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Government\r\nwill meet a "challenging" fiscal deficit target of 4.1 per cent of\r\nits gross domestic product (GDP) in the year to March 31, Finance Minister Arun\r\nJaitley said on Saturday, when presenting the government's full-year budget.
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Here\r\nare the highlights of Jaitley's budget for the fiscal year that begins on April\r\n1.
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FISCAL\r\nDEFICIT
*\r\nFiscal deficit seen at 3.9 per cent of GDP in 2015/16
*\r\nWill meet the challenging fiscal target of 4.1 per cent of GDP
*\r\nRemain committed to meeting medium term fiscal deficit target of 3 per cent of\r\nGDP
*\r\nCurrent account deficit below 1.3 per cent of GDP
*\r\nJaitley says have to keep fiscal discipline in mind despite need for higher\r\ninvestment
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GROWTH
*\r\nGDP growth seen at between 8 per cent and 8.5 per cent y/y
*\r\nAiming double digit growth rate, achievable soon
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INFLATION
*\r\nExpect consumer inflation to remain close to 5 per cent by March, opening room\r\nfor more monetary policy easing
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*\r\nMonetary policy framework agreement with the RBI clearly states objective of keeping\r\ninflation below 6 per cent
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*\r\n"One of the achievements of my government has been to conquer inflation.\r\nThis decline in my view represents a structural shift."
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REVENUES
*\r\nRevenue deficit seen at 2.8 per cent of GDP
*\r\nNon tax revenue seen at 2.21 trillion rupees
*\r\nAgricultural incomes are under stress
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MARKET\r\nREFORMS
*\r\nPropose to merge commodities regulator with SEBI
*\r\nTo bring a new bankruptcy code
*\r\nJaitley says will move to amend the RBI act this year, and provide for a\r\nmonetary policy
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committee
*\r\nTo set up public debt management agency
*\r\nProposes to introduce a public contract resolution of disputes bill
*\r\nTo establish an autonomous bank board bureau to improve management of public\r\nsector banks
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POLICY\r\nREFORMS
*\r\nTo enact a comprehensive new law on black money
*\r\nPropose to create a universal social security system for all Indians
*\r\nTo launch a national skills mission soon to enhance employability of rural\r\nyouth
*\r\nTo raise visa-on-arrival facility to 150 countries from 43
*\r\nAllocates 346.99 billion rupees for rural employment guarantee scheme
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TAXATION
*\r\nTo abolish wealth tax
*\r\nReplaces wealth tax with additional 2 pct surcharge on super rich
*\r\nProposes to cut to 25 per cent corporate tax over next 4 years
*\r\nCorporate tax of 30 per cent is uncompetitive
*\r\nGovernment defers rollout of anti-tax avoidance rules GAAR by two years
*\r\nGAAR to apply prospectively from April 1, 2017
*\r\nRetrospective tax provisions will be avoided
*\r\nJaitley proposes modification of permanent establishment norms so that the mere\r\npresence of a fund manager in India would not constitute a permanent\r\nestablishment of the offshore fund, resulting in adverse tax consequences.
*\r\nProposes to rationalise capital gains tax regime for real estate investment\r\ntrusts
*\r\nExpects to implement goods and services tax by April 2016
*\r\nTo reduce custom duty on 22 items
*\r\nProposes to increase service tax rate and education cess to 14 per cent from\r\n12.36 percent
*\r\nPlans to introduce direct tax regime that is internationally competitive on\r\nrates without exemptions
*\r\nExemptions for individual tax payers to continue
*\r\nTo enact tough penalties for tax evasion in new bill
*\r\nTax dept to clarify indirect transfer of assets and dividend paid by foreign\r\nfirms
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INFRASTRUCTURE
*\r\nInvestment in infrastructure will go up by 700 bln rupees in 2015/16 over last\r\nyear
*\r\nPlans to set up national investment infrastructure fund
*\r\nProposes tax-free infrastructure bonds for projects in roads, rail and\r\nirrigation projects
*\r\nProposes 5 "ultra mega" power projects for 4,000 MW each
*\r\nSecond unit of Kudankulam nuclear power station to be commissioned
*\r\nWill need to build additional 100,000 km of road
*\r\nPorts in public sector will be encouraged to corporatise under Companies Act
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EXPENDITURE
*\r\nPlan expenditure estimated at about 4.65 trillion rupees
*\r\nNon-plan expenditure seen at about 13.12 trillion rupees
*\r\nAllocates 2.46 trillion rupees for defence spending
*\r\nAllocates 331.5 billion rupees for health sector
*\r\nIf revenue improves, hope to raise budgeted allocations for rural job scheme by\r\n50 billion rupees
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INVESTMENT
*\r\nPropose to do away with different types of foreign investment caps and replace\r\nthem with composite caps
*\r\nTo allow foreign investment in alternative investment funds
*\r\nPublic investment needed to catalyse investment GOLD
*\r\nTo develop a sovereign gold bond
*\r\nTo introduce gold monetisation scheme to allow depositors to earn interest
*\r\nTo introduce Indian-made gold coin to reduce demand for foreign gold coins
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SUBSIDIES
*\r\nWe are committed to subsidy rationalisation based on cutting leakages
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FINANCE\r\nMINISTER'S COMMENTS
*\r\n"The world is predicting it's India's time to fly"
*\r\n"We inherited a sentiment of doom and gloom. The investment community had\r\nalmost written us off. We have come a long way since then."
*\r\n"We have turned around the economy, dramatically restoring macroeconomic\r\nstability and creating the conditions for sustainable poverty elimination, job\r\ncreation, durable double digit economic growth."
*\r\n"While being mindful of the challenges ... this gives us reason to feel\r\noptimistic."
*\r\n"Domestic and international investors are seeing us with renewed interest\r\nand hope."
