The budget focuses its efforts on what needs fixing – the rural distress, the jobs problem, the banking crisis, and infrastructure deficit.
As you prepare for your IAS examination in 2016, keep these recurring themes in mind! Even government is waking up to take them seriously.
First, the budget sticks to the fiscal deficit roadmap and promises to bring down the deficit to 3.5 percent in 2016-17. Read more on this, click here.
Second, the corporate sector has been let down, with the promised reduction in corporate taxes restricted to small and new companies. To know all about taxes and ease of doing business, click here.
Third, the most exciting idea is the introduction of a tax amnesty scheme for domestic black money or undeclared incomes. Black money holders have to pay 45 percent tax – a penalty about 10 percent more than normal – to get immunity from questioning and penal action.
Read all about black money and the economics around it, click here.
Fourth, the big numbers are in infrastructure investment. Between railways and roads, both national highways and rural roads, the total investment in 2016-17 will be a massive Rs 2,18,000 crore – this should be a stimulant for jobs and investment. We have been following up developments in this sector for the year round. Click here.
Fifth, the organised sector is being incentivised to take on more employees with the centre offering to pay the 8.33 percent pension contributions of new employees for three years.
Sixth, the budget lowers the axe on rich promoters, who have benefited from the fact that dividend tax is paid by companies. They thus got a benefit not intended for the rich. Not any more. Promoters and big shareholders will now face 10 percent additional tax when dividend payments exceed Rs 10 lakh.
Seventh, the bottom end of the middle class gets some relief. Taxpayers in the sub-Rs 5 lakh income bracket will get a tax rebate of around Rs 3,000. Two crore taxpayers will benefit.
Eight, there is a strong financial sector angle in the budget. Jaitley has proposed a strong exit policy which will involve legislating the Indian Financial Code, the Bankruptcy Code and quicker disposal of debt recovery cases in debt tribunals.
Follow up the developments of 2015-16, click here.
Ninth, the big pitch was to the rural and farm sector. The FM promised Rs 2.87 lakh crore of fiscal transfers to villages, and all villages will be electrified by 2018. This government obviously believes in doing things in mission mode. After Jan Dhan, now it is time for full electrification and taking cooking gas to all rural households.
Source: SwarajyaMag | Image: India.com