Updated
New Delhi, Jul 10 (IANS): Proposing to hike the tax exemption limit by Rs 50,000 for all individuals, Finance Minister Arun Jaitley Thursday presented the national budget for this fiscal with concerns over economic slowdown while promising bold corrective measures to unburden the poor from rising prices, revive investor confidence and cut excessive expenditure.
"People of India have voted decisively for change," Jaitley said in what was the maiden budget for himself and Prime Minister Narendra Modi's government. "Steps I unveil in the budget aim at 7-8 percent growth over the next three-four years, lower inflation, less fiscal deficit and a manageable current account deficit."
The finance minister said he proposed the tax exemption limit for individuals below 60 years at Rs.250,000, subject to parliament's approval, and Rs.300,000 for senior citizens. Deductions allowed under various heads such as investments in insurance, pension and house rent are also proposed to be raised by Rs 50,000 to Rs 150,000.
The minister said given the state of the economy today, high inflation, low growth and moderate rise in tax collections, the fiscal deficit target of 4.1 percent of India's gross domestic product set by his predecessor P. Chidambaram was a "daunting" task.
"But I have decided to accept this target as a challenge," he said, adding he will seek to further bring down the fiscal deficit to 3.6 percent for the next fiscal and to 3 percent in the year after.
He said the country cannot be made to suffer due to indecisiveness and populism and there was an urgent need to revive growth in manufacturing and infrastructure. "We will also examine proposals for more autonomy to banks."
The finance minister said the possibility of a poor monsoon and the Iraq crisis were key challenges with a bearing on both government finances and inflation. But he said the situation will be monitored closely to initiate immediate corrective steps.
"Financial stability is the foundation of our recovery."
Jaitley also promised early introduction of the pan-India goods and services tax, while assuring the domestic and global investment community of predictability in the tax regime to restore confidence about the country's prospects.
The budget for current fiscal comes against the backdrop of the Economic Survey 2013-14, the annual report card on the state of the nation, which has termed inflation-control, job creation and pushing growth as the three main challenges, while calling for a fresh dose of reforms.
Expectations have been high from the budget after Modi came to power with a landslide victory in the general elections, mainly on the promise of ushering in happy days for India's 1.2 billion people by creating more jobs, providing relief from price rise and reviving growth.
Among the various measures, Jaitley announced a national multi-scale programme called Skill India for providing training to youth and their employment, a national irrigation scheme and a smart city with an investment of over $1 billion as part of the larger plan for 100 such projects.
He also announced many other schemes, such as one to help farmers realise right prices for their produce, at least four more institutions modelled on the All India Institute of Medical Sciences (AIIMS), more money for people's welfare, many new airports on public-private partnership mode, a target of total sanitation in five years, greater autonomy for banks and higher investments by state-run enterprises.
Highlights
* Negative list for service tax reduced
* Excise duty on cigarettes raised from 11 percent to 72 percent
* Thirteen more airports to get 24x7 customs facilities
* Excise duty to be cut to revive manufacturing
* Allocation of Rs.500 crore for Delhi's water schemes
* Colour TVs to cost less on reduced customs duties
* Free baggage allowance raised from Rs.35,000 to Rs.45,000
* Gas pipeline grid of 15,000 km needs to be doubled
* Revenue loss of Rs.22,000 crore due to direct tax proposals
* Excise duty on footwear halved
* Total expenditure in 2014-15 estimated at Rs.17,97,892 crore; plan expenditure estimated at Rs.12,19,892 crore
* Government to take a view on Direct Tax Code
* Six debt recovery tribunals to be set up
* Five new tourist circuits to be established
* World class convention centre to come up in Goa
* IT exemption limit for those below 60 raised from Rs.2 lakhs to Rs.2.5 lakhs; from Rs.2.5 lakhs to Rs.3 lakhs for senior citizens
* No change in surcharge for corporates; education cess to continue
* Allocation of Rs.1,000 crore for implementing One Rank One Pension scheme
* War Memorial and War Museum to be established at Princess Park in New Delhi; Rs.1,000 crore allocated
* Allocation of Rs.50 crore for National Police Memorial
* Allocation of Rs.2.037 crore for creating integrated Ganga conservation mission
* National sports foundations to be set up for disciplines like shooting, wrestling and boxing; Jammu and Kashmir gets Rs.200 crore to upgrade sports facilities; Sports university to come up in Manipur
* Defence allocated Rs.229,000 crore; modernisation gets Rs.5,000 crore over and above interim budget
* Bharat Depository Receipt to be created
* Uniform KYC norms to be introduced across entire financial sector
* Steps to revive SEZs
* Sixteen new port projects to be taken up this fiscal
* Jal Marg Vikas programme to be launched to promote navigation on Ganga from Allahabad to Haldia
* Hastkala Academy to be set up with allocation of Rs.30 crore
* Six more textile clusters to be set up with allocation of Rs.200 crore
* Corpus of Rs.5,000 crore for long-term loans to farmers
* Kisan TV to be launched to disseminate information in real time
* Allocation of Rs.14,389 crore for rural roads
* Allocation of Rs.50 crore for breeding of indigenous cattle
* Export promotion mission to be established to bring all stakeholders under one umbrella
* Lok Sabha takes five-minute break during finance minister's speech. Jaitley permitted to sit and read out on resumption
* FDI limit in insurance sector raised to 49 percent
* All states to get AIIMS like institutions
* Allocation of Rs.100 crore for soil testing facilities
* Second Green Revolution to be launched with focus on protein revolution
* Allocation of Rs.100 crore to promote good governance
* Allocation of Rs.3,600 crore for drinking water schemes
* Allocation of Rs.500 crore for 5 more IITs and 5 more IIMs
* Allocation of Rs.4,000 crore for National Housing Bank
* Allocation of Rs.500 crore to improve broadband connectivity in rural areas
* To print currency notes with Braille signs
* Allocation of Rs.150 crore to improve safety of women in larger cities
* Allocation of Rs.500 crore to provide 24x7 power in rural areas
* Allocation of Rs.100 crore for "Beti bachao, beti padao" programme
* Allocation of Rs.8,000 crore to improve rural housing
* E-visas to be introduced at nine airports
* New scheme to provide assured irrigation
* Total sanitation in every household by 2019
* Shares of PSU banks to be sold to retail investors
* Aiming at fiscal deficit of 3 percent by 2015-16 and 2 percent by 2016-17
* FDI in defence sector raised to 49 percent from 26 percent
* CBDT to scrutinize all cases under 2012 law on retrospective tax cases
* Problem of black money to be fully addressed
* Expenditure Management Commission to be established this fiscal
* Slow decision-making has resulted in lost opportunities
* Green shoots of recovery in world economy
* Budget will lay down steps aimed at 7-8 percent growth in next few years
* The aim is "Sub ke saath, sub ka vikas" (With everyone, For everyone's development)
* Should we be victims of populism?