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Presented By Shashi Kant Singh Vivek Verma Sahana K M Shravya Bolla Sushant K S
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Slide 1

Presented ByShashi Kant SinghVivek VermaSahana K MShravya BollaSushant K S

FISCAL DEFICIT* Fiscal deficit seen at 3.9 percent of GDP in 2015/16* Will meet the challenging fiscal target of 4.1 percent of GDP* Remain committed to meeting medium term fiscal deficit target of 3 percent of GDP* Current account deficit below 1.3 percent of GDP* Jaitley says have to keep fiscal discipline in mind despite need for higher investmentGROWTH* GDP growth seen at between 8 percent and 8.5 percent y/y* Nominal economic growth seen between 11 and 12 percent* Aiming double digit growth rate, achievable soonINFLATION* Expects consumer inflation to remain close to 5 percent by March, opening room for more monetary policy easing* Monetary policy framework agreement with the RBI clearly states objective of keeping inflation below 6 percent* "One of the achievements of my government has been to conquer inflation. This decline in my view represents a structural shift."REVENUES* Revenue deficit seen at 2.8 percent of GDP* Non tax revenue seen at 2.21 trillion rupees* Agricultural incomes are under stress* Net receipts under market stabilisation scheme estimated at 200 billion rupeesDISINVESTMENT* Government targets 410 billion rupees ($6.7 billion) from stake sales in companies in 2015/16* Total stake sale in 2015/16 seen at 695 billion rupees* Sets stake sale target for 2016/17 at 550 billion rupees* Revises down stake sale target for 2014/15 to 313.5 billion rupeesMARKET REFORMS* Propose to merge commodities regulator with SEBI* To bring a new bankruptcy code* Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee* 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 banksPOLICY 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 346.99 billion rupees for rural employment guarantee scheme* Raises threshold for application of transfer pricing rules to 200 million rupees from current 50 million rupeesBORROWING* Gross market borrowing seen at 6 trillion rupees* Net market borrowing seen at 4.56 trillion rupees

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 avoidedTAXATION* To abolish wealth tax* Replaces wealth tax with additional 2 pct surcharge on super rich* Proposes to cut to 25 percent corporate tax over next four years* Corporate tax of 30 percent is uncompetitive* Net gain from tax proposals seen at 150.68 billion rupees* Jaitley proposes modification of permanent establishment norms so that the mere presence of a fund manager in India would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.Proposes to rationalise capital gains tax regime for real estate investment trusts* Extends withholding tax concession on foreign debt purchases by two years* 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 percent* Proposes to increase service tax rate and education cess to 14 percent from 12.36 percent* 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 dept to clarify indirect transfer of assets and dividend paid by foreign firmsPERSONAL INCOME TAX

* No revision of income tax brackets* Limit of deduction of health insurance premium increased to 25,000 rupees from 15,000 rupees; limit increased to 30,000 rupees from 20,000 rupees for the elderly* People aged above 80 and not covered by health insurance to be allowed deduction of 30,000 rupees for medical expenses* Additional deduction of 25,000 rupees for the disabled* Limit on deduction for contributions to pension fund and new pension scheme increased to 150,000 rupees from 100,000 rupees* Additional deduction of 50,000 rupees for contribution to new pension scheme under section 80CCD* Monthly transport allowance exemption doubled to 1,600 rupees

INFRASTRUCTURE* Investment in infrastructure will go up by 700 bln rupees 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 4,000 MW each* Second unit of Kudankulam nuclear power station to be commissioned* Will need to build additional 100,000 km of road* Ports in public sector will be encouraged to corporatise under Companies ActEXPENDITURE* Plan expenditure estimated at about 4.65 trillion rupees* Non-plan expenditure seen at about 13.12 trillion rupees* Allocates 2.46 trillion rupees for defence spending* Allocates 331.5 billion rupees for health sector* If revenue improves, hope to raise budgeted allocations for rural job scheme by 50 billion rupeesIMPORT TAX* Import tax on iron and steel increased to 15 percent from 10 percent* Import tax on metallurgical coke increased to 5 percent from 2.5 percent

INVESTMENT* Government to provide 79.4 billion rupees capital infusion to state-run banks* 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 investmentGOLD* To launch gold deposit accounts and sovereign bond* Import duty stays at 10 percent; disappoints jewellers* To work on Indian-made gold coin to cut imports

CIGARETTESRaises excise duty on cigarettes by 25 percent for cigarettes of length not exceeding 65 mm

* Raises excise duty by 15 percent for cigarettes of other lengths

SUBSIDIES* Food subsidy seen at 1.24 trillion rupees* Fertiliser subsidy seen at 729.69 billion rupees* Fuel subsidy seen at 300 billion rupees* Major subsidies estimated at 2.27 trillion rupees* We are committed to subsidy rationalisation based on cutting leakages

Three Key achievements:* Financial Inclusion - 12.5 crores families financially mainstreamed in 100 days.* Transparent Coal Block auctions to augment resources of the States.* Swachh Bharat is not only a programme to improve hygiene and cleanliness but has become a movement to regenerate India.* Game changing reforms on the anvil: . Goods and Service Tax (GST) . Jan Dhan, Aadhar and Mobile (JAM) - for direct benefit transfer.STATE OF ECONOMYInflation* Inflation declined - a structural shift * CPI inflation projected at 5% by the end of the year, consequently, easing of monetary policy. * Monetary Policy Framework Agreement with RBI, to keep inflation below 6%. * GDP growth in 2015-16, projected to be between 8 to 8.5%.Amrut Mahotsav - The year 2022, 75th year of Independence

Vision for "Team India" led by PM* Housing for all - 2 crore houses in Urban areas and 4 crore houses in Rural areas.* Basic facility of 24x7 power, clean drinking water, a toilet and road connectivity.* At least one member has access to means for livelihood.* Substantial reduction in poverty.* Electrification of the remaining 20,000 villages including off-grid Solar Power- by 2020.* Connecting each of the 1,78,000 un-connected habitation.* Providing medical services in each village and city.* Ensure a Senior Secondary School within 5 km reach of every child, while improving quality of education and learning outcomes.* To strengthen rural economy - increase irrigated area, improve the efficiency of existing irrigation systems, and ensure value addition and reasonable price for farm produce.* Ensure communication connectivity to all villages.To make India, the manufacturing hub of the World through Skill India and the Make in India Programmes.* Encourage and grow the spirit of entrepreneurship - to turn youth into job creators.* Development of Eastern and North Eastern regions on par with the rest of the country.Major Challenges Ahead

* Five major challenges: Agricultural income under stress, increasing investment in infrastructure, decline in manufacturing, resource crunch in view of higher devolution in taxes to states, maintaining fiscal discipline.* To meet these challenges public sector needs to step in to catalyse investment, make in india programme to create jobs in manufacturing, continue support to programmes with important national priorities such as agriculture, education, health, MGNREGA, rural infrastructure including roads.* Challenge of maintaining fiscal deficit of 4.1% of GDP met in 2014-15, despite lower nominal GDP growth due to lower inflation and consequent sub-dued tax buoyancy.Fiscal Roadmap

* Government firm on journey to achieve fiscal target of 3% of GDP.* Realistic figures shown in fiscal account without showing exaggerated revenue projections.With improved economy, pressure to accelerate fiscal consolidation too has decreased.* Accordingly, journey for fiscal deficit target of 3% will be achieved in 3 years rather than 2 years. The fiscal deficit targets are 3.9%, 3.5% and 3.0% in FY 2015-16, 2016-17 & 2017-18 respectively.* Additional fiscal space will go to funding infrastructure investment.* Need to view public finances from a National perspective and not just the perspective of the Central Government. Aggregate public expenditure of the Governments, as a whole can be expected to rise substantially.* Disinvestment to include both disinvestment in loss making units, and some strategic disinvestment.Good governance* Need to cut subsidy leakages, not subsidies themselves. To achieve this, Government committed to the process of rationalizing subsidies.* Direct Transfer of Benefits to be extended further with a view to increase the number of beneficiaries from 1 crore to 10.3 crore.Agriculture* Major steps take to address the two major factors critical to agricultural production, that of soil and water.* 'Paramparagat Krishi Vikas Yojana' to be fully supported.* 'Pradhanmantri Gram Sinchai Yojana' to provide 'Per Drop More Crop'.* Rs 5,300 crore to support micro-irrigation, watershed development and the 'Pradhan Mantri Krishi Sinchai Yojana'. States urged to chip in.* Rs 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs 15,000 crore for Long Term Rural Credit Fund; Rs 45,000 crore for Short Term Co-operative Rural Credit Refinance Fund; and Rs 15,000 crore for Short Term RRB Refinance Fund.* Target of Rs 8.5 lakh crore of agricultural credit during the year 2015-16.* Focus on improving the quality and effectiveness of activities under MGNREGA.

COMMENTSFINANCE MINISTER'S COMMENTS* "We inherited a sentiment of doom and gloom. The investment community had almost written us off. We have come a long way since then."* "We have turned around the economy, dramatically restoring macroeconomic stability and creating the conditions for sustainable poverty elimination, job creation, durable double digit economic growth."* "While being mindful of the challenges ... this gives us reason to feel optimistic."* "Domestic and international investors are seeing us with renewed interest and hope."

MODI ON TWITTER

Union Budget 2015 is a Budget with a clear vision. It is a Budget that is progressive, positive, practical, pragmatic and prudent - PM Narendra Modi

2015 Budget will further reignite our growth engine, signalling the dawn of a prosperous future.

* Budget is investment friendly & removes all doubts on tax issues. It assures investors that we have a stable, predictable & fair tax system.

MARKET REACTION* BSE index gains 0.48 percent; NSE index up 0.65 percent* ITC slumps after budget hikes excise duty on cigarettes($1 = 61.6489 rupees)