Highlights of union budget FY16-17
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The finance minister unveiled India's budget for fiscal year 2016-17, focusing on helping rural and poor communities through new aid schemes. The budget forecasted 7.6% GDP growth for the current year and maintained the fiscal deficit target of 3.5% for next year. It allocated funds for rural jobs, farmer welfare, and agriculture credit while also announcing reforms for taxation, banking, and infrastructure development. Key items included a 250 billion rupee capital infusion for state banks, increased allocations for roads and highways, and allowing full foreign investment in food processing.
Highlights of union budget FY16-17
- 1. 1 Highlights of Union Budget FY16-17 Finance Minister unveiled a budget for the poor on Monday, announcing new rural aid schemes & skimping on a bank bailout, in a strategy shift that seeks to boost his ruling party in coming state elections. Jaitley reiterated a forecast that India would grow by 7.6% in the fiscal year that is drawing to a close. He said the government wanted to spread the benefits of growth more widely among India's 1.3 billion people, but that he would stick to the government's existing fiscal deficit target for the coming year. Here are the highlights of the budget for the fiscal year that begins on April 1. FISCAL DEFICIT * Fiscal deficit seen at 3.9% of GDP in 2015/16 * Fiscal deficit seen at 3.5% of GDP in 2016/17 * Plan expenditure seen at Rs 5.5 trillion in 2016/17 * Proposes to set up panel to review fiscal responsibility management act RURAL ECONOMY * Rural jobs programme allocated Rs 385 billion ($5.61 billion) in 2016/17 * Farmer welfare budget to total Rs 359.84 billion * Rural road development to get Rs 190 billion * Target of agriculture credit at Rs 9 trillion * Interest subvention towards farm loans at Rs 150 billion POLICY REFORMS * Bankruptcy code for financial firms to be introduced in parliament in 2016/17
- 2. 2 * RBI act is being amended for implementing monetary policy framework * To list general insurances companies on stock exchanges BANKING REFORMS * Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required TAXATION * Will not resort to retrospective taxation in future; one time tax dispute resolution proposed for retrospective taxation * To rationalise corporate tax for new manufacturing companies * To implement general anti avoidance tax rule from April 1, 2017 * Security transaction tax on options raised to 0.05% * Proposes to levy infrastructure cess of 1-4% on certain models of cars * Raises factory gate tax on various tobacco products by 10-15% * Proposes limited compliance window on undeclared income of domestic tax payers * Proposes new dispute resolution scheme to resolve tax disputes * Proposes to abolish 13 different levies BORROWING * Gross market borrowing seen at 6 trln rupees for 2016/17 INFRASTRUCTURE * Allocates 2.21 trillion rupees for infrastructure development for 2016/17 * Allocation for roads and highways development at Rs 550 billion * Capital expenditure on roads and rail development at Rs 2.18 trillion
- 3. 3 INVESTMENT * 100% foreign direct investment to be allowed in food processing industry * Promises further reforms in foreign direct investment policy in insurance, pension, asset recast companies DIVESTMENT * To encourage central public enterprises to divest own assets for raising resources for new projects