UNION BUDGET 2014: HIGHLIGHTS

UNION BUDGET 2014: HIGHLIGHTS

Fiscal Deficit & Revenue Deficit

• Fiscal deficit target of 4.1 percent of GDP for 2014/15
• Fiscal deficit seen at 3.6 percent of GDP in 2015/16
• Fiscal deficit forecast to fall to 3 per cent of GDP in 2016/17
• Revenue deficit pegged at 2.9% of GDP 2014/15

Current Account Deficit & Forex

• India’s current account deficit has improved dramatically from 4.7% of GDP in 2012-13 to 1.7% in 2013-14
• Current account deficit to be contained at 2.1 pc of GDP in 2014-15
• India’s foreign exchange reserves increased from US $ 292.0 billion at the end of March 2013 to US $ 304.2 billion at the end March, 2014​

Growth

• GDP growth remained at 4.7% in 2013-14 and at 4.6% in the fourth quarter of the financial year.
• GDP growth in 2014/15 estimated at 5.4-5.9 per cent.
• Aims for sustained growth of 7-8 percent in the next 3-4 years

Taxation

• Aims to approve goods and services tax by end of this year
• Will not change rules on retrospective taxation
• Extends 5 percent withholding tax on corporate bonds until June 30 2017
• Income tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3 lakh
• Government expects Rs 9.77 lakh crore revenue crore from taxes
• Long term capital gain tax for mutual funds doubled to 20 per cent; lock-in period increased to three years
• Net effect of direct tax proposals is revenue loss of Rs 22,200 crore
• Tax proposals on indirect tax front would yield Rs. 7,525 crore 

Investment

• Raises limit on foreign direct investment in defence sector from 26 percent to 49 percent
• Raises FDI limit in insurance sector from 26 percent to 49 percent
• Earmarks Rs 7060 Crore to create 100 “smart cities”
• Proposes Rs 4000 crore for affordable housing through national housing bank and extends tax incentives for housing loans
• Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs 1 lakh.
• Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh 

Spending

• Capital outlay for defence raised by 50 billion rupees over interim budget
• Proposes Rs 5000 crore for warehousing capacity; 100 billion rupees of private capital for start-up companies; and 378 billion rupees of investment in national and state highways 

Subsidies

• Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become more focused on asset creation
• Proposes Rs 8000 crore for rural housing scheme

Industry

• Industry grew by just 1.0 per cent in 2012-13.
• Slowed further in 2013-14, posting a modest increase of 0.4 per cent

Services

• The service industry consisted of 57% of GDP in 2013-14, up by 6 percentage points in 2001.
• India has the second fastest growing services sector with its Compound Annual Growth Rate at 9.0 per cent, just below China’s 10.9 per cent, during 2001 to 2012.
• Despite deceleration, services GDP growth was 6.8 pc was above the 4.7 pc overall GDP in 2013/14
• India’s increase in share in world services exports from 0.6 pc in 1990 to 3.3 pc in 2013
• India ranked 12th in terms of services GDP in 2012 among the world’s top 15 countries in terms of GDP (at current prices).
• India has the second fastest growing services sector with its CAGR at 9.0 per cent, just below China’s 10.9 per cent, during 2001 to 2012.

Agriculture

• Will focus on achieving 4 growth per year in agriculture
• Proposes a long-term rural credit fund with an initial corpus of Rs 5000 crore
• Rs 100 crore for development of organic farming

Social sector

• Pension Scheme to be revived for a year (Aug 15-14) for citizens above 60
• Rs 50,548 crore for SC welfare schemes
• Rs 32,387 crore for ST welfare schemes 

Infrastructure

• Earmarks Rs 500 crore for 24×7 uninterrupted power in all homes
• Rs 100 crore for metro projects in Lucknow and Ahmedabad
• Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called ‘Namami Gange’
• Rs 200 crore for world-class sports stadium in Jammu and Kasmir
• Rs 1000 crore to enhance rail connectivity in the Northeast
• Rs 2250 crore for the development and modernization of the border infrastructure
• A project on the river Ganga called ‘Jal Marg Vikas’ for inland waterways between Allahabad and Haldia; Rs 4,200 crore set aside for the purpose
• War memorial to be set up along with a war museum; Rs 100 crore set aside for this 

Education

• Five more IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
• Five more IITs in Jammu, Chattisgarh, Goa, Andhra Pradesh and Kerala.
• Four more AIIMS like institutions to come up in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in Uttar Pradesh 

Tourism

• E-Visas to be introduced at 9 airports
• A provision of Rs 500 crore for five tourism sector.

Banking

• Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5 lakh.
• Set aside Rs 11,200 crore for PSU banks capitalisation
• PSUs to invest to over Rs 2.47 lakh crore this fiscal 

Others

• Earmarks Rs 200 crore for Sardar Patel statue
• Proposes Rs 150 crore for improving women safety
• Government proposes to launch Digital India’ programme to ensure broad band connectivity at village level
• Rs 100 crore scheme to support about 600 new and existing Community Radio Stations
• Rs 150 crore for Communication facilities in Andaman and Nicobar Islands
• Rs 188 crore for disaster preparedness in Puducherry
• Rs 3,600 crore for providing safe drinking water
• Rs 200 crore to make Delhi a world class city for social welfare and Rs 500 crore for energy
• Kisan Vikas Patra to be reintroduced, National Savings Certificate with insurance cover to be launched
• ‘Pandit Madan Mohan Malviya New Teachers Training Programme’ launched with initial sum of Rs 500 crore
• Government provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants
• Foodgrains production to go up to 264.4 MT in 2013/14