A staggering Rs 1.77 lakh crore has been set aside for the rural economy, and a massive Rs 2.21 lakh crore for the infrastructure sector to boost economic growth. However, the retirement benefit of withdrawal from PF corpus is now partially taxable, which is not good news.
The startups hope that these two demands will be considered by the Indian law makers before they pass the budget by March 31, when the Indian financial year concludes. A strong showing will be vital to Modi’s chances of a second term. “It addresses sectors which need highest priority, and rural areas need most attention”. It will create jobs in rural India, especially in the construction sector as it is the next biggest employer after agriculture.
Jaitley has further announced Excise duty on waters including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavored being increased from 18% to 21%.
RBI cheers public sector banks; shares rally 12%.
One notable proposal has been to earmark $74 million (500 crore rupees) for underprivileged sections (Scheduled Castes and Scheduled Tribes) of the society, as well as women entrepreneurs, in order to provide them easy access to funds. The fact that there is a thrust on pushing digital literacy among the rural youth is good news for a company like us, as we know that local language support will play a key role in ensuring the success of such initiatives.
A total of Rs 4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30, 2015.
Further, in line with announcements already made, certain tax incentives to start-ups are also being granted in form of exemption of 100 per cent of their profits for the initial three years (out of first five years) starting from the year of incorporation.
CII President Designate Naushad Forbes lamented that the Finance Minister has not reduced corporate tax at all this year except for very small firms.
Jaitley premised his Budget on three pillars: A prudent fiscal policy, raising domestic demand and carrying out reforms. Farmers want to get his ambitious land bill through Parliament so that he can execute his many pan-India infrastructural projects on time.
The finance minister said that the government has also to prioritise its expenditure for the financial year 2016-17 on account of the recommendations of 7th central pay commission and the implementation of defence OROP.
However, he hiked taxes on new cars and tobacco products, and imposed a new tax on large dividend payments to bridge the gap.
With the government aiming for an annual pace of 10,000 km for road projects, highways minister Nitin Gadkari said his ministry will generate approximately four crore man-days. While a few changes to the existing income tax slabs would have delighted the taxpayers, the Budget, nevertheless, seems to be a balanced one and should boost confidence in the Government’s capability to mitigate rural distress.
Rationalization of tax structure – 13 cesses, levied by various Ministries in which revenue collection is less than ‘ 50 crore in a year to be abolished.