Union Budget 2014-15 - Policy Initiatives

Budgetary measures to support growth, saving and investment

1) Budget has recognised that

inadequate infrastructure is a
constraining factor to achieving higher growth

2) Therefore, the Budget has proposed a slew of measures which is

to be taken up by the government, banks, financial institutions and
financial markets.

3) These measures, inter alia, include,

(i) encouraging banks to extend long-term lending to infrastructure

sector with flexible structuring to absorb potential adverse
contingencies;

(ii) extending the 10 year tax holiday to the power sector

undertakings which begin generation, distribution and transmission
power by March 31, 2017,

iii) providing necessary incentives for Real Estate Investment

Trusts (REITs) ,

(iv) developing one hundred Smart Cities,

(v) urbanising the rural areas under the Shyama Prasad Mukherji
Rurban Mission,

(vi) raising the corpus of Rural Infrastructure Development Fund

(RIDF) and
(vii) re-orienting Mahatma Gandhi National Rural Employment
Gurantee Act towards asset
agriculture and allied activities.

creation

with linkages to

4) Further, in order to attract new investment and to quicken the

implementation of projects, the Budget has proposed to provide
investment allowance to manufacturing companies that invest
more than Rs 25 crore in any year in new plant and machinery up
to March 31, 2017.

5)
In order to incentivise the household sector to save, the
Budget has announced
(i) raising personal income-tax exemption limit by Rs 50,000,
ii) raising investment limit under section 80C of the Income-tax Act
from Rs 1 lakh to Rs 1.5 lakh,
(iii) increasing deduction limit on account of interest on loan in respect of
self- occupied house property from Rs 1.5 lakh to Rs 2 lakh,
(iv) enhancing annual ceiling in the PPF Scheme to Rs 1.5 lakh from Rs
1 lakh per annum,
(v) reintroducing Kisan Vikas Patra (KVP) and
(vi) introducing a special small savings instrument for the requirements
of educating and marriage of the Girl Child.

Initiatives relating to Banking and Financial Sector

1) To meet the huge equity capital requirement of Rs 2,400 billion by

2018, the capital of PSU banks will be raised by increasing the
shareholding of the people in a phased manner, largely through
the retail sale of shares.

2) A system for continuous authorisation of universal banks in private

sector and

3) licensing of small banks and other differentiated banks has also

been announced in the budget.

4) Six new Debt Recovery Tribunals ( in

would be set up.

see budget speech)

5) Suggestions regarding consolidation of public sector banks would

be considered during the year.

6) The Financial Inclusion Mission aims at providing all households in

the country with banking services in a time bound manner.

7) The transactions of all financial assets with single demat account

has been announced.

8) Uniform KYC norms and inter-usability of the KYC records across

the entire financial sector would be introduced.