Rural India ‘Modivated’

Presenting the Budget 2016-17 in the Lok Sabha, Jaitley said political and economic considerations both converged in the budget in which he has made big allocation to the rural economy aimed at spurring growth. 

Jaitley has not raised tax exemption limit for those in high income categories, but he has provided relief to first-time home buyers and  tenants. Firsttime home buyers will be get an additional tax relief of Rs 50,000 on loan of up to Rs 35 lakh while deduction limit has been raised to Rs 60,000 for those living in rented dwellings. For small tax payers, earning less than Rs 5 lakh/annum, the rebate has increased from Rs 2,000 to Rs 5,000. 

Keeping in mind the health of poor women in rural areas, the FM has provided Rs 2,000 crore for issuing new LPG connections in the name of women in BPL families at subsidised rate. With the rural population benefitting big, some articles that will burn the pockets of urban class are cars, especially SUVs and luxury cars, branded jewellery, readymade garments and electricity generated from coal, which will become costlier from now on. 

To mobilise resources for financing agriculture and infrastructure expenditure and clean environment projects, the Budget has levied infrastructure cess of 1 per cent on small petrol, LPG, CNG cars, 2.5 per cent on diesel cars of certain capacity and 4 per cent on other higher engine capacity vehicles and SUVs. The budget also mandates deduction at source at the rate of 1 per cent on purchase of luxury cars exceeding value of Rs 10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh. 

The Budget has proposed raising excise duty on ready made garments with retail price of Rs 1,000 or more raised to 2 per cent without input tax credit or 12.5 per cent with input tax credit. The Budget has also proposed increasing excise duties on all tobacco products except ‘beedi’ from 10 to 15 per cent. 

The Budget has allocated Rs 38,500 crore for MGNREGS, Rs 38,984 crore for agriculture and farmers’ welfare and Rs 19,000 crore Pradhan Mantri Gram Sadak Yojana (Prime Minister’s Rural Road Scheme). The budget has announced health insurance of Rs 1 lakh for each family. 

Jaitley also outlined the nine priority areas, agriculture and farmer welfare, rural sector, social sector, education skills and job creation, infrastructure investment, financial sector reforms, governance reforms and ease of doing business, fiscal discipline and tax reforms. of the government that will transform the country. 

On the generation of faster employment, Jaitley proposed to assist propagation through cent per cent deduction of profits for 3 out of 5 years for startups set-up during April 2016 to March 2019. 

Jaitley proposed to exempt service tax on general insurance services provided under Niramya Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability. 

From now on, new government schemes will come with a ‘sunset’ clause, a date on which they will cease to exist. Finance Minister Arun Jaitley, while presenting the Union Budget today, said, “To improve the quality of government expenditure, every new scheme being sanctioned by government will have a sunset date.” He also said all schemes sanctioned will also come out with an “outcome review” to find out whether it actually helped the intended beneficiaries. 

Often, schemes introduced by one government are scrapped by the other, leading to political slugfest. Putting a ‘sunset clause’ in laws and schemes has been widely debated for a long time.