Date of Announcement: 29th February 2016
Venue: Parliament of India
By: Finance Minister Arun Jaitley. It was his 3rd budget.
Theme and Agenda: Transform India.
Four Pillars of the budget:
- Expansion of universal social security.
- Job creation with various associated programmes like ‘Make in India’, ‘Skill India’, ‘Start-up India’ etc.
- Simplifying the tax structure.
Vision of the budget: By 2022 farmers’ income will be doubled. Finance Minister allotted Rs 36,000 crore for the farm sector while raising the agri-credit target to Rs 9 lakh crore for the next fiscal. He also allocated Rs 15,000 crore for interest subvention on the farm credit, Rs 5,500 crore for the new crop insurance scheme and Rs 500 crore to boost pulses output.
The Budget documents presented to the Parliament comprise, besides the Finance Minister’s Budget Speech, the following:
- Annual Financial Statement (AFS).
- Demands for Grants (DG).
- Appropriation Bill.
- Finance Bill.
- Memorandum Explaining the Provisions in the Finance Bill, 2016.
- Macro-economic framework for the relevant Financial Year.
- Fiscal Policy Strategy Statement for the Financial Year.
- Medium Term Fiscal Policy Statement.
- Medium Term Expenditure Framework Statement.
- Expenditure Budget Volume-1.
- Expenditure Budget Volume-2 (Part A and Part B).
- Concordance Tables to the Expenditure Budget Volume-2.
- Receipts Budget.
- Budget at a Glance.
- Highlights of Budget.
You can look on each detail here.
Budget Highlights for Exam
# No change in the tax slab.
# Growth of Economy accelerated to 7.6 per cent in 2015-16.
# Growth rate for 2016 is 13%.
# Foreign exchange reserves touched highest ever level of about 350 billion US dollars.
# Despite increased devolution to States by 55 per cent as a result of the 14th Finance Commission award, plan expenditure increased at RE stage in 2015-16 – in contrast to earlier years.
# New initiative to be launched to provide cooking gas to BPL families with state support.
# Significant reforms to be undertaken for passage of insolvency and bankruptcy.
# 5 lakh acres of land to be brought under Organic farming in three years under Krishi Vikas Yojana
# A term irrigation fund to be created in NABARD with a corpus of Rs 20,000 crore.
# Under the Pradhan Mantri Krishi Sichai Yojana, 28.5 hectares will be brought under irrigation sector.
# Two schemes launched to increase crop yield in rainfed areas to promote organic farming.
# Rs 60,000 crore for recharging of ground water table.
# Government to set apart Rs 412 crore to encourage organic farming.
# Rs 2.87 lakh crore to be given grant-in-aid for gram panchayats and municipalities in order to boost economy.
# Rs 19,000 crore allocated for Pradhan Mantri Gramin Sadak Yojana in 2016-17.
# For crop insurance scheme, the government will allocate Rs 5,500 crore.
# Government to spend Rs 850 crore in a few years on animal husbandry, cattle and livestock breeding.
# Rs 38,500 cr allocated for MNREGA in 2016-17. It will be the highest ever if entire amount is spent.
# Rs 9000 crore allotted to Swachch Bharat Mission.
# Government committed to achieving 100% electrification of villages by May 2018.
# Digital literacy scheme to be launched to cover 6 crore additional rural households.
# Rs 87,765 crore allocated for rural development.
# Rs 1000 crore to be provided for LPG connection to rural households in name of women. This scheme is supposed to go on for 2 years to cover 5 crore BPL families.
# Government to create digital depository for school leaving certificates.
# Skill development: 1 crore youth to be skilled over next 3 years.
# Government to spend Rs 1,700 crore to set up 1,500 multi-skill training institutes.
# Government to pay 8.33% towards employee pension fund.
# 85% of stuck road projects have been put back on track.
# Daily working hours and weekly hours for employees of malls and small shops will be regulated.
# Shopping malls to be allowed to open on all seven days of the week.
# Rs 97,000 crore allocation for road sector.
# Total outlay for infrastructure at Rs 2.21 lakh crore for 2016-17.
# 2,000 km of state highways to be converted into national highways.
# Total allocation for road and rail in 2016-17 is Rs 2.18 lakh crore.
# Rs 8000 crore provided for Sagarmala project that is aimed at port-led development in coastal areas.
# 160 airports and airstrips can be revived at a cost of Rs 50-100 crore each.
# A new credit rating system to be developed for infrastructure.
# More FDI reforms proposed in insurance, pension, asset restructuring companies and stock markets.
# Government to allow 100% FDI through FIPB in the marketing of food products produced and manufactured in India.
# Ceiling of tax rebate for taxpayers with up to Rs 5 lakh annual come to be raised to Rs 5000 from Rs 2000 currently.
# Rs 25,000 crore to be provided for recapitalisation of public sector banks.
# Government announced deduction for rent paid to be raised to Rs 60,000 to Rs 20,000 to benefit those living in rented houses.
# People who don’t have any houses of their own or don’t get house compensation from employers get rebate of Rs 24,000 per annum.
# Loans: For first time home buyers, an additional deduction of Rs 50,000 on interest will be levied for loans up to Rs 35 lakh for property not exceeding Rs 50 lakh.Rs 50,000 on interest will be levied for loans up to Rs 35 lakh for property not exceeding Rs 50 lakh.Rs 50,000 on interest will be levied for loans up to Rs 35 lakh for property not exceeding Rs 50 lakh.
# Government to increase ATMs, micro-ATMs in post offices in next 3 years.
# Government eyes Rs 1,80,000 crore credit target through Mudra bank in 2016-17.
# Service Tax will be exempted on general insurance schemes under NIRMAYA Scheme.
# Government to introduce bill to amend Companies Act for ease of doing business.
# Government to enable registration of companies in a day.
# New manufacturing companies incorporated after March 2016 will be given option of being taxed at 25% plus cess plus surcharges.
# Government to allocate Rs 100 crore each for celebrating birth anniversaries of Guru Gobind Singh and Deen Dayal Upadhyay.
# Start-ups to get 100% tax exemption for 3 years except MAT which will apply from April 2016-2019 for creation of jobs.
# Clean energy cess increased from Rs 200/ton to 400/ton on coal, lignite and peat.
# A fund of Rs 900 crore started for stabilising market crisis of pulses.
# Committed to implement GAAR from April 1, 2017.
# Jaitley accepts Rahul Gandhi’s suggestion of giving tax exemption to Braille paper.
# 0.5% Krishi Kalyan Cess to be levied on all services.
# Excise 1% imposed on articles of jewellery excluding silver.
# Cars to get costlier as pollution cess of 1% will be levied on small petrol, CNG and LPG cars. Cess of 2.5% to be levied on diesel cars of certain specifications and 4% cess to be levied on higher capacity vehicles such as SUVs.
# 15% surcharge on income above Rs 1 crore.
# Excise duty on Tobacco products increased by 10-15%.
# Tax on black money declared will be 30% plus 7.5% penalty and 7.5% surcharge.
# Government to simplify customs baggage rules for international travellers.
# Allocation for Agriculture and Farmers’ welfare is Rs 35,984 crore
# ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
#Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked
#A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of ab ..
# Programme for sustainable management of ground water resources with an estimated cost of Rs 6,000 crore will be implemented through multilateral funding
# 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up under MGNREGA
#Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.
# 2,000 model retail outlets of Fertilizer companies will be provided with soil and se ..
#Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and ‘Organic Value Chain Development in North East Region’.
#Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets
#Allocation under Pradhan Mantri Gram Sadak Yojana increased to Rs 19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.
#To reduce the burden of loan repayment on farmers, a provision of Rs 15,000 crore has ..
#Allocation under Prime Minister Fasal Bima Yojana Rs 5,500 crore.
#Rs 850 crore for four dairying projects – ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds
#Allocation for rural sector – Rs 87,765 crore.
#Rs 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
#Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission
#A sum of Rs 38,500 crore allocated for MGNREGS.
#300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission
#100 per cent village electrification by 1st May, 2018.
#District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes.
#Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation.
#A new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years.
#National Land Record Modernisation Programme has been revamped.
#New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of Rs 655 crore.
Social sector and Health care
#Allocation for social sector including education and health care – Rs 1,51,581 crore.
#Rs 2,000 crore allocated for initial cost of providing LPG connections to BPL families.
#New health protection scheme will provide health cover up to Rs One lakh per family. For senior citizens an additional top-up package up to Rs 30,000 will be provided.
#3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
# ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode
#”Stand Up India Scheme” to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs.
#National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry associations
#Allocation of Rs 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru Gobind Singh.
Education,Skill development and Job creation
#62 new Navodaya Vidyalayas will be opened
#Sarva Shiksha Abhiyan to increasing focus on quality of education
#Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions
#Higher Education Financing Agency to be set-up with initial capital base of Rs 1000 Crores.
#Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be set-up.
#Allocation for skill development – Rs 1804 crore.
#1500 Multi Skill Training Institutes to be set-up.
#National Board for Skill Development Certification to be setup in partnership with the industry and academia
#Entrepreneurship Education and Training through Massive Open Online Courses
#GOI will pay contribution of 8.33 per cent for of all new employees enrolling in EPFO for the first three years of their employment. Budget provision of Rs 1000 crore for this scheme.
#Deduction under Section 80JJAA of the Income Tax Act will be available to all assesses who are subject to statutory audit under the Act
#100 Model Career Centres to operational by the end of 2016-17 under National Career Service.
#Model Shops and Establishments Bill to be circulated to States.
Infrastructure and investment
#Total investment in the road sector, including PMGSY allocation, would be Rs 97,000 crore during 2016-17.
#India’s highest ever kilometres of new highways were awarded in 2015. To approve nearly 10,000 kms of National Highways in 2016-17.
#Allocation of Rs 55,000 crore in the Budget for Roads. Additional Rs 15,000 crore to be raised by NHAI through bonds.
#Total outlay for infrastructure – Rs 2,21,246 crore.
#Amendments to be made in Motor Vehicles Act to open up the road transport sector in the passenger segment
#Action plan for revival of unserved and underserved airports to be drawn up in partnership with State Governments.
#To provide calibrated marketing freedom in order to incentivise gas production from deep-water, ultra deep-water and high pressure-high temperature areas > Comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation to be drawn up.
#Steps to re-vitalise PPPs:
#Public Utility (Resolution of Disputes) Bill will be introduced during 2016-17
#Guidelines for renegotiation of PPP Concession Agreements will be issued
#New credit rating system for infrastructure projects to be introduced
#Reforms in FDI policy in the areas of Insurance and Pension, Asset Reconstruction Companies, Stock Exchanges.
#100 per cent FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India.
#A new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale, approved.
Financial sector reforms
#A comprehensive Code on Resolution of Financial Firms to be introduced.
#Statutory basis for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016.
#A Financial Data Management Centre to be set up.
#RBI to facilitate retail participation in Government securities.
#New derivative products will be developed by SEBI in the Commodity Derivatives market.
#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 Securitization Receipts.
#Comprehensive Central Legislation to be bought to deal with the menace of illicit deposit taking schemes.
#Increasing members and benches of the Securities Appellate Tribunal.
#Allocation of Rs 25,000 crore towards recapitalisation of Public Sector Banks.
#Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs 1,80,000 crore.
#General Insurance Companies owned by the Government to be listed in the stock exchanges.
Business and Finance
#A Task Force has been constituted for rationalisation of human resources in various Ministries.
#Comprehensive review and rationalisation of Autonomous Bodies.
#Bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar framework to be introduced.
#Introduce DBT on pilot basis for fertilizer.
#Automation facilities will be provided in 3 lakh fair price shops by March 2017.
#Amendments in Companies Act to improve enabling environment for start-ups.
#Price Stabilisation Fund with a corpus of Rs 900 crore to help maintain stable prices of Pulses.
#”Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism.
#Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9 per cent and 3.5 per cent. > Revenue Deficit target from 2.8 per cent to 2.5 per cent in RE 2015-16
#Total expenditure projected at Rs 19.78 lakh crore
#Plan expenditure pegged at Rs 5.50 lakh crore under Plan, increase of 15.3 per cent
#Non-Plan expenditure kept at Rs 14.28 lakh crores
#Every new scheme sanctioned will have a sunset date and outcome review.
#Rationalised and restructured more than 1500 Central Plan Schemes into about 300 Central Sector and 30 Centrally Sponsored Schemes.
#Committee to review the implementation of the FRBM Act.
#Special emphasis to sectors such as agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure.
#Mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.
#Plan / Non-Plan classification to be done away with from 2017-18.
#Raise the ceiling of tax rebate under section 87A from Rs 2000 to Rs 5000 to lessen tax burden on individuals with income upto Rs5 lakhs.
#Increase the limit of deduction of rent paid under section 80GG from Rs 24000 per annum to Rs 60000, to provide relief to those who live in rented houses.
#Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30 per cent, and surcharge at 7.5 per cent and penalty at 7.5 per cent, which is a total of 45 per cent of the undisclosed income. Declarants will have immunity from prosecution.
# Surcharge levied at 7.5 per cent of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.
#New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to Rs 10 lakh. Cases with disputed tax exceeding Rs 10 lakh to be subjected to 25 per cent of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25 per cent of the minimum of the imposable penalty and tax interest on quantum addition.
#One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.
#Penalty rates to be 50 per cent of tax in case of underreporting of income and 200 per cent of tax where there is misreporting of facts.
#Disallowance will be limited to 1 per cent of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
#Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs 15 lakhs to Rs 50 lakhs.
#13 cesses, levied by various Ministries in which revenue collection is less than Rs 50 crore in a year to be abolished.
#For non-residents providing alternative documents to PAN card, higher TDS not to apply.
#Revision of return extended to Central Excise assesses.
#Additional options to banking companies and financial institutions, including NBFCs, for reversal of input tax credits with respect to non- taxable services.