Speech by the Financial Secretary, the Hon John C Tsang together with the supplement and appendices relating to the Budget. Finance Minister Arun Jaitley on Saturday presented his maiden full-year Budget for the financial year in the Lok Sabha. Read the full. Union Budget An analysis. India. Union Budget An Insight. March 2, Prepared By: - , - ,. 6th Floor, DLF South Court.
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+ €m in. /16; and €m in / + €m from on details will be provided in the Finance Bill. Employment and Investment. Budget Highlights (Key Features) PDF File Opens in a new window The Budget documents presented to Parliament comprise, besides the Finance Minister's Budget E. Memorandum Explaining the Provisions in the Finance Bill , Improving the fairness of the tax system by fighting financial crime, Outcomes.
Agencies Updated: Dec 28, , Here are the highlights of Jaitley's budget for the fiscal year that begins on April 1. With improved economy, pressure to accelerate fiscal consolidation too has decreased. The fiscal deficit targets are 3. Aggregate public expenditure of the Governments, as a whole can be expected to rise substantially.
Thus can our youth turn from being job-seekers, to job-creators. We need to ensure that they are on par with the rest of the country. This will be our true and meaningful tribute to our freedom fighters. As I stated earlier, Madam Speaker, I am also mindful of the five major challenges I have to reckon with. Firstly, Agricultural incomes are under stress. Our second challenge is increasing investment in infrastructure.
With private investment in infrastructure via the public private partnership PPP model still weak, public investment needs to step in, to catalyse investment. The Make in India programme is aimed at meeting this challenge, thus creating jobs. Fourth, we need to be mindful of the need for fiscal discipline in spite of rising demands for public investment. As members of this august House are aware, this is an unprecedented increase which would empower states with more resources.
The devolution to the States would be of the order of Rs 5. Another Rs 3. In spite of the consequential reduced fiscal space for the Centre, the Government has decided to continue supporting important national priorities such as agriculture, education, health, MGNREGA, and rural infrastructure including roads. Programmes targeted for the poor and the under-privileged, will be continued by us. With fiscal space not just reduced but squeezed, I have to meet the fifth challenge of maintaining fiscal discipline.
Economic growth this year, at Consequently, tax buoyancy was also significantly lower. Despite this, Madam, I have kept my word, and we will meet the challenging fiscal deficit target of 4. Madam Speaker, I need to overcome these challenges to reduce and eliminate poverty.
Fiscal Roadmap But that journey has to take account of the need to increase public investment. The total additional public investment over and above the RE is planned to be Rs 1. We also have to take into account the drastically reduced fiscal space; uncertainties that implementation of GST will create; and the likely burden from the report of the 7th Pay Commission.
Rushing into, or insisting on, a pre-set time-table for fiscal consolidation pro-cyclically would, in my opinion, not be pro-growth. With the economy improving, the pressure for accelerated fiscal consolidation too has decreased. Thus, for the next three years, my targets are: 3. The additional fiscal space will go towards funding infrastructure investment. Madam Speaker, I want to round up the discussion on the fiscal road map on an optimistic note.
While there is a compositional shift, the aggregate envelope for job creation, poverty elimination and building infrastructure is not disturbed; in fact it goes up this year, and every subsequent year, in the same proportion as the tax revenues of the Union, and the State Governments increase.
Madam Speaker, it may be noted that the budget reflects considerable scaling up of disinvestment figures. This will include both disinvestment in loss making units, and some strategic disinvestment. Good Governance Madam, Speaker, this Government is committed in its resolve, as Indians, to regain our pre-eminence as a just and compassionate country. The same is true of subsidies. Subsidies are needed for the poor and those less well off. What we need is a well targeted system of subsidy delivery.
We need to cut subsidy leakages, not subsidies themselves. We are committed to the process of rationalizing subsidies based on this approach. We have embarked on that path. The direct transfer of benefits, started mostly in scholarship schemes, will be further expanded with a view to increasing the number of beneficiaries from the present 1 crore to Similarly, Rs 6, crore have so far been transferred directly, as LPG subsidy to I am sure, persons who are better-off, such as those in the top tax bracket, and those genuinely concerned for the welfare of the poor, such as members of this House, will give up their LPG subsidy voluntarily.
Agriculture Our commitment to farmers runs deep. We have already taken major steps to address the two major factors critical to agricultural production: soil and water. An ambitious Soil Health Card Scheme has been launched to improve soil fertility on a sustainable basis. In order to improve soil health, I also propose to support Agiculture Ministry's organic farming scheme - "Paramparagat Krishi Vikas Yojana".
I am allocating Rs 5, crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana. I urge the States to chip in substantially in this vital sector.
Farm credit underpins the efforts of our hard-working farmers. I have, therefore, set up an ambitious target of Rs 8.
We will ensure that no one who is poor is left without employment. I have made an initial allocation of Rs 34, crore for the programme. While the farmer is no longer in the clutches of the local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have the incidental benefit of moderating price rises.
Funding the Unfunded Madam Speaker, our government firmly believes that development has to generate inclusive growth.
While large corporate and business entities have a role to play, this has to be complemented by informal sector enterprises which generate maximum employment. There are some 5. These bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit. Just as we are banking the un-banked, we are also funding the un-funded. A significant part of the working capital requirement of a MSME arises due to long receivables realization cycles.
This should improve the liquidity in the MSME sector significantly. Bankruptcy law reform, that brings about legal certainty and speed, has been identified as a key priority for improving the ease of doing business. We will bring a comprehensive Bankruptcy Code in fiscal , that will meet global standards and provide necessary judicial capacity. The Government is committed to increasing access of the people to the formal financial system.
In this context, Government proposes to utilize the vast Postal network with nearly 1,54, points of presence spread across the villages of the country. From Jan Dhan to Jan Suraksha A large proportion of India's population is without insurance of any kind - health, accidental or life. Worryingly, as our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged.
The soon-to-be-launched Pradhan Mantri Suraksha Bima Yojna will cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year. Similarly, we will also launch the Atal Pension Yojana, which will provide a defined pension, depending on the contribution, and its period.
The premium will be Rs per year, or less than one rupee per day, for the age group I have proposed the creation of a Senior Citizen Welfare Fund, in the Finance Bill, for appropriation of these amounts to a corpus which will be used to subsidize the premiums of vulnerable groups such as old age pensioners, BPL card-holders, small and marginal farmers and others.
A detailed scheme would be issued in March. Madam Speaker, special regard needs to be paid to the population of senior citizens in the country which is now approximately A sizeable percentage of them also suffer from age related disabilities. Ours is a society that venerates its elders. I, therefore, propose that a new scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line.
In sum, these social security schemes reflect our commitment to utilize the Jan Dhan platform, to ensure that no Indian citizen will have to worry about illness, accidents, or penury in old age. Being sensitive to the needs of the poor, under-privileged and the disadvantaged, my Government also remains committed to the ongoing welfare schemes for the SCs, STs and Women.
An integrated education and livelihood scheme called 'Nai Manzil' will be launched this year to enable Minority Youth who do not have a formal school-leaving certificate to obtain one and find better employment. Further, to show-case civilization and culture of the Parsis, the Government will support, in, an exhibition, 'The Everlasting Flame'. The allocation for the Ministry of Minority Affairs is being protected.
The BE for the year is Rs 3, crore. Infrastructure Madam, it is no secret that the major slippage in the last decade has been on the infrastructure front. Our infrastructure does not match our growth ambitions. There is a pressing need to increase public investment. I have, therefore, increased outlays on both the roads and the gross budgetary support to the railways, by Rs 14, crore, and Rs 10, crore respectively. The infrastructure finance companies can then leverage this extra equity, many fold.
Thirdly, I also intend to permit tax free infrastructure bonds for the projects in the rail, road and irrigation sectors. Fourth, the PPP mode of infrastructure development has to be revisited, and revitalised. The major issue involved is rebalancing of risk. In infrastructure projects, the sovereign will have to bear a major part of the risk without, of course, absorbing it entirely. The platform will also promote a network of world-class innovation hubs and Grand Challenges for India.
We are now seeing a growing interest in start-ups. Experimenting in cutting edge technologies, creating value out of ideas and initiatives and converting them into scalable enterprises and businesses is at the core of our strategy for engaging our youth and for inclusive and sustainable growth of the country.
Concerns such as a more liberal system of raising global capital, incubation facilities in our Centres of Excellence, funding for seed capital and growth, and ease of Doing Business etc. SETU will be a Techno-Financial, Incubation and Facilitation Programme to support all aspects of start-up businesses, and other self-employment activities, particularly in technology-driven areas. As the success of so-called minor ports has shown, ports can be an attractive investment possibility for the private sector.
Ports in the public sector need to both attract such investment as well as leverage the huge land resources lying unused with them. To enable us to do so, ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act. Madam Speaker, investors spend a large amount of time and resources on getting the multiple permissions required. We aim towards ease of doing in India. I have myself launched the e-Biz Portal which integrates 14 regulatory permissions at one source.
Good States are embracing and joining this platform. However, if we really want to create jobs, we have to make India an investment destination which permits the start of a business in accordance with publically stated guidelines and criteria. I intend to appoint an Expert Committee for this purpose to examine the possibility and prepare a draft legislation where the need for multiple prior permissions can be replaced with a pre-existing regulatory mechanism.
All clearances and linkages will be in place before the project is awarded by a transparent auction system. The Government would also consider similar plug-and-play projects in other infrastructure projects such as roads, ports, rail lines, airports etc. I am happy to announce that the second unit of Kudankulam Nuclear Power Station will be commissioned in Madam Speaker, I hope to garner some additional resources during the year from tax buoyancy.
Financial Markets One vital factor in promoting investment in India, including in the infrastructure sector, is the deepening of the Indian Bond market, which we have to bring at the same level as our world class equity market. I intend to begin this process this year by setting up a Public Debt Management Agency PDMA which will bring both India's external borrowings and domestic debt under one roof.
I also propose to merge the Forwards Markets Commission with SEBI to strengthen regulation of commodity forward markets and reduce wild speculation.
Capital Account Controls is a policy, rather than a regulatory, matter. I, therefore, propose to amend, through the Finance Bill, Section-6 of FEMA to clearly provide that control on capital flows as equity will be exercised by the Government, in consultation with the RBI.
A properly functioning capital market also requires proper consumer protection. I, therefore, also propose to create a Task Force to establish a sector-neutral Financial Redressal Agency that will address grievances against all financial service providers. I hope, sooner rather than later, to introduce the IFC in Parliament for consideration.
Madam, Speaker, this is just the beginning. I have a vision of putting in place a direct tax regime which is internationally competitive on rates, is without exemptions, incentivises savings, and does not realize tax from intermediaries. Such a direct tax regime would match the modernized indirect taxes regime we are putting in place by way of GST, and will bring both greater transparency and greater investments. Further, the low paid worker suffers deductions greater than the better paid workers, in percentage terms.
Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer's contribution. We intend to bring amending legislation in this regard, after stakeholder consultation. Monetising Gold India is one of the largest consumers of gold in the world and imports as much as tonnes of gold each year. Though stocks of gold in India are estimated to be over 20, tonnes, mostly this gold is neither traded, nor monetized.
The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account. The Bonds will carry a fixed rate of interest, and also be redeemable in cash in terms of the face value of the gold, at the time of redemption by the holder of the Bond.
Such an Indian Gold Coin would help reduce the demand for coins minted outside India and also help to recycle the gold available in the country. One way to curb the flow of black money is to discourage transactions in cash. Investment Such alternate investment funds provide another vehicle for facilitating domestic investments. Keeping in view the need to increase investments from all sources, I propose to also allow foreign investments in Alternate Investment Funds.
The 'Act East' policy of the Government of India endeavours to cultivate extensive economic and strategic relations in South-East Asia. Safe India My Government is committed to safety and security of women. Tourism These facilities are still deficient and require restoration, including landscape restoration; signage and interpretation centres; parking; access for the differently abled; visitors' amenities, including securities and toilets; illumination and plans for benefiting communities around them.
Green India Our de facto 'Carbon Tax' on most petroleum products compares favourably with international norms. With regard to coal, there is a need to find a balance between taxing pollution, and the price of power.
However, beginning this year, I intend to start on that journey too. I am proposing an initial outlay of Rs 75 crore for this Scheme in Madam, Speaker, we are putting the scam, scandal and corruption Raj behind us. Malfeasance in public procurement can perhaps be contained by having a procurement law and an institutional structure consistent with the UNCITRAL model.
I believe, Parliament needs to take a view soon on whether we need a procurement law, and if so, what shape it should take. On the other hand, disputes arising in public contracts take long to resolve, and the process is very costly too.
My Government proposes to introduce a Public Contracts Resolution of Disputes Bill to streamline the institutional arrangements for resolution of such disputes. There is also a need, I feel, to tackle the lack of common approach and philosophy in the regulatory arrangements prevailing even within the different sectors of infrastructure.
Our Government, therefore, also proposes to introduce a regulatory reform law that will bring about a cogency of approach across various sectors of infrastructure. Skill India Our young people have to be both educated and employable for the jobs of the 21st Century.
The Mission will consolidate skill initiatives spread across several Ministries and allow us to standardize procedures and outcomes across our 31 Sector Skill Councils. Disbursement will be through a digital voucher directly into qualified student's bank account. This is the year when we will be entering the th birth anniversary of Shri Deen Dayalji Upadhyay.
The intention of the Government is to celebrate the anniversary of this great nationalist, in a befitting manner. A th Birthday Celebration Committee will be announced soon, and adequate resources provided for the celebration. We will ensure that no student misses out on higher education for lack of funds. In order to improve the Governance of Public Sector banks, the Government intends to set up an autonomous bank Board Bureau.
The Bureau will search and select heads of Public Sector banks and help them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments. This would be an interim step towards establishing a holding and investment Company for Banks. Digital India Madam, Speaker, I would like to inform the House we are making good progress towards making Digital India.
Andhra Pradesh is the first State to have opted for this manner of implementation. As Members are aware, in making their recommendations, the Finance Commission has not distinguished between special category and other states.
Moreover, both Bihar and West Bengal are going to be amongst the biggest beneficiaries of the recommendations of the Finance Commission.
Yet, the Eastern States have to be given an opportunity to grow even faster. I, therefore, propose to give similar special assistance to Bihar and West Bengal as has been provided by the Government of India in the case of Government of Andhra Pradesh.
As regards Andhra Pradesh and Telengana, the Government is committed to comply with all the legal commitments made to these States at the time of reorganization. In spite of the large increase in devolution to states, which implies reduced fiscal space for the Centre in the same proportion we are committed to the welfare of the poor and the neo-middle class.
Keeping this in mind, adequate provision is being made for the schemes for the poor and the dis-advantaged. The significant sums that will be spent by the States on these programmes will ensure a quantum leap in expenditures in these areas.
I urge states to utilize their enhanced resources effectively in these areas. However, as the pace of expenditure picks up, I will provide them additional funds. Defence of every square inch of our mother land comes before anything else.
So far, we have been over dependent on imports, with its attendant unwelcome spin-offs. Our Government has already permitted FDI in defence so that the Indian-controlled entities also become manufacturers of defence equipments, not only for us, but for export.
We are thus pursuing the Make in India policy to achieve greater self-sufficiency in the area of defence equipment, including aircraft.
This year too, I have provided adequately for the needs of the armed forces. While India produces some of the finest financial minds, including in international finance, they have few avenues in India to fully exhibit and exploit their strength to the country's advantage. The proposal has languished for years. I am glad to announce that the first phase of GIFT will soon become a reality. Appropriate regulations will be issued in March. For the quick resolution of commercial disputes, the Government proposes to set up exclusive commercial divisions in various courts in India based on the recommendations of the rd Report of the Law Commission.
The Government proposes to introduce a Bill in the parliament after consulting stakeholders in this regard.
Madam Speaker, the Government will, during this session, also place before the Parliament the required Bills, to convert Ordinances issued by the Government into Acts of Parliament. I now turn to the Budget Estimates for Budget Non-Plan expenditure estimates for the Financial Year are estimated at Rs 13,12, crore. The requirements for expenditure on Defence, Internal Security and other necessary expenditures are adequately provided. With the above estimates, fiscal deficit will be 3.
I now turn to my tax proposals. Taxation is an instrument of social and economic engineering. Tax collections help the Government to provide education, healthcare, housing and other basic facilities to the people to improve their quality of life and to address the problems of poverty, unemployment and slow development. To achieve these objectives, it has been our endeavour in the last nine months to foster a stable taxation policy and non-adversarial tax administration. A very important dimension to our tax administration is the fight against the scourge of black money.
A number of measures have already been taken in this direction. I propose to do much more. Improve quality of life and public health, Swachh Bharat;.
Benefit to middle class tax-payers; and. Stand alone proposals to maximise benefit to the economy. Provide information in respect of cases independently investigated by IT department;. Confirm genuineness of bank accounts and provide non-banking information;. Provide such information in time-bound manner; and. Commence talks for automatic exchange of information. Key features of new law on black money:.
Undisclosed income from any foreign assets to be taxable at the maximum marginal rate. Mandatory filing of return in respect of foreign asset. Entities, banks, financial institutions including individuals all liable for prosecution and penalty. Thus, the net impact of all tax proposals would be revenue gain of Rs crore. Metallergical coke from 2. Service-tax exemption:. Services of pre-conditioning, pre-cooling, ripening etc.
Life insurance service provided by way of Varishtha Pension Bima Yojana.
All ambulance services provided to patients. Admission to museum, zoo, national park, wile life sanctuary and tiger reserve. Transport of goods for export by road from factory to land customs station.