Highlights & key points of the Budget 2014 by Shri. Arun Jaitley

Aim to revive manufacturing sector

Need to introduce fiscal prudence

FY16 Fiscal Deficit target of 3.6%, FY17: 3%

Tax

End discussion on GST and implement them

No retrospective tax changes. Retrospective Tax Act not repealed. To be used sparingly. 

Tax dispute of 4 Lakh Crore pending in courts. 

Clarity in tax laws: Set up committee to interact with industry

FDI

Selectively promote FDI.

Composite cap of FDI raised to 49%

Defence equipment purchases leads to considerable foreign exchange loss . FDI in defence up from 25% to 49%.

Insurance to 25% to 49%.

FDI in e-commerce without additional approvals

Smart Cities

Develop 100 Smart Cities

7060 crores allocated

Tourism

Introduce e-visa at airports

Electronic travel and visa on arrival enabler

REITs

Modified REITs to make available fresh equity to real estate

Tax pass-thru status for REITs

Skill India

Training and support for various skills such as carpenters, construction workers, etc.

Sanitation

Government intends to cover every household with sanitation by 2019

Allocations

Aim to augment power supply to rural areas. 500 Crores allocated

Rs. 200 Crore for Sardar Patel statue in Gujarat

Rs. 200 Crores for scheduled caste entrepreneurs

Crisis management center in all government hospitals in NCR area

Rs. 100 crore for 'Beti bachao, beti padhao' yojana

School curriculum to have separate chapter of gender mainstreaming

Rs. 100 Crore for Startup Village entrepreneurship for rural population

Rs. 14,000 crore for rural road development

Rs. 3,600 crore to provide safe drinking water in next 3 years 

Maintain allocation for NREGAs

Medical

Free drug & diagnostic service for all for TB patients at AIIMS & Madras Medical College

All 6 new AIIMS functional. Consideration to set up 4 more. Rs. 500 crore allocated. Aim to create AIIMS in every state.

Create new drug testing labs. 

Education

Create toilets at girls' schools

Rs. 100 crore for setting up virtual classroom for online courses

Set up 5 more IITs

Set up 5 more IIMs

Facilitate loans for higher education

Digital India

Digital India programme to provide broadband connectivity in rural areas to increase government transparency

Rs. 500 crores to set up software services in rural areas

Urban renewal

Provision for safe drinking water. Rs. 50,000 crore allocated.

Sewerage management

Solid waster management

Through PPP

Develop metro rails system through PPP. Rs. 100 crore allocated for 2 cities

Housing for all by 2022. Low cost housing loans. Rs. 4,000 crore allocated to National Housing Bank

Slum development to be a part of CSR

Farming

Establish Agro development institutes in Assam & Jharkhand.

Rs. 100 crore for agri-infra fund

Establish Agricultural & horticultural universities

There's a 5 minute break! House stands adjourned currently. 

We are back live now.

State govts to encouraged to set up farmer markets.

Rs. 8 lakh crores for farming credit

Farmer incentives to repay loan to remain. This seems like a socialist budget. :(

Set up a long term rural credit fund with NABARD

Aim to reduce storage, transportation and logistics losses.

Open market sales to keep prices transparent. 

Kisaan TV to be launched. Ra. 100 Crore allocated.

Industry

e-biz platform to integrate all central govt. departments by Dec 2014. Central payment gateway for the same.

Revive SEZs. Revive investors' interests. utilize unutilized land

SEZs in Kandla and JNPT

Startups & SMEs

Apprenticeship act to be amended. MSMEs to benefit.

Financing SMEs. Appoint committee to give advice.

Startup companies: Startup capital issue. Establish Rs.10,000 crore fund for same! #woohoo

National accelerators & incubators for startups to be setup! 

Navigation

Develop inland waterways. Allahabad-Haldia route to development for freight.

New airports to the development

Rs. 37,800 crore allocated for NHAI

Power

Rs. 100 crore for new thermal power methods.

Coal linkages to reduce cost of coal

Ultra-modern solar power projects in Rajasthan, Leh. Rs. 500 allocated.

Rs. 100 crore for solar projects along banks of rivers and canals.

Develop 50,000 kms of gas pipelines thru PPP

Promote sustainable mining. 

Greater royalty to state governments for mining.

Monetary Policy

Allow ADRs

Revamp IDRs. Introduce BDRs. Details later.

Introduce uniform KYC.

Single DMAT account.

KYC to be share across all companies.

New Indian Financial Accounting standards. to be mandatory by 2017.

Banking

Financial inclusion: 2 bank accounts in each household. 

Long term loans to infra sector.

6 new debt recovery platforms.

PPF Annual scheme increased to 1.5L per annum

Defence

2.29 lakh crore allocated to defence

Increase Rs. 5,000 crore for modernisation of defence.

Warm memorial & museum to be constructed at princess park. Rs. 100 crore allocated.

Modernize state police force. Funds for left wing extremist areas.

Rs. 990 crores for socio economic development at border areas.

National Police memorial. Rs. 50 Crore allocated

Tourism (again)

Theme based tourist parks.

Preservation of Archaeological sites. Rs. 100 crore allocated.

Goa: develop world class convention facilities thru PPP

Cleaning of Ganga: Rs. 100 crore for study of linking rivers in India.

Rs. 2,030 crores for preservation of Ganga (lots of screaming in the parliament! ouch!!)

Rs. 100 crores for beautification of river fronts at specific places.

NRI fund for Ganga

Science & Technology

Nanotech, biomedical, material science: strengthen institutes thru PPP

Launch more satellites: GSLV. Mars Orbiter expected to reach march on sept 24.

Sports

launch National Sports Academics #super

Shooting, archery, weightlifting, track & field events.

Rs. 200 crore for upgrading stadiums in J&K

Sports academy in Manipur

Annual event to promote games

Rs. 100 crore: training for Asian & Commonwealth Games.

Young leaders programme: Rs. 100 crore allocation

Kashmir

Rs. 500 crore for displaced Kashmiri inhabitants.

North East India

Develop organic farming in NE. Rs. 100 crore allocated.

NE: Develop rail systems: additional Rs. 1,000 crore allocated.

New NE TV

Delhi

Rs. 200 crore for water reform & Rs. 500 crore for power reforms in Delhi.

Budget Estimates

Non planned expenditure estimate: 12.2 lakh crore.

Plan allocation: Rs. 5.7 lakh crore.

Total: Rs. 17.9 lakh crore

Fiscal Deficit expected: 4.5% 

Tax Proposal

Direct Taxes

No changes in tax rate

IT exemption up to Rs. 2.5 Lakh, Rs. 3.0 Lakh in case of senior citizens

Investment limit under section 80C increased to 1.5 lakh

Manufacturing: has a multiplier effect in jobs. Investment allowance @ 15% for >25cr investment in plant and machinery for next 3 years.

Power to get 10 year tax holiday by 2017

No changes in surcharge rates

Income from portfolio gains to be treated as capital gains

Transfer Pricing

Introduce roll back for APA

Arm length price to be introduced. Arithmetic mean to continue

Allow use of multiple year data.

Hike tax rate to 20% for MF units.

 

Indirect taxes

Reduce customs on fatty acids, crude plam from 7.5% to 0% for manufacture of soaps.

Reduce customs of ethane, propene, methyl alcohol to 2.5%

Educational cess on imported electronic products.

No custom duty for import of components for LCD manufacturers

Solar: exempt basic custom duty specific inputs.

Wind Energy: reduce custom duty on rings.

All coal to have same custom duty

Ship breaking: custom duty of 2.5%

Semi-processed gem stones: customs duty @ 2.5%

Excise Duty

Reduce food machinery excise to 6%

excise on footwear: 6% for footwear between Rs. 500-1000

Sports gloves to get cheaper

Smoking is going to get more expensive. excise up from 10% to 72%

Pan masala: up from 10 to 16%

gutka also up from 60% to 70%

Excise on sugar drinks as well

 

Service Tax

Transition from ST to GST

Negative list pruned

Service Tax on Radio cabs

Faster clearance of import and export at airports

That's it! That's the budget 2014! More socialist than capitalist. But not bad. Rs. 10,000 crore start up fund was the biggest take away!