Finance minister Mr.

Arun Jaitley presented the Union Budget for the financial year
2014-15 under Modi-led NDA government. There was a very high hope on the budget and the minister
had tried to keep the promise, mainly those promises which the BJP party gave in their election
manifesto. Special focus was on women and childrens facilities, the construction of world class cities,
and welfare of senior citizens. There were many pros as well as cons in the budget presented. Let us have
a look on the highlights of the maiden budget of the new government.

Fiscal Deficit:

Accepts fiscal deficit target of 4.1% of GDP for 2014-15

Fiscal deficit seen at 3.6% of GDP in 2015-16

Finance minister said: We cant spend beyond our means

Tax-to-GDP ratio must be raised

Growth:

Aims for sustained growth of 7-8% in the next 3-4 years

Bound to usher in policies for higher growth and lower inflation


Taxation:

Aims to approve goods and services tax by end of this year

No change in rules on retrospective taxation

A high-level committee to examine all the pending cases of retrospective tax of indirect transfers
before action is taken.

Proposed changes in transfer pricing mechanism

Extension of 5% withhold tax on corporate bonds until 30
th
June, 2017

Income tax exemption limit has been raised to Rs. 2.5 Lakh and for senior citizens to Rs. 3Lakh

Expected revenue from taxes: Rs. 9.77 Lakh crore

Proposed tax on indirect tax front will yield Rs. 7,525 Crore

Net effect on direct tax proposals is revenue loss of Rs.22,200 Crore

Excise duty on footwear reduced to 6% from 12%

Long term capital gain tax for mutual funds doubled to 20%; lock-in-period increased to 3 years.
Investment
Raises limit on foreign direct investment in defence sector from 26 per cent to 49 per cent; raises
FDI limit in insurance sector to 49 percent
Earmarks Rs 7000 Crore to create 100 "smart cities"

Will provide the necessary tax changes to introduce real estate investment trusts and
infrastructure investment trusts

Proposes Rs 4000 crore for affordable housing through national housing bank and extends tax
incentives for housing loans

Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs
1 lakh.

Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh


Foreign direct investment
Raises limit on foreign direct investment in defence sector from 26 percent to 49 percent
Raises FDI limit in insurance sector from 26 percent to 49 percent
Spending
Capital outlay for defence raised by 50 billion rupees over interim budget
Earmarks Rs 7000 crore to create 100 "smart cities"

Proposes Rs 5000 crore for warehousing capacity; 100 billion rupees of private capital for start
up companies; and 378 billion rupees of investment in national and state highways

Rs 4000 crore for affordable housing proposed through national housing bank and extends tax
incentives for housing loans

Proposes Rs 8000 crore for rural housing scheme
Subsidies
Plans to make food and petroleum subsidies more targeted

Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become
more focused on asset creation

Proposes Rs 8000 crore for rural housing scheme
Agriculture
Will focus on achieving 4 growth per year in agriculture
Proposes a long-term rural credit fund with an initial corpus of Rs 5000 crore
Rs 100 crore for development of organic farming
Social sector
Pension Scheme to be revived for a year (Aug 15-14) for citizens above 60
Rs 50,548 crore for SC welfare schemes.
Rs 32,387 crore for ST welfare schemes.


Infrastructure
Earmarks Rs 500 crore for 24x7 uninterrupted power in all homes
Rs 100 crore for metro projects in Lucknow and Ahmedabad
Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called 'Namami Gange'
Rs 200 crore for world-class sports stadium in Jammu and Kasmir
Trade Facilitation Centre in Varanasi Handloom and Crafts Museum
Rs 1000 crore to enhance rail connectivity in the Northeast
Rs 2250 crore for the development and modernization of the border infrastructure

A project on the river Ganga called 'Jal Marg Vikas' for inland waterways between Allahabad and
Haldia; Rs 4,200 crore set aside for the purpose

War memorial to be set up along with a war museum; Rs 100 crore set aside for this
Rs 7,060 crore for setting up 100 Smart Cities
Education
Five more IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
Five more IITs in Jammu, Chattisgarh, Goa, Andhra Pradesh and Kerala.
Four more AIIMS like institutions to come up in Andhra Pradesh, West Bengal, Vidarbha in
Maharashtra and Poorvanchal in Uttar Pradesh
Tourism
E-Visas to be introduced at 9 airports

Finance Minister says tourism helps in job creation and e-visas will encourage more tourists to
visit India

A provision of Rs 500 crore for five tourism sector.
Banking
Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5 lakh.


Set aside Rs 11,200 crore for PSU banks capitalisation
Government in favour of consolidation of PSU banks
Government considering giving greater autonomy to PSU banks while making them accountable
PSUs to invest to over Rs 2.47 lakh crore this fiscal
Others
Earmarks Rs 200 crore for Sardar Patel statue
Proposes Rs 150 crore for improving women safety
LCD, LED TV become cheaper
Cigarettes, pan masala, tobacco, aerated drinks become costlier

Government proposes to launch Digital India' programme to ensure broad band connectivity at
village level

Rs 100 crore scheme to support about 600 new and existing Community Radio Stations
Rs 150 crore for Communication facilities in Andaman and Nicobar Islands
Rs 188 crore for disaster preparedness in Puducherry
Rs 3,600 crore for providing safe drinking water
North-stop 24-hour channel is proposed to be introduced
Farmer TV channel will be launched for the benefit of farmers.
Rs 200 crore to make Delhi a world class city for social welfare and Rs 500 crore for energy

Kisan Vikas Patra to be reintroduced, National Savings Certificate with insurance cover to be
launched

'Pandit Madan Mohan Malviya New Teachers Training Programme' launched with initial sum of
Rs 500 crore

Government provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants
Indian Custom Single Window Project to be taken up for facilitating trade