Key Budget Highlights: FISCAL DEFICIT * Accepts fiscal deficit target of 4.1 percent of GDP for 2014/15 * Fiscal deficit seen at 3.6 percent of GDP in 2015/16 * Finance Minister says: We cannot spend beyond our means * Tax-to-GDP ratio must be raised GROWTH * Aims for sustained growth of 7-8 percent in the next 3-4 years * Finance minister says he is bound to usher in policies for higher growth, lower inflation TAXATION * Jaitley vows to maintain a stable tax environment but stops short of scrapping rules on retrospective tax * All pending cases of retrospective tax for indirect transfers to be examined by committee before action is taken * Government will not ordinarily bring any change retrospectively that creates a new liability, Jaitley says * Aims to approve goods and services tax by end of this year * Extends 5 percent withholding tax on corporate bonds until June 30 2017 * To provide necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts * Extends 10-year tax holiday for power generation companies REVENUES and EXPENDITURE * Estimates that total expenditure will be 17.95 trillion rupees in 2014/15 * Revenue deficit seen at 2.9 percent of GDP in 2014/15 * Capital receipts seen at 739.5 billion rupees in 2014/15 * Retains tax collection targets and makes no major changes to direct tax rates * Allocates 2.29 trillion rupees for defence spending in 2014/15; capital outlay raised by 50 billion rupees over interim budget * Earmarks 70.6 billion rupees to create 100 smart cities * Proposes 50 billion rupees for warehousing capacity; 100 billion rupees of private capital for start-up companies; and 378 billion rupees of investment in national and state highways * 40 billion rupees for affordable housing proposed through national housing bank; 80 billion rupees proposed for rural housing scheme FOREIGN DIRECT 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 SUBSIDIES * Plans to make food and petroleum subsidies more targeted * Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become more focused on asset creation AGRICULTURE * Will focus on acheiving 4 percent growth per year in agriculture * Sets farm credit target at 8 trillion rupees for 2014/15 * Proposes a long-term rural credit fund with an initial corpus of 50 billion rupees
Posted on: Fri, 11 Jul 2014 06:49:39 +0000
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