Union Budget 2016-17
Dear Friends,
 
The Finance Minister Shri Arun Jaitley be saluted for containing fiscal deficit at 3.5% of Gross Domestic Product as budgeted inspite of Global meltdown and consecutive two years of insuffucent rains in most part of India.
 
The Union Budget 2016 - 17 is also commendable as the same addresses present day concerns of India of running second year of draught ; stressed farmers ; unemployment n problems of rural India and crippling infrastructure.
 
A very strong fillip is given to Infrastructure with Union and Railway Budget together allocating Rs. 218,000/- crores for Rail and Roads.
 
Power Sector promises total electrification of entire India in two years ; Ports and Airports capital expenses also promising.
 
Although individuals are not directly benefited by higher exemption limit , House rent deduction raised from 24,000 to 60,000 and additional exemption of Home Loan interest up to 50,000 for loans up to Rs. 50 lakhs are both positive for middle class home buyers.
 
Radical change of 25% tax for new Manufacturing Companies and marginal reduction to 29% for small companies is first step forward for Corporate Tax to be reduced to 25% in next few years.
 
Infrastructure spending will percolate to private sector and consumers as the demand for cement ; steel ; cables ; locomotive manufacturing ; road construction,  transformers etc. will be enhancing private sector manufacturing demand which will eventually give rise to jobs and incomes of indiividuals.
 
The well being of poor is widely taken care in education ; health care ; rural roads ; drinking water and sanitation.
 
Foreign Direct Investment (FDI) enhanced to 49% in insurance , pension and stock exchanges and 100% FDI in marketing of Food Processing Industry.
 
Economy to strengthen by Bankruptcy and Insolvency Bills.
 
Aadhar Financial Bill will ensure direct transfer plugging leakages and corruption.
 
Voluntary Disclosure Scheme of undisclosed income to be taxed at 45% is a welcome step together with dispute resolution and electronic scrutiny eliminating personal hearing of Income Tax cases being initially implemented in eight metros.
 
First time Government promises reduction of is stake in Banks below 51%.
 
For NRIs without PAN Card alternate options being introduced for Tax Deduction facility.
 
All these steps together with possible rate reduction in next couple of weeks by Reserve Bank of India are strengthening foundations for a long term economic growth and well being of poor and rural with promise of economic development for manufacturing and service sector too.
 
Other highlights are :
* India's Forex Reserves touch US$ 350 bn
* India GDP shoots upto 7.6%
* Subsidies down from 2.1% to 1.6% of GDP
* FY16 CAD projected at 1.4% of GDP
* INR 25,000 crs. for Bank recap
* Focus on governance , employment , tax reforms , tax disputes redressal and ease of doing business
* Arbitration for dispute resolution for Private Public Partnership Projects in touble including transparent renegotiation
* School and Colege Certification record digitalisation
* FY17 fiscal deficit target at 3.5% of GDP
* FY16 Fiscal deficit pegged at 3.9% of GDP & Revenue deficit 2.5% of GDP
* Total Expenditure Rs.19.78 tn ; Non-Plan expenditure Rs.14.3 tl ; Plan Expenditure Rs.5.5 tn e
* Plan, Non-Plan Expenditure distinction to be removed
* No more retro tax as promised
* Tax simplification and rationalisation as also rationalisation of Tax Disputes
* Presumptive Tax of 8% fpr Business with Turnover upto Rs 2 crs and Tax of 50% Professionals having Turnover upto Rs. 50 lakhs.
* Tax rebate on rent paid from Rs. 24,000 hiked to Rs. 60,000
* Tax sur-charge hiked to 15% on income over Rs. 1 crs.
* Dividend earners above Rs. 10 lakhs to pay 10% tax
* Penalty of 200% of tax for wrong declaration of income and penalty at 50% of tax for under-reporting 
* GAAR from Apr 2017
* STT of 0.05% on options contracts
* Service tax waiver for houses of less than 60 sq mtr
* To allocate 4.12 bln rupees for organic farming
* Health scheme covering 1/3rd of population
* Health insurance, BPL cooking gas scheme planned for Rural India - 5 cr BPL families to get LPG connection
* 1,500 multi-skill training institutes & 100 model career centres
* To start National Dialysis Service 
* Health protection scheme with cover of Rs. 100,000 per person and Rs. 130,000 for senior citizens
* 3000 drug stores to be opened under Prime Minister Aushadhi Yojana
* 10,000 km of national highways to be added with road sector spending at Rs. 97,000 crs
* 85% of  stranded road projects back on track with highest ever kilometres of highways awarded last year
* Market freedom for gas from difficult blocks and enhance resources for power generation
* 10 non-functional air strips to be redeveloped and to partner with state govts to develop airports
* New public transport policy to up pvt participation
* Greenfield ports to be developed on east, west coasts
* 50,000 km state highways to be converted to national highways
* NITI Aayog to put on block PSUs for strategic sale
* 300,000 fair price shops to be automated by Mar 2017
 
Best wishes.

RAJESH H DHRUVA
Chief Executive
femaonline.com 
ph ; (91 281 ) 2453367 ( four lines)
rajesh@femaonline.comcouncelor@nribanks.com



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