Union budget 2016-17: Key Highlights
Mon, Feb 29, 2016
Source : Citrus Interactive


The Finance Minister highlighted that global growth has slowed from 3.4% in 2014 to 3.2% in 2015. In this context the Indian economy has held ground.

The Budget focused on reviving rural economy, domestic consumption and welfare of the common man.


Key Highlights

  • Current Account Deficit has declined to USD 14.4 bn this year, will be 1.4% of GDP at the end of fiscal

  • Three major schemes to help underprivileged: Pradhan Mantri Fasal Yojana, health insurance scheme, launching initiative to ensure LPG connection for BPL families

  • Allocation is Rs. 35,984 crore to Agriculture

  • 89 irrigation projects to be fast tracked

  • Rs 87,765 cr for the whole rural sector

  • 100% rural electrification target by 1st May 2018

  • Rs 2.87 trillion to be given grant-in-aid for gram panchayats and      municipalities; it is quantum jump of 228%

  • Rs 38,500 crore for MNREGA – highest ever amount

  • Rs 1,700 crore for 1,500 multi skill training institutes

  • Small and medium-shops should be given option to remain open all 7 days on voluntary basis

  • 10 Public and 10 private institutions to become world class

  • Decided to set up a higher education financing agency (non-profit)—initial corpus of Rs. 1,000 crore

  • Rs. 55,000 crore outlay for roads and highways. This will be topped up by Rs 15,000 crore to be raised through bonds.

  • Total allocation of Rs.2.18 trillion for roads and railways this fiscal; Total outlay for infrastructure in Budget Estimates is at Rs.2.21 trillion

  • 100% FDI in food processing

  •  Open up road transport sector in passenger segment.

  • FY17 fiscal deficit target retained at 3.5%

  • 15.3% increase in Plan Expenditure to Rs 5.5 lakh crore

  • Non Plan Expenditure at Rs 14.28 lakh crore

  • Ceiling of tax rebate at Rs 5,000 for income less than Rs 5 lakh

  • Relief to people living in rented houses—Deduction for rent paid will be raised from Rs. 20,000 to Rs.60,000 to benefit those living in rented houses

  • Banks—Rs. 25,000 crore to be provided for recapitalization of public sector banks, which are grappling with stressed assets

  • New manufacturing companies incorporated on or after 1 March 2016 will be taxed at 25%

  • Presumptive taxation schemes—to increase turnover limit to Rs.2 crore—relief for many in MSME category

  • Propose to extend the presumptive income taxation scheme to all professionals with gross receipts of Rs. 50 lakh

  • Corporate tax rate for establishments with turnover less than Rs.5 crore lowered to 29%

  • Affordable housing - 100% deduction on profits for flats up to 30 sq.m in metro cities from 2016-19; MAT will apply

  • Tax exempt 40% of withdrawal from NPS at retirement

  • 100% deduction to undertakings for construction of affordable housing

  • Tax of 10% for Dividend above Rs. 10 lakh

  • 0.5% Krishi Kalyan surcharge cess on all taxable services from 1 June 2016, to be given to agriculture development

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