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Budget Promises Lower Corporate Tax, Double Digit Growth

PUBLISHED BY: SURENDER KUMAR
FEBRUARY 28, 2015

   
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Budget Promises Lower Corporate Tax, Double Digit Growth

 Budget Promises Lower Corporate Tax, Double Digit Growth

Finance Minister Arun Jaitley presented the first full-year Budget of Prime Minister Narendra Modi's government. Here are some key highlights of the Union Budget 2015:

DEFICITS

* Fiscal deficit projected at 3.9 % of GDP in 2015-16

* Will meet the fiscal deficit target of 4.1 % of GDP for this year

* Committed to meeting medium term fiscal deficit target of 3 % of GDP

* Current account deficit below 1.3 per cent of GDP

 

GROWTH
* GDP growth seen at between 8 - 8.5 per cent year on year

* Double digit growth rate achievable soon

 

INFLATION
* Inflation to remain close to 5 % March, room for more monetary policy easing

* Inflation  to be kept below 6 %

 

REVENUES
* Revenue deficit seen at 2.8 per cent of GDP

* Non tax revenue seen at Rs 2.21 trillion

* Agricultural incomes under stress

* Government target of Rs 410 billion from stake sales in PSUs

* Total stake sale in 2015-16 at Rs 695 billion

 

MONEY MARKETS
* Forward Markets Commission to merge with SEBI

* A new bankruptcy code to be introduced

* Public debt management agency to be set up

* An autonomous bank board bureau to improve management of public sector banks

* A new comprehensive new law on black money

 

SOCIAL SECTOR
* Proposal for a universal social security system for all Indians

* National skills mission to enhance employability of rural youth

* Visa-on-arrival facility to 150 countries

 

* Rs 346.99 billion for rural employment guarantee scheme

 

FISCAL POLICY
* Gross market borrowing seen at Rs 6 trillion

* Net market borrowing seen at Rs 4.56 trillion

* Rollout of anti-tax avoidance rules GAAR postponed by two years

* GAAR to apply prospectively from April 1, 2017

* Retrospective tax provisions will be avoided

* Wealth tax to be abolished; To be replaced with additional 2 % surcharge on super rich

* Corporate tax to be cut to 25% over next four years

* Goods and Services Tax to be in place by April 2016

* Lower customs duty on 22 items

* Basic custom duty on commercial vehicle doubled to 20 %

* Service Tax to rise to14 per cent from 12.36 per cent

* Exemptions for individual tax payers to continue

* Tough penalties for tax evasion in new bill

 

INFRASTRUCTURE
* Infrastructure investment to go up by Rs 700 billion in 2015-16

* Plan for national investment infrastructure fund

* Tax-free infrastructure bonds for projects in roads, rail and irrigation projects

* 5 "ultra mega" power projects for 4,000MW each

 

EXPENDITURE
* Plan expenditure estimated at about Rs 4.65 trillion

* Non-plan expenditure seen at about Rs 13.12 trillion

* Rs 2.46 trillion for defence spending

* Rs 331.5 billion for health sector

* Sovereign gold bond proposed

* Gold monetisation scheme to allow depositors to earn interest

 

 

SUBSIDIES

* Food subsidy seen at Rs 1.24 trillion

* Fertiliser subsidy seen at Rs 729.69 billion

* Fuel subsidy seen at Rs 300 billion



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