Finance Minister of India Arun Jaitley presented the budget for 2015-16 in the Parliament. Though the budget lacked “big bang measures”, it sought to create an enabling platform, for future economic growth.
In an attempt to blunt the growing criticism about the Modi government being pro-rich, the finance minister announced a series of pro-poor measures. In general it can be said that the budget is an attempt of combining a pro-growth budget with welfarist measures.
Jaitley tried to fight off the impression that the NDA government is indifferent to the poor by announcing a number of measures for them, for example:
Jaitley also countered criticism of the government’s handling of the black money issue by announcing the harshest penalty yet for those with unaccounted wealth.
The budget tries to clean up the processes for investments to flow in, mainly for roads, railways, ports and power.
Five new ultra mega power projects of 4,000mw are to be set up. Like the existing UMPPs, these will be in the ‘plug and-play’ mode, meaning all clearances would be in place before they are put up for bidding by the private sector.
The FM also promised many things such as:
The deadline for these goals has been set to 2022.
2022 is the 75th year of India’s independence and three years after the term of the current government ends.
The FM also said the Jan Dhan programme would be moved further to a Jan Suraksha programme to create a “universal security system for all Indians”.
Though the budget does not take away anything from the middle class, there were no changes in the basic exemption limit or in tax slabs, the changes that were anticipated by the middle class.
However, the budget has allowed for more tax savings on health insurance, transport allowance and investments in infrastructure bonds and pension funds.
But an increase in service tax from 12% to 14% will make everything from haircuts and telephone bills to eating out and watching a cricket match a little bit more expensive.
For the super rich, there is an additional surcharge on incomes above Rs 1 crore a year -from 10% to 12%. This means that they will have to pay about Rs 70,000 more in taxes for every crore they earn.
However Jaitley abolished the wealth tax, as it yielded very little revenue.
Businessmen would benefit by the promise of corporate tax being cut from 30% to 25% over the next four years.
There is clearly a conscious effort to promise something for every section. For senior citizens there’s a slew of benefits including tax breaks and a welfare fund by utilising unclaimed money lying in the EPF and the PPF.
For the minorities there is the ‘Nai Manzil’ scheme which promises to provide those without formal education both education and better job opportunities.
For the farmers, the budget promises that credit to them will reach Rs 8.56 lakh crore this year.
For small businesses, owned largely by SCs, STs and OBCs, a ‘MUDRA Bank’ will ensure that the “unfunded are funded”.
Business will welcome following moves:
Disinvestment was another major plank of the budget, as the FM targetted Rs 69,500 crore from this source, including by way of strategic divestments, last done in the Vajpayee government.