Union Budget 2014-15

UNION BUDGET 201415

Overview
The full Union Budget for 201415 was presented
by the Union Finance Minister on July 10, 2014
aiming to be in sync with major data set of the
Interim Budget for the year presented by the last
Government. The Highlights of the Budget are
given below.

The Current Economic Situation and the

Challenges

Decisive vote for change represents the desire

of the people to grow, free themselves from
the curse of poverty and use the opportunity
provided by the society. Country in no
mood to suffer unemployment, inadequate
basic amenities, lack of infrastructure and
apathetic governance.

Challenging situation due to Sub-five per cent

growth and double digit inflation.

Continued slow-down in many emerging

economies a threat to sustained global
recovery.

Recovery seen with the growth rate of world

economy projected at 3.6 per cent in 2014
vis--vis in 2013.

First budget of this NDA government to

lay down a broad policy indicator of the
direction in which we wish to take this
country.

Narendra Modi and its mandate of Sab ka

Saath Sab ka Vikas.

Need to revive growth in manufacturing and

infrastructure sectors.

Tax to GDP ratio must be improved and

Non-tax revenues increased.

Deficit and Inflation

Decline in fiscal deficit from 5.7 per cent in

201112 to 4.5 per cent in 201314 mainly
achieved by reduction in expenditure rather
than by way of realisation of higher revenue.

Improvement in current account deficit from

4.7 per cent in 201213 to year end level
of 1.7 per cent mainly achieved through
restriction on non-essential import and slowdown in overall aggregate demand. Need to
keep watch on CAD.

4.1 per cent fiscal deficit a daunting task in the

backdrop of two years of low GDP growth,
static industrial growth, moderate increase
in indirect taxes, subsidy burden and not so
encouraging tax buoyancy.

KEY FEATURES OF BUDGET 2014

2015

Steps announced are only the beginning

of the journey towards a sustained growth
of 78 per cent or above within the next
34 years along with macro-economic
stabilisation.

The government is committed to achieve

this target. Road map for fiscal consolidation
outlines fiscal deficit of 3.6 per cent for 2015
16 and 3 per cent for 201617.

Inflation has remain at elevated level with

gradual moderation in WPI recently.

Growing aspirations of people will be

reflected in the development strategy of the
Government led by the Prime minister Shri

The problem of black money must be fully

addressed.

Bold steps required to enhance economic

activities and spur growth in the economy.

Indian Economy

Administrative Initiatives

Sovereign right of the Government to

undertake retrospective legislation to
be exercised with extreme caution and
judiciousness keeping in mind the impact of
each such measure on the economy and the
overall investment climate.

A stable and predictable taxation regime, which

will be investor friendly and spur growth.

Legislative and administrative changes to sort

out pending tax demands of more than Rs 4
lakh crore under dispute and litigation.

Resident taxpayers enabled to obtain on

advance ruling in respect of their income-tax
liability above a defined threshold.

Measures for strengthening the Authority for

Advance Rulings.

Income-tax Settlement Commission scope

to be enlarged.

National Academy for Customs & Excise at

Hindupur in Andhra Pradesh.

The subsidy regime to be made more targeted

for full protection to the marginalised, poor
and SC/ST.

ECONOMIC INITIATIVES
Foreign Direct Investment

Government to promote FDI selectively in

sectors.

The composite cap of foreign investment to

be raised to 49 per cent with full Indian
management and control through the FIPB
route.

The composite cap in the insurance sector

to be increased up to 49 per cent from 26
per cent with full Indian management and
control through the FIPB route.

Requirement of the built up area and capital

conditions for FDI to be reduced from
50,000 square metres to 20,000 square metres
and from USD 10 million to USD 5 million
respectively for development of smart cities.

The manufacturing units to be allowed to

sell its products through retail including
Ecommerce platforms.

Bank Capitalisation

High level committee to interact with trade

and industry on regular basis to ascertain
areas requiring clarity in tax laws is required
to be set up.

Requirement to infuse Rs 2,40,000 crore as

equity by 2018 in our banks to be in line with
Basel-III norms

Capital of banks to be raised by increasing

the shareholding of the people in a phased
manner.

Convergance with International Financial

Reporting Standard (IFRS) by Adoption of
the new Indian Accounting Standards (2nd AS)
by Indian Companies.

PSU Capital Expenditure

New Urea Policy would be formulated.

Introduction of GST to be given thrust.

Setting up of Expenditure Management

Commission to look into expenditure reforms.

Employment exchanges to be transformed

into career centres. A sum of Rs 100 crore
provided .

PSUs will invest through capital investment a

total sum of Rs 2,47,941 crore in the current
financial year.

Smart Cities

A sum of Rs 7060 crore is provided in the

current fiscal for the project of developing
one hundred Smart Cities.

Union Budget 2014-15

Real Estate

Incentives for Real Estate Investment Trusts

(REITS). Complete pass through for the
purpose of taxation.

A modified REITS type structure for

infrastructure projects as the Infrastructure
Investment Trusts (INVITS).

These two instruments to attract long term

finance from foreign and domestic sources
including the NRIs .

Irrigation

New programme Neeranchal to give impetus

to watershed development in the country
with an initial outlay of Rs 2,142 crore.

Backward Region Grant Fund (BRGF) to

be restructured to address intra-district
inequalities.

Scheduled Caste/Scheduled Tribe

An amount of Rs 50,548 crore is proposed

under the SC Plan and Rs 32,387 croreunder
TSP.

For the welfare of the tribals Van Bandhu

Kalyan Yojna launched with an initial
allocation of Rs 100 crore.

Rs 1000 crore provided for Pradhan Mantri

Krishi Sinchayee Yojna for assured irrigation.

Rural Development

Shyama Prasad Mukherji Rurban Mission for

integrated project based infrastructure in the
rural areas.

Rs 500 crore for Deen Dayal Upadhyaya Gram

Jyoti Yojana for feeder separation to augment
power supply to the rural areas.

Rs 14,389 crore provided for Pradhan Mantri

Gram Sadak Yojna(PMGSY).

More productive, asset creating and with

linkages to agriculture and allied activities
wage employment would to be provided
under MGNREGA.

Under Ajeevika, the provision of bank

loan for women SHGs at 4 per cent to be
extended to another 100 districts.

Initial sum of Rs 100 crore for Start Up

Village Entrepreneurship Programme for
encouraging rural youth to take up local
entrepreneurship programs.

Allocation for National Housing Bank

increased to Rs 8000 crore to support Rural
housing.

Senior Citizen & Differently Abled Persons

Varishtha Pension Bima Yojana (VPBY) to be

revived for a limited period from 15 August,
2014 to 14 August, 2015 for the benefit of
citizens aged 60 years and above.

A committee will to examine and recommend

how unclaimed amounts with PPF, Post
Office, saving schemes etc. can be used to
protect and further financial interests of the
senior citizens?

Government notified a minimum pension

of Rs 1,000 per month to all subscriber
members of EP Scheme. Initial provision
of Rs 250 crore.

Increase in mandatory wage ceiling of

subscription to Rs 15,000. A provision of
Rs 250 crore in the current budget.

EPFO to launch the Uniform Account

Number Service for contributing members.

Scheme for Assistance to Disabled Persons

for purchase/fitting of Aids and Appliances
(ADIP) extended to include contemporary
aids and assistive devices.

Indian Economy

National level institutes for Universal Inclusive

Design, Mental Health Rehabilitation and a
Centre for Disability Sports to be established.

Two National Institutes of Ageing to be set

up at AIIMS, New Delhi and Madras Medical
College, Chennai.

Assistance to State Governments to establish

fifteen new Braille Presses and modernise ten
existing Braille Presses.

A national level research and referral Institute

for higher dental studies to be set up.

AIIMS like institutions in Andhra Pradesh,

West Bengal, Vidarbha in Maharashtra and
Poorvanchal in UP. A provision of Rs 500
crore made.

12 new government medical colleges to be

set up.

States Drug Regulatory and Food Regulatory

Systems to be strengthened by creating new
drug testing laboratories and strengthening
the 31 existing State laboratories.

Government to print currency notes with

Braille like signs for visibly challenged
persons.

Women & Child Development

Outlay of Rs 50 crore for pilot testing a

scheme on Safety for Women on Public Road
Transport.

Sum of Rs 150 crore on a scheme to increase

the safety of women in large cities.

Crisis Management Centres in all the districts

of NCT of Delhi this year government and
private hospitals.

15 Model Rural Health Research Centres to

be set up for research on local health issues
concerning rural population.

A national programme in Mission Mode to

halt the deteriorating malnutrition situation
in India to be put in place within six months.

A sum of Rs 100 crore is provided for Beti

Bachao, Beti Padhao Yojana, a focused scheme
to generate awareness and help in improving
the efficiency of delivery of welfare services
meant for women.
School curriculum to have a separate chapter on
gender mainstreaming.

Drinking Water & Sanitation

20,000 habitations affected with arsenic,

fluoride, heavy/ toxic elements, pesticides/
fertilizers to be provided safe drinking water
through community water purification plants
in next 3 years Swachh Bharat Abhiyan to
cover every household with sanitation facility
by the year 2019.

EDUCATION
School Education

Government would strive to provide toilets

and drinking water in all the girls school in
first phase. An amount of Rs 28,635 crore is
being funded for Sarv Shiksha Abhiyan(SSA)
and Rs 4,966 crore for Rashtriya madhyamic
Shiksha Abhiyan (RMSA).

A School Assessment Programme is being

initiated at a cost of Rs 30 crore.

Rs 500 crore provided for Pandit Madan

Mohan Malviya New Teachers Training
Programme to infuse new training tools and
motivate teachers.

Rs 100 crore provided for setting up virtual

classrooms as Communication Linked Interface

Health and Family Welfare

Free Drug Service and Free Diagnosis

Service to achieve Health For All

Union Budget 2014-15

for Cultivating Knowledge (CLICK) and online

courses.

Jai Prakash Narayan National Centre for

Excellence in Humanities to be set up in MP.

Present corpus of Pooled Municipal Debt

Obligation Facility to be enlarged to Rs
50,000 Crore from Rs 5,000 crore.

Rs 500 crore provided for setting up 5 more

IITs in the Jammu, Chhattisgarh, Goa,
Andhra Pradesh and Kerala.

Rs 100 crore provided for Metro Projects in

Lucknow and Ahemdabad.

Housing

Higher Education

renewal of infrastructure and services in next

10 years through PPPs

5 IIMs in the States of HP, Punjab, Bihar,

Odisha and Rajasthan.

Simplification of norms to facilitate education

loans for higher studies.

Extended additional tax incentive on home

loans shall be provided to encourage people,
especially the young, to own houses.

Mission on Low Cost Affordable Housing

anchored in the National Housing Bank to
be set up.

A sum of Rs 4000 crore for NHB from the

priority sector lending shortfall with a view
to increase the flow of cheaper credit for
affordable housing to the urban poor/EWS/
LIG segment is provided.

Slum development to be included in the list

of Corporate Social Responsibility (CSR)
activities to encourage the private sector to
contribute more.

Information Technology

Pan India programme Digital India to with

an outlay of Rs 500 crore to be launched.

Programme for promoting Good Governance

to be launched. A sum of Rs 100 crore
provided.

Information and Broadcasting

Rs 100 crore allocated for 600 new and

existing Community Radio Stations.

Film & Television Institute, Pune and Satyajit

Ray Film & Television Institute, Kolkata are
proposed to be accorded status of Institutes
of national importance and a National
Centre for Excellence in Animation, Gaming
and Special Effects to be set up.

Rs 100 crore is provided for Kisan TV, to

disseminate real time information to the
farmers on issues such as new farming
techniques, water conservation, organic
farming etc.

Urban Development

Vision of the Government is that 500 urban

habitations to be provided support for

Minorities

A programme for the up gradation of skills

and training in ancestral arts for development
for the minorities Up gradation of Traditional
Skills in Arts, Resources and Goods to be
launched.

An additional amount of Rs 100 crore for

Modernisation of Madarsas

AGRICULTURE

Gover nment to establish two more

Agricultural Research Institute of excellence
in Assam and Jharkhand with an initial sum
of Rs 100 crore.

Indian Economy

An amount of Rs 100 crore set aside for

Agri-tech Infrastructure Fund.

Rs 200 crore provided to open Agriculture

Universities in Andhra Pradesh and Rajasthan
and Horticulture Universities in Telangana
and Haryana.

A scheme to provide every farmer a soil

health card in a Mission mode will be
launched.

Rs 100 crore has been provided for this

purpose and additional Rs 56 crore to set up
100 Mobile Soil Testing Laboratories across
the country.

To meet the vagaries of climate change a

National Adaptation Fund with an initial sum
an amount of Rs 100 crore will be set up.

A sustainable growth of 4 per cent in

Agriculture will be achieved.

Technology driven second green revolution

with focus on higher productivity and
including Protein Revolution will be area of
major focus.

To mitigate the risk of Price volatility in the

agriculture produce, a sum of Rs 500 crore is
provided for establishing a Price Stabilisation
Fund.

A target of Rs 8 lakh crore has been set for

agriculture credit during 201415.

Corpus of Rural Infrastructure Development

Fund (RIDF) raised by an additional Rs 5000
crore from the target given in the Interim
Budget to Rs 25000 crore.

Allocation of Rs 5,000 crore provided for

the Warehouse Infrastructure Fund.

Long Term Rural Credit Fund to set up for

the purpose of providing refinance support
to Cooperative Banks and Regional Rural
Banks with an initial corpus of Rs 5,000
crore.

Amount of Rs 50,000 crore allocated for

Short Term Cooperative Rural Credit.

Sum of Rs 200 crore for NABARDs

Producers Development and Upliftment
Corpus (PRODUCE) for building 2,000
producers organisations over the next two
years.

Food Security

Central Government to work closely with

the State Governments to re-orient their
respective APMC Acts.

Restructuring FCI, reducing transportation

and distribution losses and efficacy of PDS
to be taken up on priority.

Sum of Rs 50 crore provided for the

development of indigenous cattle breeds and
an equal amount for starting a blue revolution
in inland fisheries.

Government committed to provide wheat

and rice at reasonable prices to the weaker
sections of the society.

Government when required will undertake

open market sales to keep prices under
control.

Transformation plan to invigorate the

warehousing sector and significantly improve
post-harvest lending to farmers.

INDUSTRY

Agriculture Credit

5 lakh joint farming groups of Bhoomi Heen

Kisan through NABARD .

To provide institutional finance to landless

farmers, it is proposed to provide finance to

Central Government Departments and

Ministries to integrate their services with the
e-Biz a single window IT platform for
services on priority by 31 December this year.

Union Budget 2014-15

Rs 100 crore provided for setting up a

National Industrial Corridor Authority.

Corpus of Rs 200 crore to be set up to

establish Technology Centre Network .

Amritsar Kolkata Industrial master planning

to be completed expeditiously.

Definition of MSME to be reviewed to

provide for a higher capital ceiling.

Master planning of 3 new smart cities in

the ChennaiBengaluru Industrial Corridor
region, viz., Ponneri in Tamil Nadu,
Krishnapatnam in Andhra Pradesh and
Tumkur in Karnataka to be completed.

Programme to facilitate forward and

backward linkages with multiple value chain
of manufacturing and service delivery to be
put in place.

Perspective plan for the Bengaluru Mumbai

Economic corridor (BMEC) and Vizag
Chennai corridor to be completed with the
provision for 20 new industrial clusters.

Entrepreneur friendly legal bankruptcy

framework will be developed for SMEs to
enable easy exit.

A nationwide District Level Incubation and

Accelerator Programme to be taken up for
incubation of new ideas and necessary
support for accelerating entrepreneurship.

Development of industrial corridors with

emphasis on Smart Cities linked to transport
connectivity to spur growth in manufacturing
and urbanisation will be accelerated.

Proposed to establish an Export promotion

Mission to bring all stakeholders under one
umbrella.

Apprenticeship Act to be suitably amended

to make it more responsive to industry and
youth.

Textiles

Rs 50 crore is provided to set up a Trade

Facilitation Centre and a Crafts Museum to
develop and promote handloom products
and carry forward the rich tradition of
handlooms of Varanasi.

Sum of Rs 500 crore for developing a Textile

mega-cluster at Varanasi and six more at
Bareilly, Lucknow, Surat, Kutch, Bhagalpur
and Mysore.

Rs 20 crore to set up a Hastkala Academy for

the preservation, revival, and documentation
of the handloom/handicraft sector in PPP
mode in Delhi.

Rs 50 crore is provided to start a Pashmina

Promotion Programme (P-3) and
development of other crafts of Jammu &
Kashmir.

Micro Small and Medium Enterprises

(MSME) Sector

Skill India to be launched to skill the youth

with an emphasis on employability and
entrepreneur skills.

Committee to examine the financial

architecture for MSME Sector, remove
bottlenecks and create new rules and
structures to be set up and give concrete
suggestions in three months.

Fund of Funds with a corpus of Rs 10,000

crore for providing equity through venture
capital funds, quasi equity, soft loans and
other risk capital specially to encourage new
startups by youth to be set up.

INFRASTRUCTURE

An institution to provide support to

mainstreaming PPPPs called 4PIndia to be
set up with a corpus of Rs 500 crore.

Indian Economy

Shipping

Rs 11635 crore will be allocated for the

development of Outer Harbour Project in
Tuticorin for phase I.

SEZs will be developed in Kandla and JNPT.

Comprehensive policy to be announced to

promote Indian ship building industry.

Inland Navigation

Project on Ganges called Jal Marg Vikas to

be developed between Allahabad and Haldia.

New Airports

Scheme for development of new airports in

Tier I and Tier II Cities to be launched.

Roads sector

Sector needs huge amount of investment

along with debottlenecking from maze of
clearances.

An investment of an amount of Rs 37,880 crore

in NHAI and State Roads is proposed which
includes Rs 3,000 crore for the North East.

An exercise to rationalise coal linkages to

optimise transport of coal and reduce cost
of power is underway.

New & Renewable Energy

Rs 500 crore provided for Ultra Mega Solar

Power Projects in Rajasthan, Gujarat, Tamil
Nadu, Andhra Pradesh and Laddakh.

Rs 400 crore provided for a scheme for solar

power driven agricultural pump sets and
water pumping stations.

Rs 100 crore provided for the development

of 1 MW Solar Parks on the banks of canals.

A Green Energy Corridor Project is being

implemented to facilitate evacuation of
renewable energy across the country.

Petroleum & Natural Gas

Production and exploitation of Coal Bed

Methane reserves will be accelerated.

Possibility of using modern technology to

revive old or closed wells to be explored.

Usage of PNG to be rapidly scaled up in a

Mission mode.
Proposal to develop pipelines using
appropriate PPP models.

Target of NH construction of 8,500 km will

be achieved in current financial year.

Work on select expressways in parallel to the

development of the Industrial Corridors will
be initiated. For project preparation NHAI
shall set aside a sum of ` 500 crore.

Mining

Energy

Rs 100 crore is allocated for a new scheme

Ultra-Modern Super Critical Coal Based Thermal
Power Technology.

Comprehensive measures for enhancing

domestic coal production are being put in place.

Adequate quantity of coal will be provided to

power plants which are already commissioned
or would be commissioned by March 2015.

Changes, if necessary, in the MMDR

Act, 1957 to be introduced to encourage
investment in mining sector and promote
sustainable mining practices.

FINANCIAL SECTOR
Capital Market

Ongoing process of consultations with all the

stakeholders on the enactment of the Indian

Union Budget 2014-15

Financial Code and reports of the Financial

Sector Legislative Reforms Commission
(FSLRC) to be completed.

Government in close consultation with the

RBI to put in place a modern monetary
policy framework.

Following measures will be taken to energise

Capital markets.

Introduction of uniform KYC norms and

inter-usability of the KYC records across
the entire financial sector.

Introduce one single operating demat

account Uniform tax treatment for pension
fund and mutual fund linked retirement plan.

BANKING AND INSURANCE SECTOR

Banking

Time bound programme as Financial

Inclusion Mission to be launched on 15
August this year with focus on the weaker
sections of the society.
Banks to be encouraged to extend long-term
loans to infrastructure sector with flexible
structuring.
Banks to be permitted to raise long-term
funds for lending to infrastructure sector with
minimum regulatory pre-emption such as CRR,
SLR and Priority Sector Lending (PSL).

For venture capital in the MSME sector, a

Rs 10,000 crore fund to act as a catalyst to
attract private Capital by way of providing
equity , quasi equity, soft loans and other risk
capital for start-up companies with suitable
tax incentives to participating private funds
to be established.

Insurance Sector

The pending insurance laws (amendment) Bill

to be immediately brought for consideration
of the Parliament.

The regulatory gap under the Prize Chits and

Money Circulation Scheme (Banking) Act,
1978 will be bridged.

Small Savings

Kissan Vikas Patra (KVP) to be reintroduced.

A special small savings instrument to cater to

the requirements of educating and marriage
of the Girl Child to be introduced.

A National Savings Certificate with insurance

cover to provide additional benefits for the
small saver.

In the PPF Scheme, annual ceiling will be

enhanced to Rs 1.5 lakh p.a. from Rs 1 lakh
at present.

DEFENCE & INTERNAL SECURITY

RBI to create a framework for licensing small

banks and other differentiated banks.

A further sum of Rs 1000 crore to meet

requirement for One Rank One Pension.

Differentiated banks serving niche interests,

local area banks, payment banks etc. are
contemplated to meet credit and remittance
needs of small businesses, unorganised
sector, low income households, farmers and
migrant work force.

Capital outlay for Defence increased by Rs

5000 crore including a sum of Rs 1000 crore
for accelerating the development of the
Railway system in the border areas.

Urgent steps would also be taken to

streamline the procurement process to make
it speedy and more efficient.

Six new Debt Recovery Tribunals to be set

up.

10

Indian Economy

Rs 100 crore is provided for construction of

a war memorial in the Princes Park, which
will be supplemented by a War Museum. I am
allocating a sum of ` 100 crore for this purpose.

Rs 100 crore is provided to set up a

Technology Development Fund for Defence.

Rs 200 crore provided for National Heritage

City Development and Augmentation Yojana
(HRIDAY).

Rs 100 crore provided for Archaeological

sites preservation.

SarnathGayaVaranasi Buddhist circuit

to be developed with world class tourist
amenities to attract tourists from all over the
world.

Internal Security

Rs 3000 crore is provided in the current

financial year for modernisation of state
police forces.

Adequate allocation for Additional Central

Assistance for Left Wing Extremist Affected
districts.

Rs 2250 crore provided to strengthen and

modernise border infrastructure.

Rs 990 crore allocated for the socio economic

development of the villages along the borders.

Water Resources and cleaning of Ganga

Rs 100 crore provided for Detailed Project

Reports for linking of rivers.

Rs 2,037 crore provided for Integrated

Ganga Conservation Mission NAMAMI
GANGE.

A sum of Rs 150 crore ear-marked for the

construction of Marine Police Station, Jetties
and for the purchase of boats etc.

Rs 100 crore provided for Ghat development

and beautification at Kedarnath, Haridwar,
Kanpur, Varanasi, Allahabad, Patna and
Delhi.

NRI Fund for Ganga will be set up.

Rs 50 crore provided for construction of

National Police Memorial.

Science and Technology

CULTURE & TOURISM

Rs 200 crore provided to build the Statue of

unity(National project).

Facility of Electronic Travel Authorisation

(e-Visa) to be introduced in phased manner
at nine airports in India.

Countries to which the Electronic Travel

authorisation facility would be extended
would be identified in a phased manner.

Rs 500 crore provided for developing 5

tourist circuits around specific themes.

Rs 100 crore provided for National Mission

on Pilgrimage Rejuvenation and Spiritual
Augmentation Drive (PRASAD).

Government to strengthen at least five

institutions as Technical Research Centres.

Development of Biotech clusters in

Faridabad and Bengaluru.

Nascent agri-biotech cluster in Mohali to be

scaled up. In addition, two new clusters, in
Pune and Kolkata to be established.

Global partnerships will be developed under

Indias leadership to transform the Delhi
component of the International Centre for
Genetic Engineering and Biotechnology
(ICGEB) into a world-leader in life sciences
and biotechnology.

Several major space missions planned for

201415.

Union Budget 2014-15

Sports and Youth Affairs

Rs 200 crore provided for upgrading the

indoor and outdoor sports stadiums in
Jammu and Kashmir Valley to international
standards.

Rs 100 crore provided for sports university

in Manipur.

India to start an annual event to promote

Unique sports traditions in the Himalayan
region games.

Rs 100 crore provided for the training of

sports women and men for forthcoming
Asian games.

A Young Leaders Programme with an initial

allocation of Rs 100 crore to be set up.

North Eastern States

Rs 100 crore provided for development of

organic farming in North Eastern States.

Rs 1000 crore provided for development

of rail connectivity in the North Eastern
Region.

To provide a strong platform to rich cultural

and linguistic identity of the North-East, a
new 24x7 channel called Arun Prabha will
be launched.

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Andaman and Nicobar Island

and Puducherry

Rs 150 crore provided to tide over

communication related problems of the
Island.

Rs 188 crore to Puducherry for meeting

commitments for Disaster preparedness.

Displaced Kashmiri Migrants

Government committed to addressing the

issues relating to development of Andhra
Pradesh and Telangana in the AP Reorganisation Act, 2014. Provision made by
various Ministries/Departments to fulfill the
obligation of Union Government.

Rs 200 crore for power reforms and Rs 500

crore for water reforms to make Delhi a truly
World Class City.

Rs 100 crore provided to set up a National

Centre for Himalayan Studies in Uttarakhand.

BUDGET ESTIMATES

Mandate to be fulfilled without compromising

fiscal consolidation.

Non-plan Expenditure of Rs 12,19,892 crore

with additional provision for fertilizer
subsidy and Capital expenditure for Armed
forces.

Rs 5,75,000 crore Plan expenditure increase

of 26.9 per cent over actuals of 201314.

Plan increase targeted towards Agriculture,

capacity creation in Health and Education,
Rural Roads and National Highways
Infrastructure, Railways network expansion,
clean energy initiatives, development of
water resources and river conservation plans.

Total expenditure of Rs 17,94,892 crore

estimated.

NCT of Delhi

Rs 500 crore provided to support displaced

Kashmiri migrants for rebuilding their lives.

Himalayan Studies

Andhra Pradesh and Telangana

Rs 50 crore provided to solve the long term

water supply issues to the capital region.
Construction of long pending Renuka Dam
to be taken up on priority.

12

Indian Economy

Gross Tax receipts of Rs 13,64,524 crore

estimated.

Net to centre of Rs 9,7,258 crore estimated.

Fiscal deficit of 4.1 per cent of GDP and

Revenue deficit of 2.9 per cent estimated.

New Statement to separately show plan

allocation made for North Eastern Region.
Allocation of Rs 53,706 crore for North East
Regions.

Allocation of Rs 50,548 crore under SCSP

and Rs 32,387 under TSP.

Allocation for women at Rs 98,030 crore and

for children at Rs 81,075 crore.

TAX PROPOSALS

Ambitious Revenue Collection Targets

in Interim Budget. Proposed tax changes
factored in the Budget Estimates 201415.

Measures to revive the economy, promote

investment in manufacturing, rationalise tax
provisions to reduce litigation, address the
problem of inverted duty structure in certain
areas. Tax reliefs to individual tax payers.

Direct Taxes Proposals

Personal Income-tax exemption limit raised by

Rs 50,000, i.e., from Rs 2 lakh to Rs 2.5 lakh
in the case of individual taxpayers, below the
age of 60 years. Exemption limit raised from
Rs 2.5 lakh to Rs 3 lakh in the case of senior
citizens.
No change in the rate of surcharge either
for the corporates or the individuals, HUFs,
firms etc.

The education cess to continue at 3 per cent.

Investment limit under Section 80C of the

Income-tax Act raised from Rs 1 lakh to Rs
1.5 lakh.

Deduction limit on account of interest

on loan in respect of self occupied house
property raised from Rs 1.5 lakh to Rs 2 lakh.

Conducive tax regime to Infrastructure

Investment Trusts and Real Estate Investment
Trusts to be set up in accordance with
regulations of the Securities and Exchange
Board of India.

Investment allowance at the rate of 15

per cent to a manufacturing company that
invests more than Rs 25 crore in any year in
new plant and machinery. The benefit to be
available for three years, i.e., for investments
up to March 31, 2017.

Investment linked deduction extended to

two new sectors, namely, slurry pipelines
for the transportation of iron ore, and semiconductor wafer fabrication manufacturing
units.

10 year tax holiday extended to the undertakings

which begin generation, distribution and
transmission of power by March 31, 2017.

Income arising to foreign portfolio investors

from transaction in securities to be treated
as capital gains.

Concessional rate of 15 per cent on foreign

dividends without any sunset date to be
continued.

The eligible date of borrowing in foreign

currency extended from June 30, 2015 to
June 30, 2017 for a concessional tax rate of 5
per cent on interest payments. Tax incentive
extended to all types of bonds instead of
only infrastructure bonds.

Introduction of a Roll Back provision in the

Advanced Pricing Agreement (APA) scheme
so that an APA entered into for future
transactions is also applicable to international
transactions undertaken in previous four
years in specified circumstances.

Union Budget 2014-15

Introduction of rang e concept for

determination of arms length price in
transfer pricing regulations.
To allow use of multiple year data for
comparability analysis under transfer pricing
regulations.
To remove tax arbitrage, rate of tax on longterm capital gains increased from 10 per cent
to 20 per cent on transfer of units of Mutual
Funds, other than equity oriented funds.

Income and dividend distribution tax to be

levied on gross amount instead of amount
paid net of taxes.

In case of non-deduction of tax on

payments, 30 per cent of such payments will
be disallowed instead of 100 per cent.

Government to review the DTC in its present

shape and take a view in the whole matter.

60 more Ayakar Seva Kendras to be opened

during the current financial year to promote
excellence in service delivery.

Net Effect of the direct tax proposals to

result in revenue loss of Rs 22,200 crore.

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on imported electronic products for parity

etc.

Colour picture tubes exempted from basic

customs duty to make cathode ray TVs cheaper
and more affordable to weaker sections.

To encourage production of LCD and LED

TVs below 19 inches in India, basic customs
duty on LCD and LED TV panels of below
19 inches reduced from 10 per cent to Nil.

To give an impetus to the stainless steel

industry, increase in basic customs duty on
imported flat-rolled products of stainless
steel from 5 per cent to 7.5 per cent.

Concessional basic customs duty of 5 per

cent extended to machinery and equipment
required for setting up of a project for solar
energy production.

Specified inputs for use in the manufacture

of EVA sheets and back sheets and flat
copper wire for the manufacture of PV
ribbons exempted from basic customs duty.

Reduction in basic customs duty from 10

per cent to 5 per cent on forged steel rings
used in the manufacture of bearings of wind
operated electricity generators. Exemption
from SAD of 4 per cent on parts and raw
materials required for the manufacture of
wind operated generators.

Concessional basic customs duty of 5 per

cent on machinery and equipment required
for setting up of compressed biogas plants
(Bio-CNG).

Anthracite coal, bituminous coal, coking

coal, steam coal and other coal to attract 2.5
per cent basic customs duty and 2 per cent
CVD to eliminate all assessment disputes and
transaction costs associated with testing of
various parameters of coal.

Basic customs duty on metallurgical coke

increased from Nil to 2.5 per cent in line
with the duty on coking coal.

Indirect Taxes Proposals

To boost domestic manufacture and to

address the issue of inverted duties, basic
customs duty (BCD) reduced on certain
items.
To encourage new investment and capacity
addition in the chemicals and petrochemicals
sector, basic customs duty reduced on certain
items.
Steps taken to boost domestic production of
electronic items and reduce our dependence
on imports. These include imposition of basic
customs duty on certain items falling outside
the purview of IT Agreement, exemption
from SAD on inputs/components for PC
manufacturing, imposition of education cess

14

Indian Economy

Duty on ship breaking scrap and melting

scrap of iron or steel rationalised by reducing
the basic customs duty on ships imported for
breaking up from 5 per cent to 2.5 per cent.

To prevent misuse and avoid assessment

disputes, basic customs duty on semiprocessed, half cut or broken diamonds,
cut and polished diamonds and coloured
gemstones rationalised at 2.5 per cent.

Prospective levy of a nominal duty of 2 per

cent without Cenvat benefit and 6 per cent
with Cenvat benefit on such PSF and PFY.

Concessional excise duty of 2 per cent

without Cenvat benefit and 6 per cent with
Cenvat benefit on sports gloves.

Specific rates of excise duty increased on

cigrettes in the range of 11 per cent to 72
per cent.

Excise duty increased from 12 per cent to 16

per cent on pan masala, from 50 per cent to
55 per cent on unmanufactured tobacco and
from 60 per cent to 70 per cent on gutkha
and chewing tobacco.

To encourage exports, pre-forms of precious

and semi-precious stones exempted from
basic customs duty.

Duty free entitlement for import of

trimmings, embellishments and other
specified items increased from 3 per cent to
5 per cent of the value of their export, for
readymade garments.

Export duty on bauxite increased from 10

per cent to 20 per cent.

Levy of an additional duty of excise at 5

per cent on aerated waters containing added
sugar.

For passenger facilitation, free baggage

allowance increased from Rs 35,000 to Rs
45,000.

To finance Clean Environment initiatives,

Clean Energy Cess increased from Rs 50 per
tonne to Rs 100 per tonne.

To incentivise expansion of processing

capacity, reduction in excise duty on specified
food processing and packaging machinery
from 10 per cent to 6 per cent.

Reduction in the excise duty from 12 per

cent to 6 per cent on footwear of retail price
exceeding Rs 500 per pair but not exceeding
Rs 1,000 per pair.

Service Tax

To broaden the tax base in Service Tax, sale of

space or time for advertisements in broadcast
media, extended to cover such sales on other
segments like online and mobile advertising.
Sale of space for advertisements in print
media however would remain excluded from
service tax. Service provided by radio-taxis
brought under service tax.

Withdraw concessional excise duty (2 per

cent without Cenvat benefit and 6 per cent
with Cenvat benefit) on smart cards and a
uniform excise duty at 12 per cent.

Services by air-conditioned contract carriages

and technical testing of newly developed
drugs on human participants brought under
service tax.

To develop renewable energy, various items

exempted from excise duty.

Exemption to PSF and PFY manufactured

from plastic waste and scrap including PET
bottles from excise duty with effect from
29th June, 2010 to 7th May, 2012.

Provision of services rules to be amended

and tax incidence to be reduced on transport
of goods through coastal vessels to promote
Indian Shipping industry.

Services provided by Indian tour operators

to foreign tourists in relation to a tour wholly

Union Budget 2014-15

conducted outside India to be taken out of

the tax net and Cenvat credit for services of
rent-a-cab and tour operators to be allowed
to promote tourism.

Service tax exempted on loading, unloading,

storage, warehousing and transportation of
cotton, whether ginned or baled.

Services provided by the Employees State

Insurance Corporation for the period prior
to 1st July 2012 exempted, from service tax.

15

exempted.

Tax proposals on the indirect taxes side are

estimated to yield Rs 7525 crore.

24X7 customs clearance facility extended

to 13 more airports in respect of all export
goods and to 14 more sea ports in respect
of specified import and export goods to
facilitate cargo clearance.

Indian Customs Single Window Project to

facilitate trade, to be implemented.

Exemption available for specified micro

insurance schemes expanded to cover all
life micro-insurance schemes where the sum
assured does not exceed Rs 50, 000 per life
insured.

For safe disposal of medical and clinical

wastes, services provided by common
biomedical waste treatment facilities

The scheme of Advance Ruling in indirect

taxes to be expanded to cover resident private
limited companies. The scope of Settlement
Commission to be enlarged to facilitate quick
dispute resolution.

Customs and Central Excise Acts to be

amended to expedite the process of disposal
of appeals.