UPSC Interview Prep Feed Vol.7

Topics Discussed: Budget 2015

The most important part i guess. But then it also requires a lot of effort. And ultimately you remember just a few pointers at Dholpur House. So why not just focus on the important pointers.

Introduction.

• Most growth forecasts have upgraded Indian economic growth while downgrading global economic growth.
• Three Key achievements: Financial Inclusion - 12.5 crores families financially mainstreamed in 100 days; Transparent Coal Block auctions to augment resources of the States.;Swachh Bharat is not only a programme to improve hygiene and cleanliness but has become a movement to regenerate India.

State of Economy

• CPI inflation projected at 5% by the end of the year, consequently, easing of monetary policy.
• GDP growth in 2015-16, projected to be between 8 to 8.5%.

 Amrut Mahotsav - The year 2022, 75th year of Independence. Vision...

• Housing for all - 2 crore and 4 crore houses in urban and rural areas respectively.
• Basic facility of 24x7 power, clean drinking water, a toilet and road connectivity.
• Electrification of the remaining 20,000 villages including off-grid Solar Power.

Fiscal Roadmap

•  Government firm on journey to achieve fiscal target of 3% of GDP.
• Accordingly, journey for fiscal deficit target of 3% will be achieved in 3 years rather than 2 years. The fiscal deficit targets are 3.9%, 3.5% and 3.0% in FY 2015-16, 2016-17 & 2017-18 respectively.

Agriculture

• INR 5,300 crore to support micro-irrigation, watershed development and the ‘Pradhan Mantri Krishi Sinchai Yojana’. States urged to chip in.
• INR 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; INR 15,000 crore for Long Term Rural Credit Fund; INR 45,000 crore for Short Term Co-operative Rural Credit Refinance Fund; and INR 15,000 crore for Short Term RRB Refinance Fund.
• Need to create a National Agriculture Market for the benefit farmers, which will also have the incidental benefit of moderating price rises. Government to work with the States, in NITI, for the creation of a Unified National Agriculture Market.

Micro Finance

• Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of INR 20,000 crores, and credit guarantee corpus of INR 3,000 crores to be created.
• In lending, priority will be given to SC/ST enterprises
• MUDRA Bank will be responsible for refinancing all Micro-finance Institutions which are in the business of lending to such small entities of business through a Pradhan Mantri Mudra Yojana.

Social Security

• Pradhan Mantri Suraksha Bima Yojna to cover accidental death risk of INR 2 Lakh for a premium of just INR 12 per year.
• Atal Pension Yojana to provide a defined pension, depending on the contribution and the period of contribution. Government to contribute 50% of the beneficiaries’ premium limited to INR 1,000 each year, for five years, in the new accounts opened before 31st December 2015.
• Pradhan Mantri Jeevan Jyoti Bima Yojana to cover both natural and accidental death risk of INR 2 lakh at premium of INR 330 per year for the age group of 18-50.

Infrastructure

• National Investment and Infrastructure Fund (NIIF), to be established with an annual flow of INR 20,000 crores to it.
• Atal Innovation Mission (AIM) to be established in NITI to provide Innovation Promotion Platform involving academicians, and drawing upon national and international experiences to foster a culture of innovation , research and development. A sum of INR 150 crore will be earmarked.
• Ports in public sector will be encouraged, to corporatize, and become companies under the Companies Act to attract investment and leverage the huge land resources.
• 5 new Ultra Mega Power Projects, each of 4000 MW, in the Plug-and-Play mode

Financial Market

• Public Debt Management Agency (PDMA) bringing both external and domestic borrowings under one roof to be set up this year.
• Forward Markets commission to be merged with SEBI.
• Government to bring enabling legislation to allow employee to opt for EPF or New Pension Scheme. For employee’s below a certain threshold of monthly income, contribution to EPF to be option, without affecting employees’ contribution.

Green India

• Target of renewable energy capacity revised to 175000 MW till 2022, comprising 100000 MW Solar, 60000 MW Wind, 10000 MW Biomass and 5000 MW Small Hydro.

Budget Estimates

• Gross Tax receipts are estimated to be 14,49,490 crore. 
• Devolution to the States is estimated to be 5,23,958.
• Fiscal deficit will be 3.9 per cent of GDP and Revenue Deficit will be 2.8 per cent of GDP.

Tax Proposals

• No change in rate of personal income tax. 
• Proposal to reduce corporate tax from 30% to 25% over the next four years, starting from next financial year. 
• Rationalisation and removal of various tax exemptions and incentives to reduce tax disputes and improve administration.

Key features of new law on black money

♦ Evasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment upto 10 years, be non-compoundable, have a penalty rate of 300% and the offender will not be permitted to approach the Settlement Commission. 

♦ Non-filing of return/filing of return with inadequate disclosures to have a punishment of rigorous imprisonment upto 7 years. 

♦ Undisclosed income from any foreign assets to be taxable at the maximum marginal rate. 

♦ Mandatory filing of return in respect of foreign asset. 

♦ Entities, banks, financial institutions including individuals all liable for prosecution and penalty. 

♦ Concealment of income/evasion of income in relation to a foreign asset to be made a predicate offence under PML Act, 2002. 

♦ PML Act, 2002 and FEMA to be amended to enable administration of new Act on black money.

Make in India and Customs

• Basic Custom duty on certain inputs, raw materials, inter mediates and components in 22 items, reduced to minimise the impact of duty inversion. 
•  All goods, except populated printed circuit boards for use in manufacture of ITA bound items, exempted from SAD. 
• SAD reduced on import of certain inputs and raw materials. 
• Excise duty on chassis for ambulance reduced from 24% to 12.5%

Swatch Bharat

• 100% deduction for contributions, other than by way of CSR contribution, to Swachh Bharat Kosh and Clean Ganga Fund. 
•  Clean energy cess increased from INR 100 to INR 200 per metric tonne of coal, etc. to finance clean environment initiatives. 
•  Excise duty on sacks and bags of polymers of ethylene other than for industrial use increased from 12% to 15%.

Increase in basic custom duty:

♦ Metallergical coke from 2.5 % to 5%. 

♦ Tariff rate on iron and steel and articles of iron and steel increased from 10% to 15%. 

♦ Tariff rate on commercial vehicle increased from 10 % to 40%.