Key Features of Budget 2014-2015

Key Features of Budget 2014-2015

I.            THE CURRENT ECONOMIC SITUATION AND THE CHALLENGES

• Decisive vote for change represents the desire of the people to grow, free themselves from the curse of poverty and use the opportunity provided by the society. Country in no mood to suffer unemployment, inadequate basic amenities, lack of infrastructure and apathetic governance   Challenging situation due to Sub five per cent growth and double digit inflation. 
•  Continued slow-down in many emerging economies a threat to sustained global recovery.
• Recovery seen with the growth rate of world economy projected at 3.6 per cent in 2014 vis-à-vis in 2013. 
  
•    Steps announced are only the beginning of the journey towards a sustained growth of 7-8 per cent or above within the next 3-4 years along with macro-economic stabilization. 
• Need to revive growth in manufacturing and infrastructure sectors. 
•   Tax to GDP ratio must be improved and Non-tax revenues increased.

II.            Deficit and Inflation

•   Decline in fiscal deficit from 5.7% in 2011-12 to 4.5% in 2013-14 mainly achieved by reduction in expenditure rather than by way of realization of higher revenue. 
• Improvement in current account deficit from 4.7 % in 2012-13 to year end level of 1.7% mainly achieved through restriction on non-essential import and slow-down in overall aggregate demand. Need to keep watch on CAD. 
•  4.1 per cent fiscal deficit a daunting task in the backdrop of two years of low GDP growth, static industrial growth, moderate increase in indirect taxes, subsidy burden and not so encouraging tax buoyancy. 
•  The government is committed to achieve this target. Road map for fiscal consolidation outlines fiscal deficit of 3.6 % for 2015-16 and 3 % for 2016-17. 
•  Inflation has remain at elevated level with gradual moderation in WPI recently and the problem of black money must be fully addressed. So bold steps required to enhance economic activities and spur growth in the economy.

III.            Administrative Initiatives

• Sovereign right of the Government to undertake retrospective legislation to be exercised with extreme caution and judiciousness keeping in mind the impact of each such measure on the economy and the overall investment climate. 
•  The subsidy regime to be made more targeted for full protection to the marginalized,poor and SC/ST. 
•   National Academy for Customs & Excise at Hindupur in Andhra Pradesh. 
•  Introduction of GST to be given thrust. 
•  Convergence with International Financial Reporting Standard (IFRS) by Adoption of the new Indian Accounting Standards (2nd AS) by Indian Companies. 
•  Setting up of Expenditure Management Commission to look into expenditure reforms.
•  Employment exchanges to be transformed into career centres. A sum of `100 crore provided.

IV.            ECONOMIC INITIATIVES

• Foreign Direct Investment (FDI): Government to promote FDI selectively in sectors. The composite cap of foreign investment to be raised to 49 per cent with full Indian management and control through the FIPB route. The composite cap in the insurance sector to be increased up to 49 per cent from 26per cent with full Indian management and control through the FIPB route. Requirement of the built up area and capital conditions for FDI to be reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively for development of smart cities. 
•  The manufacturing units to be allowed to sell its products through retail including Ecommerce platforms. 
•  Smart Cities: A sum of `7060 crore is provided in the current fiscal for the project of developing “one hundred Smart Cities’ 
•  Irrigation: `1000 crore provided for “Pradhan Mantri Krishi Sinchayee Yojna” for assured irrigation.
•  Rural Development: Shyama Prasad Mukherji Rurban Mission for integrated project based infrastructure in the rural areas. And `500 crore for “Deen Dayal Upadhyaya Gram Jyoti Yojana” for feeder separation to augment power supply to the rural areas. More productive, asset creating and with linkages to agriculture and allied activities wage employment would to be provided under MGNREGA. 
•  Under Ajeevika, the provision of bank loan for women SHGs at 4% to be extended to another 100 districts. 
•  Initial sum of `100 crore for “Start Up Village Entrepreneurship Programme” for encouraging rural youth to take up local entrepreneurship programs. 
•  Allocation for National Housing Bank increased to `8000 crore to support Rural housing. 
•  New programme “Neeranchal” to give impetus to watershed development in the country with an initial outlay of `2142 crores. 
•  Senior Citizen & Differently Abled Persons: Varishtha Pension Bima Yojana (VPBY) to be revived for a limited period from 15 August, 2014 to 14 August, 2015 for the benefit of citizens aged 60 years and above. A committee will to examine and recommend how unclaimed amounts with PPF, Post Office, saving schemes etc. can be used to protect and further financial interests of the senior citizens? Government notified a minimum pension of `1000 per month to all subscriber members of EP Scheme. Initial provision of `250 crore. EPFO to launch the “Uniform Account Number” Service for contributing members. 
•  School curriculum to have a separate chapter on gender mainstreaming.
• Drinking Water & Sanitation : 20,000 habitations affected with arsenic, fluoride, heavy/ toxic elements, pesticides/ fertilizers to be provided safe drinking water through community water purification  plants in next 3 years. “Swachh Bharat Abhiyan” to cover every household with sanitation facility by the year 2019. 
•  Health and Family Welfare: Free Drug Service and Free Diagnosis Service to achieve “ Health For All” Two National Institutes of Ageing to be set up at AIIMS, New Delhi and Madras Medical College, Chennai. AIIMS like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP. A provision of `500 crores made.12 new government medical colleges to be set up.

VI.            EDUCATION

• School Education: Government would strive to provide toilets and drinking water in all the girls school in first phase. An amount of `28635 crore is being funded for Sarv Shiksha Abhiyan(SSA) and `4966 crore for Rashtriya madhyamic Shiksha Abhiyan (RMSA).  A School Assessment Programme is being initiated at a cost of `30 crore. 
•  Higher Education:  Jai Prakash Narayan National Centre for Excellence in Humanities to be set up in MP. `500 crore provided for setting up 5 more IITs in the Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala. 5 IIMs in the States of HP, Punjab, Bihar, Odisha and Rajasthan. 
•  Information Technology: Pan India programme “Digital India” to with an outlay of `500 crore to be launched. Programme for promoting “Good Governance” to be launched .A sum of `100 crore provided. 
•  Minorities: An additional amount of `100 crores for Modernization of Madarsas .

VII.            AGRICULTURE:

• Government to establish two more Agricultural Research Institute of excellence in Assam and Jharkhand with an initial sum of `100 crore. `200 crore provided to open Agriculture Universities in Andhra Pradesh and Rajasthan and Horticulture Universities in Telangana and Haryana. A sustainable growth of 4% in Agriculture will be achieved. Technology driven second green revolution with focus on higher productivity and including “Protein revolution” will be area of major focus.

VIII.            INDUSTRY

• Central Government Departments and Ministries to integrate their services with the eBiz -a single window IT platform- for services on priority by 31 December this year. 
• 100 crore provided for setting up a National Industrial Corridor Authority.

IX.            INFRASTRUCTURE

• An institution to provide support to mainstreaming PPPPs called 4PIndia to be set up with a corpus of `500 crores. 
•  Target of NH construction of 8500 km will be achieved in current financial year. 
• New & Renewable Energy: `500 crores provided for Ultra Mega Solar Power Projects in Rajasthan, Gujarat, Tamil Nadu, Andhra Pradesh and Laddakh

X.            FINANCIAL SECTOR

• Ongoing process of consultations with all the stakeholders on the enactment of the Indian Financial Code and reports of the Financial Sector Legislative Reforms Commission (FSLRC) to be completed. Introduction of uniform KYC norms and inter-usability of the KYC records across the entire financial sector.

XI.            DEFENCE & INTERNAL SECURIT

• A further sum of `1000 crore to meet requirement for “One Rank One Pension”. 
• Capital outlay for Defence increased by `5000 crore including a sum of `1000 crore for accelerating the development of the Railway system in the border areas.

XII.            CULTURE & TOURISM

• 200 crore provided to build the Statue of unity (National project) 
• Facility of Electronic Travel Authorization (e-Visa) to be introduced in phased manner at nine airports in India. 
•  2037 crores provided for Integrated Ganga Conservation Mission “NAMAMI GANGE”. And NRI Fund for Ganga will be set up.

XIII.            BUDGET ESTIMATES

• Non-plan Expenditure of `12,19,892 crore with additional provision for fertilizer subsidy and Capital expenditure for Armed forces. 
•  5,75,000 crore Plan expenditure – increase of 26.9 per cent over actuals of 2013-14.
• Total expenditure of `.17,94,892 crore estimated. 
• Gross Tax receipts of `13,64,524 crore estimated. 
•  Net to centre of `9,77,258 crore estimated. 
•  Fiscal deficit of 4.1% of GDP and Revenue deficit of 2.9% estimated.

XIV.            TAX PROPOSAL

• Personal Income-tax exemption limit raised by `50,000/- that is, from `2 lakh to ` 2.5 lakh in the case of individual taxpayers, below the age of 60 years. Exemption limit raised from `2.5 lakh to `3 lakh in the case of senior citizens.