“Also, we are proposing a monetary limit for contribution of employer in recognised provident and superannuation fund of Rs 1.5 lakh per annum for taking tax benefit”, said Mr Jaitley.
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Union Minister for Finance Arun Jaitley and MoS for Finance Jayant Sinha during a post-Budget press conference, in New Delhi on Monday. The committee will study a suggestion that fiscal expansion or contraction should be aligned with credit contraction or expansion in the economy.
The fiscal deficit for 2014-15 touched 4.1 per cent of GDP. “‘ 150 crore has been provided for this objective”, Jaitley said.
It was clear that following the lessons of the Bihar polls, where the BJP faced the problem of being perceived as a rich man’s party, he was trying to send out a signal that he believed in progressive taxation – meaning more tax for the rich. “This will benefit about 1 crore 50 lakh households below the poverty line in 2016-17”. An allocation of Rs. 8,500 crore has been made to achieve 100 per cent electrification of all villages. Capital expenditure on defence has been put at Rs 86,340 crore against Rs 81,400 crore. It is not clear in the Budget how much resources have been earmarked for meeting liabilities on account of the 7th Pay Commission’s recommendations and One Rank One Pension scheme. Composite scheme will apply to turnover of Rs 2 crore now. Four in 10 Indians rely directly on farming for their livelihoods, the government estimates.
In a bid to boost entrepreneurship, a lower corporate tax rate has been proposed for small firms with a turnover of below ‘5 crore, to 29 plus surcharge and cess, and 100 percent deduction of profits for three out of five years for start-ups set up between April 2016 and March 2019.
Rising rural distress after back-to-back droughts and a recent heavy election defeat in a largely agricultural state have upset that calculus.
While it is understandable that this move is aimed at financing initiatives for agriculture and the welfare of farmers, this will lead to paid services becoming dearer. Thus the total investment in the road sector, including Pradhanmatri Gram Sadak Yojna (PMGSY) allocation, would be Rs 97,000 crore during 2016-17.
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Calling the Union Budget as revolutionary, Chief Minister Raghubar Das today said that it will be beneficial for the overall development of people from all walks of life. It, however, raised question marks over the 14.2 percent revenue growth target, which has been arrived at after calculating an 18.1 percent growth in income tax, 12.2 percent growth in Excise duty and a whopping 76.67 percent growth in non-tax revenue from communication services expecting a windfall from the forthcoming spectrum sales.
