2014-15 Union Budget Highlights

2014-15 Union Budget Highlights

So there it is. The much awaited maiden budget of the BJP government. As expected it is a growth oriented budget that has built in structural reforms. There is an unmistakable leaning to borrow higher. But that was to be. Let’s see what the FM has delivered – highlights of Mr.Jaitley’s maiden budget below:

- A growth of 7 to 8% is aimed for in the coming 3 to 4 years. Growth oriented policies to remain in mainstay.
- Fiscal Deficit to be reined in by increasing tax collection to GDP ratio and increasing non-tax revenues. Obviously, ‘we cannot spend beyond our means’. Fiscal deficit for 2014-15 pegged at 4.3% and for next year at 3%
- Revenue Deficit pegged at 2.9% of the GDP
- Plan expenditure of Rs.5.75 lacs in the current fiscal

Corporate and indirect Tax
- Much expected changes to scrap retrospective tax rules not done, but there is just an assurance from the FM that tax environment would be stable. Pending cases of retrospective tax for indirect transfers to be ‘examined by committee.’
- Roll out of GST likely to happen by the end of this year.
- Real estate and infra investment trusts to be introduced enabled by necessary tax changes.
- 10 year tax holiday for power generation companies
- Basic custom duty on LCD and LEDs below 19 inch reduced to zero from 10 per cent.
- Excise duties increased on Cigarettes, gutkas and cigars which will now cost more

Personal Income Tax
- Tax rates remain unchanged, but exemption limit increased to Rs.2.5 lacs.
- Investment limits under Section 80C increased to Rs.1.5 lacs
- Exemption on interest component on housing loan increased to Rs. 2 lacs
- Senior citizens exemption increased to Rs. 3 lacs.
- Annual PPF ceiling enhanced to Rs.1.5 lacs to promote household savings

Infrastructure

- 16 new port projects to be awarded in the year
- Airports in tier 1 and 2 cities
- Investment in state highways and NHAI of Rs.37,887 crores. Rs. 3000 crores for North East.
- Rs.500 crore for solar development in Tamil Nadu and Rajasthan
- Rs.11,600 crore for developing outer harbor projects
- 100 smart cities to be set up – budget allocation of Rs.7060 crores
- 20 new industrial clusters announced

Agriculture and Rural
- 4% growth in agriculture to be sustained
- Credit for joint farming groups
- Rs 500 crore to stabilize agricultural commodities prices
- Rs 3600 cr for National Rural Drinking Water
- Rs 8000 crore for National Housing Bank program on rural housing
- Rs.200 crore for start-ups by SC / ST

Others
- Single KYC norms for all financial services and one demat account for all financial products
- 49% FDI in insurance
- Rs.500 crores for 5 new IIMs and IITs
- Equity divestment in PSUs
- Rs.229 crores for defence. FDI in defence increased to 49% from 26%

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