Union budget 2015
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Transcript of Union budget 2015
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Union Budget 2015
VistaMind Education
+What will we cover?
Economic Overview
Context for the Policy decisions
Vision and Objective:
How various parts fit together
What could go wrong?
+Overview
GDP Growth
Expected to be 7.4% and between 8.1 to 8.5%
Fiscal Deficit at 4.1% and then 3.9% (plan 3.6%)
Current Account Deficit under control, Forex Reserves High
Inflation 5-6%
8.8 Lakh Crores worth of Infrastructure projects stalled
Bank balance sheets stressed (esp PSU Banks)
Private sector lacks funds/desire to invest
Taxation policy is major impediment to growth
India ranked 142/189 in terms of ease of business ranking
+Theme 1: Fiscal Consolidation
High Fiscal Deficit
Higher Borrowings
Inflation High Interest rates
Poor International Ratings
Need for Public Investment
Fiscal Deficit
2014-15 at 4.1%, 2015-16 to 3.9%, 3% by 2017/18.
Higher devolution to states around 40,000 Cr.
70,000 Cr Investment into infrastructure
+Theme 2: Infrastructure
Infrastructure Vs Subsidies and Schemes
70,000 Crore direct investment
Roads, Railways, Power and Irrigation
20,000 Crore seed fund for NIIF
Tax free infra bonds for Rails/Roads/Irrigation
Solving the Infrastructure traffic jam
Dispute resolution law for public contracts
Plug and play approach
Reworking the PPP model
JAM approach to subsidies
JDY – Aadhar Card – Mobile Transfers
Subsidy leakage and Admin costs
+Theme 3: Ease of Doing Business
Stable and predictable policy environment
Jaitley spells out what to expect in next 5 years
Tax reform
GAAR deferred, No retrospective taxation
Clarity in tax laws: Transfer pricing, PE, REITs, InvITs etc
GST from April 2016
Low stable Tax with minimum exemptions
Regulatory Environment
Lower regulations, Single window, Faster clearances
Exit Policy: Bankruptcy law
SEBI reforms
Public Debt Management Agency, Autonomous Bank Board etc
+Theme 4: Agriculture
Three pronged Approach
Rural credit expansion
Refinancing Cooperative banks, RRBs Rs 60,000 crore
Long term credit fund of Rs 15,000 Crore
Rural Infrastructure
Soil Testing, Micro irrigation
Power and Roads (Market Connectivity)
+Theme 5: Social Security
Creating a Social security Net
Encouraging Pension plans
Government contribute 50% of premium (Atal Pension plans)
Low cost Life and Health Insurance products (JAM)
Direct Cash Transfers
Autonomy for beneficiary
Low transaction costs and low losses
1 Crore to 10.5 Crore
Skill Enhancement
National Skills Mission. Skills integrated into schools from XI
Linked to Make in India
+Theme 6: Entrepreneurship/Make in
India
Job seekers to Job creators
Swach Bharat, Soil Testing, Tourism etc create opportunities
10,000 Crore fund for Tech start ups
Mudra
New bank for SME’s
Electronic Trade receivables discounting system
Tariff rationalization
Raw material and Intermediates made cheaper
Fully finished imports costlier
+Theme 7: Cooperative Federalism
Centre & State relations
Greater share of funds 32% to 42% to states
Coal Auction proceeds to go to states
Reduction in Central Sponsored schemes
What does it Mean?
State autonomy in use of funds
States to focus on Capital expenditure/Infra building
Decentralized decision making
Niti Aayog: To become a coordinating agency