Union Budget 2016-17

union budget 2016-17

Question: Consider the following statements about Union Budget 2016-17 presented on 29 February 2016-
i. 100% village electrification by 1st May, 2018.
ii. New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of Rs 655 crore
iii. 5000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
iv. ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode
Which of the above given statements is/are correct?
(a) Only (i) and (iv)
(b) Only (i), (ii) and (iv)
(c) Only (i),(iii) and(iv)
(d) All of the above
Ans (b)
Related facts:

  • On 29 February 2016 Union Finance Minister Arun Jaitley presented Union Budget 2016-17 in the Parliament.
  • The Major Highlights of the Union Budget 2016-17 are as follows:
  • Growth of Economy accelerated to 7.6% in 2015-16.
  • Foreign exchange reserves touched highest ever level of about 350 billion US dollars.

Agriculture and Farmers’ Welfare:

  • Farmer’s income to be doubled by 2022.
  • Allocation for Agriculture and Farmers’ welfare is Rs 35,984 crore
  • ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
  • A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about Rs 20,000 crore.
  • Programme for sustainable management of ground water resources with an estimated cost of Rs 6,000 crore will be implemented through 3 multilateral funding
  • 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up under MGNREGA.
  • Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.
  • 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years.
  • Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and ‘Organic Value Chain Development in North East Region’.
  • Unified Agricultural Marketing E-Platform to be dedicated to the Nation on the Birthday of Dr. Ambedkar on 14th April, 2016.
  • Allocation under Pradhan Mantri Gram Sadak Yojana increased to Rs 19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.
  • To reduce the burden of loan repayment on farmers, a provision of Rs 15,000 crore has been made in the Budget Estimate(BE) 2016-17 towards interest subvention.
  • Allocation under Prime Minister Fasal Bima Yojana Rs 5,500 crore.
  • Rs 850 crore for four dairying projects – ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds

Rural Sector:

  • Allocation for rural sector – Rs 87,765 crore.
  • Rs 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
  • Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission
  • A sum of Rs 38,500 crore allocated for MGNREGA.
  • 300 Rurban Clusters will be developed under the Shyama Prasad 4 Mukherjee Rurban Mission
  • 100% village electrification by 1st May, 2018.
  • A new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years.
  • New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of Rs 655 crore.

Social sector including health care:

  • Allocation for social sector including education and health care – Rs 1,51,581 crore.
  • Rs 2,000 crore allocated for initial cost of providing LPG connections to BPL families
  • New health protection scheme will provide health cover up to One lakh rupees per family. For senior citizens an additional top-up package up to Rs 30,000 will be provided.
  • 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
  • National Dialysis Services Programme’ to be started under National Health Mission through PPP mode
  • “Stand Up India Scheme” to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs.
  • Allocation of Rs 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru Gobind Singh.

Education, Skills and Job Creation:

  • 62 new Navodaya Vidyalayas will be opened
  • Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions
  • Higher Education Financing Agency to be set-up with initial capital base of Rs 1000 Crores.

Skill Development:

  • Allocation for skill development – Rs 1804. crore.
  • 1500 Multi Skill Training Institutes to be set-up.
  • National Board for Skill Development Certification to be setup in partnership with the industry and academia.

Infrastructure and Investment:

  • Total investment in the road sector, including PMGSY allocation, would be Rs 97,000 crore during 2016-17.
  • India’s highest ever kilometres of new highways were awarded in 2015. To approve nearly 10,000 kms of National Highways in 2016-17.
  • Allocation of Rs 55,000 crore in the Budget for Roads. Additional Rs 15,000 crore to be raised by NHAI through bonds.
  • Total outlay for infrastructure is Rs 2,21,246 crore.
  • Comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation to be drawn up.
  • 100% FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India.

Financial Sector Reforms:

  • A comprehensive Code on Resolution of Financial Firms to be introduced.
  • Statutory basis for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016.
  • RBI to facilitate retail participation in Government securities.
  • Allocation of Rs 25,000 crore towards recapitalization of Public Sector Banks.
  • Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs 1,80,000 crore.
  • General Insurance Companies owned by the Government to be listed in the stock exchanges.

Governance and ease-of-Dong Business:

  • Bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar framework to be introduced.
  • Introduce DBT on pilot basis for fertilizer.
  • Price Stabilization Fund with a corpus of Rs 900 crore to help maintain stable prices of Pulses
  • “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism.

Fiscal Discipline:

  • Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.
  • Revenue Deficit target from 2.8% to 2.5% in RE 2015-16.
  • Total expenditure projected at Rs 19.78 lakh crore.
  • Plan expenditure pegged at Rs 5.50 lakh crore under Plan, increase of 15.3%.
  • Non-Plan expenditure kept at Rs 14.28 lakh crores.
  • Special emphasis to sectors such as agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure.
  • Mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.
  • Plan / Non-Plan classification to be done away with from 2017-18.

Relief to Small Tax Payers:

  • Raise the ceiling of tax rebate under section 87A from Rs 2000 to Rs 5000 to lessen tax burden on individuals with income up to Rs 5 Lakhs.

Corporate Tax rate proposals:

  • New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.
  • Lower the corporate tax rate for the next financial year for relatively small enterprises i.e companies with turnover not exceeding Rs 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.
  • 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases.
  • 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
  • Exemption of service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.

Make in India:

  • Changes in customs and excise duty rates on certain inputs to reduce costs and improve competitiveness of domestic industry in sectors like Information technology hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair.

Promoting affordable housing:

  • 100% deduction for profits to an undertaking in housing project for flats up to 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.

Resource Mobilization for Agriculture Rural Economy and Clean Environment:

  • Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs 10 lakh per annum.
  • Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above Rs 1 crore.
  • Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs ten lakh and purchase of goods and services in cash exceeding Rs two lakh.
  • Securities Transaction tax in case of ‘Options’ is proposed to be increased from .017% to .05%.
  • Infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles 13 and SUVs. No credit of this cess will be available nor credit of any other tax or duty be utilized for paying this cess.
  • Excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery [excluding silver jewellery, other than studded with diamonds and some other precious stones], with a higher exemption and eligibility limits of Rs 6 crores and Rs 12 crores respectively.
  • ‘Clean Energy Cess’ levied on coal, lignite and peat renamed to ‘Clean Environment Cess’ and rate increased from Rs 200 per tonne to Rs 400 per tonne.
  • Excise duties on various tobacco products other than beedi raised by about 10 to 15%.
  • Assignment of right to use the spectrum and its transfers has been deducted as a service leviable to service tax and not sale of intangible goods.
  • 11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to be opened.

Reference:
http://indiabudget.nic.in/
http://indiabudget.nic.in/ub2016-17/bh/bh1.pdf
http://indiabudget.nic.in/ub2016-17/keybud/keybud2016.pdf