INDIA BUDGET 2014-2015 BY FINANCE MINISTER ARUN JAITLEY

INDIA BUDGET 2014-2015 BY FINANCE MINISTER ARUN JAITLEY

The
final Budget for the year is on the floor and will be shortly enacted to rule
the country. This time, the expectations from Budget were extremely high but
for the reasons best known to the Budget Makers, much has been left to be
addressed in future. Whatever may be the reasons for going cautious, if India
has to progress and survive in this competitive world and amongst aggressively
progressing neighbouring countries, then some out of the box thinking, dynamic
decision making and fearless actions are the only choices. We hope to look
forward an aggressive Indian regime determined to put India on self sustaining
growth course of over 10%. May be by 15th August our Hon’ble Prime Minister Mr.
Narendra Modi will chalk out his new economic and development programme and
unfurl the same with the flag of the nation.

Various Budget provisions have been comprehensively summarized herein below. We
note from the detailed budget document that, with regards to Income Tax budget
proposals several changes have been proposed which will have far reaching
impact on the economy and business. These subtle changes although very
important have not become the headlines of any media. Particularly changes
about advance against assets, survey / search rules, charitable institutions,
long term capital gains, dividend distribution tax, debt based mutual funds,
investment allowance, institutions governed by section 35, overseas borrowing
and divided, transfer pricing, FII income clarifications, MAT, TDS, anonymous
donation, presumptive taxation u/s 44AE, commodity transaction tax, compulsory
acquisitions, speculative gains, asset valuations, loan transactions u/s 269SS,
attachment of property etc. must be studied meticulously.

The Current
Economic Situation And The Challenges

Decisive
vote for change represents the desire of the people to grow, free
themselves from the curse of poverty and use the opportunity provided by
the society. Country in no mood to suffer unemployment, inadequate basic
amenities, lack of infrastructure and apathetic governance.

Challenging
situation due to Sub five per cent growth and double digit inflation.

Continued
slow-down in many emerging economies a threat to sustained global
recovery.

Recovery
seen with the growth rate of world economy projected at 3.6 per cent in
2014 vis-à-vis in 2013.

First
budget of this NDA government to lay down a broad policy indicator of the
direction in which we wish to take this country.

Steps
announced are only the beginning of the journey towards a sustained growth
of 7-8 per cent or above within the next 3-4 years along with
macro-economic stabilization.

Growing
aspirations of people will be reflected in the development strategy of the
Government led by the Prime Minister Shri Narendra Modi and its mandate of
“Sab ka Saath Sab ka Vikas”.

Need to
revive growth in manufacturing and infrastructure sectors.

Tax to GDP ratio must be improved and Non-tax revenues
increased.

Deficit and
Inflation

Decline in
fiscal deficit from 5.7% in 2011-12 to 4.5% in 2013-14 mainly achieved by
reduction in expenditure rather than by way of realization of higher
revenue.

Improvement
in current account deficit from 4.7 % in 2012-13 to year end level of 1.7%
mainly achieved through restriction on non-essential import and slow-down
in overall aggregate demand. Need to keep watch on CAD.

4.1 per
cent fiscal deficit a daunting task in the backdrop of two years of low
GDP growth, static industrial growth, moderate increase in indirect taxes,
subsidy burden and not so encouraging tax buoyancy.

The
government is committed to achieve this target. Road map for fiscal
consolidation outlines fiscal deficit of 3.6 % for 2015-16 and 3 % for
2016-17.

Inflation
has remain at elevated level with gradual moderation in WPI recently.

The problem
of black money must be fully addressed.

Bold
steps required to enhance economic activities and spur growth in the
economy.

Administrative
Initiatives

Sovereign
right of the Government to undertake retrospective legislation to be
exercised with extreme caution and judiciousness keeping in mind the
impact of each such measure on the economy and the overall investment
climate.

A stable
and predictable taxation regime which will be investor friendly and spur
growth.

Legislative
and administrative changes to sort out pending tax demands of more than `
4 lakh crore under dispute and litigation.

Resident
tax payers enabled to obtain on advance ruling in respect of their
income-tax liability above a defined threshold.

Measures
for strengthening the Authority for Advance Rulings.

Income-tax
Settlement Commission scope to be enlarged.

National
Academy for Customs & Excise at Hindupur in Andhra Pradesh.

The subsidy
regime to be made more targeted for full protection to the marginalized,
poor and SC/ST.

New Urea
Policy would be formulated.

Introduction
of GST to be given thrust.

High level
committee to interact with trade and industry on regular basis to
ascertain areas requiring clarity in tax laws is required to be set up.

Convergance
with International Financial Reporting Standard (IFRS) by Adoption of the
new Indian Accounting Standards (2nd AS) by Indian Companies.

Setting up
of Expenditure Management Commission to look into expenditure reforms.

Employment
exchanges to be transformed into career centres. A sum of ` 100 crore
provided.

Economic
Initiatives

Foreign Direct
Investment (FDI)

Government
to promote FDI selectively in sectors.

The
composite cap of foreign investment to be raised to 49 per cent with full
Indian management and control through the FIPB route.

The
composite cap in the insurance sector to be increased up to 49 per cent
from 26 per cent with full Indian management and control through the FIPB
route.

Requirement
of the built up area and capital conditions for FDI to be reduced from
50,000 square metres to 20,000 square metres and from USD 10 million to
USD 5 million respectively for development of smart cities.

The
manufacturing units to be allowed to sell its products through retail
including Ecommerce platforms.

Bank
Capitalization

Requirement
to infuse `.2,40,000 crore as equity by 2018 in our banks to be in line
with Basel-III norms

Capital of
banks to be raised by increasing the shareholding of the people in a
phased manner.

PSU Capital
Expenditure

PSUs will
invest through capital investment a total sum of ` 2,47,941 crores in the
current financial year.

Smart Cities

A sum of `
7060 crore is provided in the current fiscal for the project of developing
“one hundred Smart Cities’

Real Estate

Incentives
for Real Estate Investment Trusts (REITS). Complete pass through for the
purpose of taxation.

A modified
REITS type structure for infrastructure projects as the Infrastructure
Investment Trusts (INVITS).

These two
instruments to attract long term finance from foreign and domestic sources
including the NRIs .

Irrigation

Rs. 1000
crore provided for “Pradhan Mantri Krishi Sinchayee Yojna” for assured
irrigation.

Rural
Development

Shyama
Prasad Mukherji Rurban Mission for integrated project based infrastructure
in the rural areas.

Rs. 500
crore for “Deen Dayal Upadhyaya Gram Jyoti Yojana” for feeder separation
to augment power supply to the rural areas.

Rs. 14,389
crore provided for Pradhan Mantri Gram Sadak Yojna(PMGSY).

More
productive, asset creating and with linkages to agriculture and allied
activities wage employment would to be provided under MGNREGA.

Under
Ajeevika, the provision of bank loan for women SHGs at 4% to be extended
to another 100 districts.

Initial sum
of ` 100 crore for “Start Up Village Entrepreneurship Programme” for
encouraging rural youth to take up local entrepreneurship programs.

Allocation
for National Housing Bank increased to ` 8000 crore to support Rural
housing.

New
programme “Neeranchal” to give impetus to watershed development in the
country with an initial outlay of ` 2142 crores.

Backward
Region Grant Fund (BRGF) to be restructured to address intra-district
inequalities.

Scheduled
Caste/Scheduled Tribe

An amount
of ` 50,548 crore is proposed under the SC Plan and ` 32,387 crore under
TSP.

For the
welfare of the tribals “Van Bandhu Kalyan Yojna” launched with an initial
allocation of ` 100 crore.

Senior Citizen
& Differently Abled Persons

Varishtha
Pension Bima Yojana (VPBY) to be revived for a limited period from 15
August, 2014 to 14 August, 2015 for the benefit of citizens aged 60 years
and above.

A committee
will to examine and recommend how unclaimed amounts with PPF, Post Office,
saving schemes etc. can be used to protect and further financial interests
of the senior citizens?

Government
notified a minimum pension of Rs. 1000 per month to all subscriber members
of EP Scheme. Initial provision of Rs. 250 crore.

Increase in
mandatory wage ceiling of subscription to ` 15000. A provision of ` 250
crore in the current budget.

EPFO to
launch the “Uniform Account Number” Service for contributing members.

Scheme for
Assistance to Disabled Persons for purchase/fitting of Aids and Appliances
(ADIP) extended to include contemporary aids and assistive devices.

National
level institutes for Universal Inclusive Design, Mental Health
Rehabilitation and a Centre for Disability Sports to be established.

Assistance
to State Governments to establish fifteen new Braille Presses and
modernize ten existing Braille Presses.

Government
to print currency notes with Braille like signs for visibly challenged
persons.

Women &
Child Development

Outlay of
Rs. 50 crores for pilot testing a scheme on “Safety for Women on Public
Road Transport”.

Sum of Rs.
150 crores on a scheme to increase the safety of women in large cities.

“Crisis
Management Centres” in all the districts of NCT of Delhi this year
government and private hospitals.

A sum of
Rs. 100 crore is provided for “Beti Bachao, Beti Padhao Yojana”, a focused
scheme to generate awareness and help in improving the efficiency of
delivery of welfare services meant for women.

School
curriculum to have a separate chapter on gender mainstreaming.

Drinking Water
& Sanitation

20,000
habitations affected with arsenic, fluoride, heavy/ toxic elements,
pesticides/ fertilizers to be provided safe drinking water through
community water purification plants in next 3 years
“Swachh
Bharat Abhiyan” to cover every household with sanitation facility by the
year 2019.

Health and
Family Welfare

Free Drug
Service and Free Diagnosis Service to achieve “ Health For All”

Two
National Institutes of Ageing to be set up at AIIMS, New Delhi and Madras
Medical College, Chennai.

A national
level research and referral Institute for higher dental studies to be set
up.

AIIMS like
institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and
Poorvanchal in UP. A provision of ` 500 crores made.

12 new
government medical colleges to be set up.

States’
Drug Regulatory and Food Regulatory Systems to be strengthened by creating
new drug testing laboratories and strengthening the 31 existing State
laboratories.

15 Model
Rural Health Research Centres to be set up for research on local health
issues concerning rural population.

A national
programme in Mission Mode to halt the deteriorating malnutrition situation
in India to be put in place within six months.

Education

School Education

Government
would strive to provide toilets and drinking water in all the girls school
in first phase. An amount of ` 28635 crore is being funded for Sarv
Shiksha Abhiyan(SSA) and` 4966 crore for Rashtriya madhyamic Shiksha
Abhiyan (RMSA).

A School
Assessment Programme is being initiated at a cost of Rs. 30 crore.

Rs. 500
crore provided for “Pandit Madan Mohan Malviya New Teachers Training
Programme” to infuse new training tools and motivate teachers.

Rs. 100
crore provided for setting up virtual classrooms as Communication Linked
Interface for Cultivating Knowledge (CLICK) and online courses.

Higher Education

Jai Prakash
Narayan National Centre for Excellence in Humanities to be set up in MP.

Rs. 500
crore provided for setting up 5 more IITs in the Jammu, Chhattisgarh, Goa,
Andhra Pradesh and Kerala.

5 IIMs in
the States of HP, Punjab, Bihar, Odisha and Rajasthan.

Simplification
of norms to facilitate education loans for higher studies.

Information
Technology

Pan India
programme “Digital India” to with an outlay of ` 500 crore to be launched.
Programme
for promoting “Good Governance” to be launched .A sum of ` 100 crore
provided.

Information and
Broadcasting

Rs. 100
crore allocated for 600 new and existing Community Radio Stations.

Film
& Television Institute, Pune and Satyajit Ray Film &
Television Institute, Kolkata are proposed to be accorded status of
Institutes of national importance and a “National Centre for Excellence in
Animation, Gaming and Special Effects to be set up.

Rs. 100
crore is provided for Kisan TV, to disseminate real time information to
the farmers on issues such as new farming techniques, water conservation,
organic farming etc.

Urban
Development

Vision of
the Government is that 500 urban habitations to be provided support for
renewal of infrastructure and services in next 10 years through PPPs

Present
corpus of Pooled Municipal Debt Obligation Facility facility to be
enlarged to ` 50,000 Crore from ` 5000 crore.

Rs. 100
crore provided for Metro Projects in Lucknow and Ahemdabad.

Housing

Extended
additional tax incentive on home loans shall be provided to encourage
people, especially the young, to own houses.

Mission on
Low Cost Affordable Housing anchored in the National Housing Bank to be
set up.

A sum of `
4000 crores for NHB from the priority sector lending shortfall with a view
to increase the flow of cheaper credit for affordable housing to the urban
poor/EWS/ LIG segment is provided.

Slum
development to be included in the list of Corporate Social Responsibility
(CSR) activities to encourage the private sector to contribute more.

Minorities

A programme
for the up gradation of skills and training in ancestral arts for
development for the minorities “Up gradation of Traditional Skills in
Arts, Resources and Goods” to be launched.

An
additional amount of ` 100 crores for Modernization of Madarsas.

Agriculture

Government
to establish two more Agricultural Research Institute of excellence in
Assam and Jharkhand with an initial sum of ` 100 crore.

An amount
of ` 100 crores set aside for “Agri-tech Infrastructure Fund”.

Rs. 200
crore provided to open Agriculture Universities in Andhra Pradesh and
Rajasthan and Horticulture Universities in Telangana and Haryana.

A scheme to
provide every farmer a soil health card in a Mission mode will be
launched. ` 100 crore has been provided for this purpose and additional `
56 crores to set up 100 Mobile Soil Testing Laboratories across the
country.

To meet the
vagaries of climate change a “National Adaptation Fund” with an initial
sum an amount of ` 100 crore will be set up.

A
sustainable growth of 4% in Agriculture will be achieved.

Technology
driven second green revolution with focus on higher productivity and
including “Protein revolution” will be area of major focus.

To mitigate
the risk of Price volatility in the agriculture produce, a sum of ` 500
crore is provided for establishing a “Price Stabilization Fund”.

Central
Government to work closely with the State Governments to re-orient their
respective APMC Acts.

Sum of Rs.
50 crores provided for the development of indigenous cattle breeds and an
equal amount for starting a blue revolution in inland fisheries.

Transformation
plan to invigorate the warehousing sector and significantly improve
post-harvest lending to farmers.

Agriculture
Credit

To provide
institutional finance to landless farmers, it is proposed to provide
finance to 5 lakh joint farming groups of “Bhoomi Heen Kisan” through
NABARD.

A target of
` 8 lakh crore has been set for agriculture credit during 2014-15.

Corpus of
Rural Infrastructure Development Fund (RIDF) raised by an additional `
5000 crores from the target given in the Interim Budget to ` 25000 crores.

Allocation
of ` 5,000 crore provided for the Warehouse Infrastructure Fund.

“Long Term
Rural Credit Fund” to set up for the purpose of providing refinance
support to Cooperative Banks and Regional Rural Banks with an initial
corpus of ` 5,000 crore.

Amount of `
50,000 crore allocated for Short Term Cooperative Rural Credit.

Sum of `
200 crore for NABARD’s Producers Development and Upliftment Corpus
(PRODUCE) for building 2,000 producers organizations over the next two
years.

Food Security

Restructuring
FCI, reducing transportation and distribution losses and efficacy of PDS
to be taken up on priority.

Government
committed to provide wheat and rice at reasonable prices to the weaker
sections of the society.

Government
when required will undertake open market sales to keep prices under
control.

Industry

Central
Government Departments and Ministries to integrate their services with the
e- Biz -a single window IT platform- for services on priority by 31
December this year.

Rs. 100
crore provided for setting up a National Industrial Corridor Authority.

Amritsar
Kolkata Industrial master planning to be completed expeditiously.

Master
planning of 3 new smart cities in the Chennai-Bengaluru Industrial
Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra
Pradesh and Tumkur in Karnataka to be completed.

Perspective
plan for the Bengaluru Mumbai Economic corridor (BMEC) and Vizag-Chennai
corridor to be completed with the provision for 20 new industrial
clusters.

Development
of industrial corridors with emphasis on Smart Cities linked to transport
connectivity to spur growth in manufacturing and urbanization will be
accelerated.

Proposed to
establish an Export promotion Mission to bring all stakeholders under one
umbrella.

Apprenticeship
Act to be suitably amended to make it more responsive to industry and
youth.

Micro Small and
Medium Enterprises (MSME) Sector

Skill India
to be launched to skill the youth with an emphasis on employability and
entrepreneur skills.

Committee
to examine the financial architecture for MSME Sector, remove bottlenecks
and create new rules and structures to be set up and give concrete
suggestions in three months.

Fund of
Funds with a corpus of `.10,000 crore for providing equity through venture
capital funds, quasi equity, soft loans and other risk capital specially
to encourage new startups by youth to be set up.

Corpus of `
200 crore to be set up to establish Technology Centre Network.

Definition
of MSME to be reviewed to provide for a higher capital ceiling.

Programme
to facilitate forward and backward linkages with multiple value chain of
manufacturing and service delivery to be put in place.

Entrepreneur
friendly legal bankruptcy framework will be developed for SMEs to enable
easy exit.

A
nationwide “District level Incubation and Accelerator Programme” to be
taken up for incubation of new ideas and necessary support for
accelerating entrepreneurship.

Textiles

Rs. 50
crore is provided to set up a Trade Facilitation Centre and a Crafts Museum
to develop and promote handloom products and carry forward the rich
tradition of handlooms of Varanasi.

Sum of Rs.
500 crore for developing a Textile mega-cluster at Varanasi and six more
at Bareilly, Lucknow, Surat, Kutch, Bhagalpur and Mysore.

Rs. 20
crore to set up a Hastkala Academy for the preservation, revival, and
documentation of the handloom/handicraft sector in PPP mode in Delhi.

Rs. 50
crore is provided to start a Pashmina Promotion Programme (P-3) and
development of other crafts of Jammu & Kashmir.

Infrastructure

An
institution to provide support to mainstreaming PPPPs called 4PIndia to be
set up with a corpus of ` 500 crores.

Shipping

Rs. 11635
crore will be allocated for the development of Outer Harbour Project in
Tuticorin for phase I.

SEZs will
be developed in Kandla and JNPT.

Comprehensive
policy to be announced to promote Indian ship building industry.

Inland
Navigation

Project on Ganges
called “ Jal Marg Vikas’ to be developed between Allahabad and Haldia.

New
Airports

Scheme for
development of new airports in Tier I and Tier II Cities to be launched.

Roads sector

Sector
needs huge amount of investment along with debottlenecking from maze of
clearances.

An
investment of an amount of ` 37,880 crores in NHAI and State Roads is
proposed which includes ` 3000 crores for the North East.

Target of
NH construction of 8500 km will be achieved in current financial year.

Work on
select expressways in parallel to the development of the Industrial
Corridors will be initiated. For project preparation NHAI shall set aside
a sum of ` 500 crore.

Energy

Rs. 100
crore is allocated for a new scheme “Ultra-Modern Super Critical Coal
Based Thermal Power Technology.”

Comprehensive
measures for enhancing domestic coal production are being put in place.

Adequate
quantity of coal will be provided to power plants which are already
commissioned or would be commissioned by March 2015.

An exercise
to rationalize coal linkages to optimize transport of coal and reduce cost
of power is underway.

New &
Renewable Energy

Rs. 500
crores provided for Ultra Mega Solar Power Projects in Rajasthan, Gujarat,
Tamil Nadu, Andhra Pradesh and Laddakh.

Rs. 400
crores provided for a scheme for solar power driven agricultural pump sets
and water pumping stations.

Rs. 100
crore provided for the development of 1 MW Solar Parks on the banks of
canals.

A Green
Energy Corridor Project is being implemented to facilitate evacuation of
renewable energy across the country.

Petroleum
& Natural Gas

Production
and exploitation of Coal Bed Methane reserves will be accelerated.

Possibility
of using modern technology to revive old or closed wells to be explored.

Usage of
PNG to be rapidly scaled up in a Mission mode.

Proposal to
develop pipelines using appropriate PPP models.

Mining

Changes, if
necessary, in the MMDR Act, 1957 to be introduced to encourage investment
in mining sector and promote sustainable mining practices.

Financial Sector

Capital Market

Ongoing
process of consultations with all the stakeholders on the enactment of the
Indian Financial Code and reports of the Financial Sector Legislative
Reforms Commission (FSLRC) to be completed.

Government
in close consultation with the RBI to put in place a modern monetary
policy framework.

Following
measures will be taken to energize Capital markets:

Introduction
of uniform KYC norms and inter-usability of the KYC records across the
entire financial sector.

Introduce
one single operating demat account

Uniform tax
treatment for pension fund and mutual fund linked retirement plan

Banking And
Insurance Sector

Banking

Time bound
programme as Financial Inclusion Mission to be launched on 15 August this
year with focus on the weaker sections of the society.

Banks to be
encouraged to extend long term loans to infrastructure sector with
flexible structuring.

Banks to be
permitted to raise long term funds for lending to infrastructure sector
with minimum regulatory pre-emption such as CRR, SLR and Priority Sector
Lending (PSL).

RBI to
create a framework for licensing small banks and other differentiated
banks.

Differentiated
banks serving niche interests, local area banks, payment banks etc. are
contemplated to meet credit and remittance needs of small businesses,
unorganized sector, low income households, farmers and migrant work force.

Six new
Debt Recovery Tribunals to be set up.

For venture
capital in the MSME sector, a `10,000 crore fund to act as a catalyst to
attract private Capital by way of providing equity , quasi equity, soft
loans and other risk capital for start-up companies with suitable tax
incentives to participating private funds to be established.

Insurance Sector

The pending
insurance laws (amendment) Bill to be immediately brought for
consideration of the Parliament.

The
regulatory gap under the Prize Chits and Money Circulation Scheme (Banking)
Act, 1978 will be bridged.

Small Savings

Kissan
Vikas Patra (KVP) to be reintroduced.

A special
small savings instrument to cater to the requirements of educating and
marriage of the Girl Child to be introduced.

A National
Savings Certificate with insurance cover to provide additional benefits
for the small saver.

In the PPF
Scheme, annual ceiling will be enhanced to Rs.1.5 lakh p.a. from Rs.1 lakh
at present.

Defence
& Internal Security

A further
sum of Rs. 1000 crore to meet requirement for “One Rank One Pension”.

Capital
outlay for Defence increased by Rs. 5000 crore including a sum of Rs. 1000
crore for accelerating the development of the Railway system in the border
areas.

Urgent steps
would also be taken to streamline the procurement process to make it
speedy and more efficient.

Rs. 100
crore is provided for construction of a war memorial in the Princes Park,
which will be supplemented by a War Museum. I am allocating a sum of ` 100
crore for this purpose.

Rs. 100
crore is provided to set up a Technology Development Fund for Defence.

Internal
Security

Rs. 3000
crore is provided in the current financial year for modernization of state
police forces.

Adequate
allocation for Additional Central Assistance for Left Wing Extremist
Affected districts.

Rs. 2250
crore provided to strengthen and modernize border infrastructure.

Rs. 990
crore allocated for the socio economic development of the villages along
the borders.

A sum of
Rs. 150 crore ear-marked for the construction of Marine Police Station,
Jetties and for the purchase of boats etc.

Rs. 50
crores provided for construction of National Police Memorial.

Culture
& Tourism

Rs. 200
crore provided to build the Statue of unity(National project).

Facility of
Electronic Travel Authorization (e-Visa) to be introduced in phased manner
at nine airports in India.

Countries
to which the Electronic Travel authorisation facility would be extended
would be identified in a phased manner.

Rs. 500
crore provided for developing 5 tourist circuits around specific themes.

Rs. 100
crore provided for National Mission on Pilgrimage Rejuvenation and
Spiritual Augmentation Drive (PRASAD).

Rs. 200
crore provided for National Heritage City Development and Augmentation
Yojana (HRIDAY).

Rs. 100
crore provided for Archaeological sites preservation.

Sarnath-Gaya-Varanasi
Buddhist circuit to be developed with world class tourist amenities to
attract tourists from all over the world.

Water Resources
and cleaning of Ganga

Rs. 100
crore provided for Detailed Project Reports for linking of rivers.

Rs. 2037
crores provided for Integrated Ganga Conservation Mission “NAMAMI GANGE”.

Rs. 100
crore provided for Ghat development and beautification at Kedarnath,
Haridwar, Kanpur, Varanasi, Allahabad, Patna and Delhi.

NRI Fund
for Ganga will be set up.

Science and
Technology

Government
to strengthen at least five institutions as Technical Research Centres.
Development
of Biotech clusters in Faridabad and Bengaluru.
Nascent
agri-biotech cluster in Mohali to be scaled up. In addition, two new
clusters, in Pune and Kolkata to be established.
Global
partnerships will be developed under India’s leadership to transform the
Delhi component of the International Centre for Genetic Engineering and
Biotechnology (ICGEB) into a world-leader in life sciences and
biotechnology.
Several
major space missions planned for 2014-15.

Sports and Youth
Affairs

Rs. 200
crore provided for upgrading the indoor and outdoor sports stadiums in
Jammu and Kashmir Valley to international standards.
Rs. 100
crore provided for sports university in Manipur.
India to
start an annual event to promote Unique sports traditions in the Himalayan
region games.
Rs. 100
crore provided for the training of sports women and men for forthcoming
Asian games.
A “Young
Leaders Programme” with an initial allocation of ` 100 crore to be set up.

North Eastern
States

Rs. 100
crore provided for development of organic farming in North Eastern States.

Rs. 1000
crore provided for development of rail connectivity in the North Eastern
Region.

To provide
a strong platform to rich cultural and linguistic identity of the
North-East, a new 24×7 channel called “Arun Prabha” will be launched.

Andhra Pradesh
and Telangana

Government
committed to addressing the issues relating to development of Andhra Pradesh
and Telangana in the AP Re-organization Act, 2014. Provision made by
various Ministries/Departments to fulfill the obligation of Union
Government.

NCT of Delhi

Rs. 200
crore for power reforms and ` 500 crore for water reforms to make Delhi a
truly World Class City.

Rs. 50
crore provided to solve the long term water supply issues to the capital
region. Construction of long pending Renuka Dam to be taken up on
priority.

Andaman and
Nicobar Island and Puducherry

Rs. 150
crore provided to tide over communication related problems of the Island.

Rs. 188
crore to Puducherry for meeting commitments for Disaster preparedness.

Displaced
Kashmiri Migrants

Rs. 500
crore provided to support displaced Kashmiri migrants for rebuilding their
lives.

Himalayan
Studies

Rs. 100
crore provided to set up a National Centre for Himalayan Studies in
Uttarakhand.

Budget Estimates

Mandate to
be fulfilled without compromising fiscal consolidation.

Non-plan
Expenditure of Rs. 12,19,892 crore with additional provision for
fertilizer subsidy and Capital expenditure for Armed forces.

Rs.
5,75,000 crore Plan expenditure – increase of 26.9 per cent over actuals
of 2013-14.

Plan
increase targeted towards Agriculture, capacity creation in Health and
Education, Rural Roads and National Highways Infrastructure, Railways
network expansion, clean energy initiatives, development of water
resources and river conservation plans.

Total
expenditure of Rs. 17,94,892 crore estimated.

Gross Tax
receipts of Rs. 13,64,524 crore estimated.

Net to
centre of Rs. 9,77,258 crore estimated.

Fiscal
deficit of 4.1% of GDP and Revenue deficit of 2.9% estimated.

New
Statement to separately show plan allocation made for North Eastern
Region. Allocation of Rs. 53,706 crore for North East Regions.

Allocation
of Rs. 50,548 crore under SCSP and Rs. 32,387 under TSP.

Allocation
for women at Rs. 98,030 crore and for children at Rs. 81,075 crore.

Tax
Proposals

Ambitious
Revenue Collection Targets in Interim Budget. Proposed tax changes
factored in the Budget Estimates 2014-15
Measures to
revive the economy, promote investment in manufacturing, rationalize tax
provisions to reduce litigation, address the problem of inverted duty
structure in certain areas. Tax reliefs to individual tax payers.

Direct Tax
Proposals

Personal
Income-tax exemption limit raised by Rs. 50,000/- that is, from Rs. 2 lakh
to Rs. 2.5 lakh in the case of individual taxpayers, below the age of 60
years. Exemption limit raised from Rs. 2.5 lakh to Rs. 3 lakh in the case
of senior citizens.
No change
in the rate of surcharge either for the corporates or the individuals,
HUFs, firms etc.
The
education cess to continue at 3 percent.
Investment
limit under section 80C of the Income-tax Act raised from Rs. 1 lakh to
Rs. 1.5 lakh.
Deduction
limit on account of interest on loan in respect of self occupied house
property raised from Rs. 1.5 lakh to Rs. 2 lakh.
Conducive
tax regime to Infrastructure Investment Trusts and Real Estate Investment
Trusts to be set up in accordance with regulations of the Securities and
Exchange Board of India.
Investment
allowance at the rate of 15 percent to a manufacturing company that
invests more than Rs. 25 crore in any year in new plant and machinery. The
benefit to be available for three years i.e. for investments upto
31.03.2017.
Investment
linked deduction extended to two new sectors, namely, slurry pipelines for
the transportation of iron ore, and semi-conductor wafer fabrication
manufacturing units.
10 year tax
holiday extended to the undertakings which begin generation, distribution
and transmission of power by 31.03.2017.
Income
arising to foreign portfolio investors from transaction in securities to
be treated as capital gains.
Concessional
rate of 15 percent on foreign dividends without any sunset date to be
continued.
The
eligible date of borrowing in foreign currency extended from 30.06.2015 to
30.06.2017 for a concessional tax rate of 5 percent on interest payments.
Tax incentive extended to all types of bonds instead of only
infrastructure bonds.
Introduction
of a “Roll Back” provision in the Advanced Pricing Agreement (APA) scheme
so that an APA entered into for future transactions is also applicable to
international transactions undertaken in previous four years in specified
circumstances.
Introduction
of range concept for determination of arm’s length price in transfer
pricing regulations.
To allow
use of multiple year data for comparability analysis under transfer
pricing regulations.
To remove
tax arbitrage, rate of tax on long term capital gains increased from 10
percent to 20 percent on transfer of units of Mutual Funds, other than
equity oriented funds.
Income and
dividend distribution tax to be levied on gross amount instead of amount
paid net of taxes.
In case of
non deduction of tax on payments, 30% of such payments will be disallowed
instead of 100 percent.
Government
to review the DTC in its present shape and take a view in the whole
matter.
60 more
Ayakar Seva Kendras to be opened during the current financial year to
promote excellence in service delivery.
Net Effect
of the direct tax proposals to result in revenue loss of Rs..22,200 crore.

Indirect Tax
Proposals

To boost
domestic manufacture and to address the issue of inverted duties, basic
customs duty (BCD) reduced on certain items.

To
encourage new investment and capacity addition in the chemicals and
petrochemicals sector, basic customs duty reduced on certain items.

Steps taken
to boost domestic production of electronic items and reduce our dependence
on imports. These include imposition of basic customs duty on certain
items falling outside the purview of IT Agreement, exemption from SAD on
inputs/ components for PC manufacturing, imposition of education cess on
imported electronic products for parity etc.

Colour
picture tubes exempted from basic customs duty to make cathode ray TVs
cheaper and more affordable to weaker sections.

To
encourage production of LCD and LED TVs below 19 inches in India, basic
customs duty on LCD and LED TV panels of below 19 inches reduced from 10
percent to Nil.

To give an
impetus to the stainless steel industry, increase in basic customs duty on
imported flat-rolled products of stainless steel from 5 percent to 7.5
percent.

Concessional
basic customs duty of 5 percent extended to machinery and equipment
required for setting up of a project for solar energy production.

Specified
inputs for use in the manufacture of EVA sheets and back sheets and flat
copper wire for the manufacture of PV ribbons exempted from basic customs
duty.

Reduction
in basic customs duty from 10 percent to 5 percent on forged steel rings
used in the manufacture of bearings of wind operated electricity
generators. Exemption from SAD of 4 percent on parts and raw materials
required for the manufacture of wind operated generators.

Concessional
basic customs duty of 5 percent on machinery and equipment required for
setting up of compressed biogas plants (Bio-CNG).

Anthracite
coal, bituminous coal, coking coal, steam coal and other coal to attract
2.5 per cent basic customs duty and 2 per cent CVD to eliminate all
assessment disputes and transaction costs associated with testing of
various parameters of coal.

Basic
customs duty on metallurgical coke increased from Nil to 2.5 percent in
line with the duty on coking coal.

Duty on
ship breaking scrap and melting scrap of iron or steel rationalized by
reducing the basic customs duty on ships imported for breaking up from 5
percent to 2.5 percent.

To prevent
mis-use and avoid assessment disputes, basic customs duty on
semiprocessed, half cut or broken diamonds, cut and polished diamonds and
coloured gemstones rationalized at 2.5 percent.

To
encourage exports, pre-forms of precious and semi-precious stones exempted
from basic customs duty.

Duty free
entitlement for import of trimmings, embellishments and other specified
items increased from 3 percent to 5 percent of the value of their export,
for readymade garments.

Export duty
on bauxite increased from 10 percent to 20 percent.

For
passenger facilitation, free baggage allowance increased from Rs. 35,000
to Rs. 45,000.

To
incentivize expansion of processing capacity, reduction in excise duty on
specified food processing and packaging machinery from 10 percent to 6
percent.

Reduction
in the excise duty from 12 percent to 6 percent on footwear of retail
price exceeding ` 500 per pair but not exceeding Rs. 1,000 per pair.

Withdraw
concessional excise duty (2 percent without Cenvat benefit and 6 percent
with Cenvat benefit) on smart cards and a uniform excise duty at 12
percent.

To develop
renewable energy, various items exempted from excise duty.

Exemption
to PSF and PFY manufactured from plastic waste and scrap including PET
bottles from excise duty with effect from 29th June, 2010 to 7th May,
2012.

Prospective
levy of a nominal duty of 2 percent without Cenvat benefit and 6 percent
with Cenvat benefit on such PSF and PFY.

Concessional
excise duty of 2 percent without Cenvat benefit and 6 percent with Cenvat
benefit on sports gloves.

Specific
rates of excise duty increased on cigrettes in the range of 11 per cent to
72 per cent.

Excise duty
increased from 12 percent to 16 percent on pan masala, from 50 percent to
55 percent on unmanufactured tobacco and from 60 percent to 70 percent on
gutkha and chewing tobacco.

Levy of an
additional duty of excise at 5 percent on aerated waters containing added
sugar.

To
finance Clean Environment initiatives, Clean Energy Cess increased from
Rs. 50 per tonne to Rs. 100 per tonne.

Service
tax

To broaden
the tax base in Service Tax, sale of space or time for advertisements in
broadcast media, extended to cover such sales on other segments like
online and mobile advertising. Sale of space for advertisements in print
media however would remain excluded from service tax. Service provided by
radio-taxis brought under service tax.

Services by
air-conditioned contract carriages and technical testing of newly
developed drugs on human participants brought under service tax.

Provision
of services rules to be amended and tax incidence to be reduced on
transport of goods through coastal vessels to promote Indian Shipping
industry.

Services
provided by Indian tour operators to foreign tourists in relation to a
tour wholly conducted outside India to be taken out of the tax net and
Cenvat credit for services of rent-a-cab and tour operators to be allowed
to promote tourism.

Service tax
exempted on loading, unloading, storage, warehousing and transportation of
cotton, whether ginned or baled.

Services
provided by the Employees’ State Insurance Corporation for the period
prior to 1st July 2012 exempted, from service tax.

Exemption
available for specified micro insurance schemes expanded to cover all life
micro-insurance schemes where the sum assured does not exceed Rs. 50, 000
per life insured.

For safe
disposal of medical and clinical wastes, services provided by common
biomedical waste treatment facilities exempted.

Tax
proposals on the indirect taxes side are estimated to yield Rs. 7525
crore.

24X7
customs clearance facility extended to 13 more airports in respect of all
export goods and to 14 more sea ports in respect of specified import and
export goods to facilitate cargo clearance.

‘Indian
Customs Single Window Project’ to facilitate trade, to be implemented.

The scheme
of Advance Ruling in indirect taxes to be expanded to cover resident
private limited companies. The scope of Settlement Commission to be
enlarged to facilitate quick dispute resolution.