Highlights of Budget 2016-17

Finance minister Arun Jaitley has today presented the Budget for the financial year 2016-17. The budget was thought to be practical and has aroused mixed reactions among the critics. It is for the readers to decide it’s credibility... here are the main features of this year’s budget.

- Agriculture and farmers' welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden were declared as nine pillars of this year’s budget for the purpose of priority.

- Minister has laid a target of 9 lakh crore to be granted as credit for the agricultural sector. He has even set aside 5,500 crores for the purpose of crop insurance scheme.

- Rs. 2.87 lakh crore for gram panchayats as per recommendation of 14th finance commission. And 38,500 crore Rs were set aside for rural employment scheme.

- Rs. 9,000 crores were allocated for the Prime minister’s ambition of achieving Swatcha Bharat.

- "For the better availability of generic medicines in the country, especially in the rural areas, the government has decided to open 3,000 new generic medicines stores... The government will also provide health insurance of up to Rs 1 lakh per family," said Jaitley, in his budget speech. He also announced the launch of a National Dialysis Programme to address the high costs involved in the renal dialysis which is supposed to be a financial curse on the poor.

- A total of 2.8 lakh crores would be spend to develop road and railways.

- 25,000 crore was set aside  recapitalisation of public sector banks and Asset Reconstruction Companies were said to be encouraged to deal with the non performing assets of the banks.

- Necessary Amendments would be made to the companies act to quicken the process of registration.

- A Tax holiday was also granted for new companies for three out of five years of setting up the company. Corporate tax was also  reduced from the present 30% to 25%, for those companies whose turnover is less than 5 crores.

- Not much relief is granted for the individual tax payers. The increase of HRA deduction from 24,000 to 60,000 seems to be the only major relief. Besides, 40% of PF withdrawal at the time of retirement under National Pension Scheme is to be tax exempt. Further a further exemption of Rs. 50,000 for first time housing loans is granted.

--- And as usual, the cost of Cigarettes and luxury goods are going to raise as the minister proposes an increase in the excise duty on tobacco products. He has also charged 1% service tax on luxury cars over 10 lakh rupees, and cash purchase of goods and services over Rs. 2 lakh.