. The number of districts covered has been increased to 622.

Special focus has been given to ensure adequate and timely flow of credit to the farmers. The government has approved the Crop Insurance Scheme, namely, Prime Minister Fasal Bima Yojana. For effective implementation of this Scheme, a sum of Rs 5,500 crore has been provided in the Budget 2016-17.

Health

In a measure to empower women and protect their health, FM proposed to provide LPG connection in the name of women members of poor households. For the same, the government has set aside a sum of Rs 2,000 crore in this year’s Budget to meet the initial cost of providing these LPG connections.

In order to help poor and economic weak section, the government will launch a new health protection
scheme which will provide health cover up to Rs 1 lakh per family. For senior citizens of age 60 years and above belonging to this category, an additional top-up package up to Rs 30,000 will be provided.

In a move to supply medicines at affordable prices, the government will reinvigorate the supply of generic drugs. 3,000 stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.

Education

An increasing share of allocation under Sarva Shiksha Abhiyan will be allocated to improve the quality of education. Further, 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years.

The government has also decided to set up a Higher Education Financing Agency with an initial capital base of Rs 1,000 crores.

The government has also decided to set up 1,500 multi skill training institutes across the country.

Human Resource
In order to incentivise creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33 per cent for all new employees enrolling in EPFO for the first three years of their employment. This will incentivise the employers to recruit unemployed persons and also to bring into the books the informal employees. In order to channelise this intervention towards the target group of semi-skilled and unskilled workers, the scheme will be applicable to those with salary up to Rs 15,000 per month. The budget has made a provision of Rs 1,000 crore for this scheme.

About 35 million jobs seekers have registered on National Career Service platform. The budget proposed to make 100 Model Career Centres operational by the end of 2016-17. FM also proposed to inter-link State Employment Exchanges with the National Career Service platform.

Infrastructure

The government also proposed to allocate Rs 55,000 crore in the Budget for roads and highways. This will be further topped up by additional Rs 15,000 crore to be raised by NHAI through bonds. Thus the total investment in the road sector, including PMGSY allocation, would be
Rs 97,000 crore during 2016-17. Together with the capital expenditure of the railways, the total outlay on roads and railways will be Rs 2.18 lakh crore in 2016-17.

In the civil aviation sector, the government is drawing up an action plan for revival of unserved and underserved airports. There are about 160 airports and air strips with State Governments which can be revived at an indicative cost of Rs 50 crore to Rs 100 crore each. The government will partner with the State Governments to develop some of these airports for regional connectivity.

In order to grow infrastructure spending further, government will permit mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority through raising of Bonds during 2016-17.

Financial Sector

New derivative products will be developed by the market regulator Securities and Exchange Board od India, or Sebi, in the Commodity Derivatives market.

Rate of Securities Transaction tax in case of ‘Options’ is proposed to be increased from 0.017 per cent to .05 per cent.

To tackle the problem of stressed assets in the banking sector, Asset Reconstruction Companies (ARCs) have a very important role. Arun Jaitley also proposed to make necessary amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100 per cent stake in the ARC and permit non-institutional investors to invest in Securitisation Receipts.

He also proposed an allocation of Rs 25,000 crore in BE 2016-17 towards recapitalisation of Public Sector Banks.

Real Estate

In order to fuel activity in the housing sector, FM proposed to give 100 per cent deduction for profits to an undertaking from a housing project for flats upto 30 sq metres in four metro cities and 60 sq metres in other cities, approved during June 2016 to March 2019, and is completed within three years of the approval. Minimum Alternate Tax will, however, apply to these undertakings.

To benefit the first-home buyers, Jaitley said to provide deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17, provided the value of the house does not exceed Rs 50 lakh.

Personal Finance

In order to reduce tax burden on individuals with income not exceeding Rs 5 lakhs, Jaitley proposed to raise the ceiling of tax rebate under section 87A from Rs 2,000 to Rs 5,000. There are 2 crore tax payers in this category who will get a relief of Rs 3,000 in their tax liability.

The people who do not have any house of their own and also do not get any house rent allowance from any employer get a deduction of Rs 24,000 per annum from their income to compensate them for the rent they pay. The limit of deduction in respect of rent paid under section 80GG will be increased from Rs 24,000 per annum to Rs 60,000 per annum, which should provide relief to those who live in rented houses.

Jaitley also proposed to exempt service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.

There will be a reduction in service tax on Single premium Annuity (Insurance) Policies from 3.5 per cent to 1.4 per cent of the premium paid in certain cases.

There will be increase in surcharge from 12 per cent to 15 per cent on persons, other than companies, firms and cooperative societies having income above Rs 1 crore.

Budget 2016-17 has increased excise duty on jewellery and branded garments by 1 per cent and 2 per cent, respectively.

 

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition