A Platform for quantum leap - Ventura Securities Ltd

The Union Budget 2015-16 proposals presented by FM Arun Jaitley,

builds on the road map of holistic growth presented in the previous

year’s Budget. Recognizing that incremental growth will not lead

to any kind of amelioration plaguing the Indian Economy, the FM

has undertaken measures which are both, bold and revolutionary.

The challenging circumstances of last year viz high energy prices,

consequently higher inflation, fiscal & current account deficits

have inverted into opportunities. This has provided the FM with

adequate leeway to go ahead with bold measures and re-energize

the economy to a 8%+ growth trajectory (with possibility of even

double digit growth in the coming years).

In our opinion this budget lays out the platform for a quantum

moonshot leap as envisioned by our PM Narendra Modi to take

India to a $20 trillion economy from the current $2 trillion.

Union Budget 2015-16

A Platform for quantum leap

Kuch to phool khilaye humne, aur kuch phool khilane hai

Mushkil yeh hai bag me ab tak, kaante kai purane hai

Several measures have been laid out in this budget in bringing to

fruition this aspiration through accelerating growth, enhancing

investment and benefiting each individual through improvement in the

quality of life.

Some of the game changing measures are :

1. Paving the roll out for GST.

2. JAM Trinity catering towards direct transfer of benefits which is

cashless, well targeted and leak proof.

3. Make in India targeted towards enhancing manufacturing industry

which should lead to job creation. In particular defense to be the

cynosure of this Make in India which would lead to self reliance in

defense, conservation of valuable forex reserves and boost

exports.

4. NBFCs with net worth greater than Rs 500 crore to be covered

under the SARFESI act. This should lead to faster recovery of

NPAs.



Growth in 2015-16 is expected to be between 8 to 8.5%. Aiming for a

double-digit rate seems feasible very soon.

5. Boost infrastructure : For this several initiatives have been

undertaken viz

• increasing outlays on Roads and Railways.

• Plug and play a revolutionary concept for UMPPS which should

spear head growth and boost confidence. If successful this

would be replicated across various infra segments.

• Thrust on renewable Energy

• Focus on startup business

• Easy Business Policy which will facilitate 14 regulatory

approvals at one source

6. Gold Monetization

7. Several initiatives to unearth black money and discourage black

money activities.

8. Digital India to take the country to the next level of growth.

9. Deferment of GAAR to 2017 and implementation on prospective

basis.



It is quite obvious that incremental change is not going to take us

anywhere. We have to think in terms of a quantum jump.

10. Enhancing deductions on Personal Tax for the middle class

which should help spur long term savings. Total maximum

deductions that one can avail is to the extent of Rs 4.44 lac.

11. Innovative Social Security measures especially for the poor and

under privileged utilizing the Jan Dhan platform.

12. Corporate Tax to be reduced in a phased manner to 25% over 4

years. This should improve profitability and kick start investments

and job creation.

13. Funding the unfunded should significantly help the bottom-of-

the-pyramid enterprises / MSMEs with a refinance facility and

provide an avenue for first generation entrepreneurs to boost

business. MUDRA and TReDS are unique institutions / products

envisioned by the Modi government for achieving its objective.



Domestic and international investors are seeing us with renewed

interest and hope.

5.7%

4.8%

4.4%4.1% 4.1% 3.9%

3.5%

3.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2011-12 2012-13 2013-14 2014-15BE 2014-15RE 2015-16BE 2016-17BE 2017-18BE

As % of GDP

Roadmap to a more realistic fiscal deficit target

Fiscal Deficit

Higher devolution to States requires extension of time frame

Rushing into, or insisting on, a pre-set time-table for fiscal consolidation pro-

cyclically would, in my opinion, not be pro-growth.

Subsidies : Focus on minimizing leakages

Subsidies

Direct Benefit Transfer to the aid

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

10000

60000

110000

160000

210000

260000

2010-11 2011-12 2012-13 2013-14 2014-15BE 2014-15RE 2015-16BE

` Crore

Food Fertilizers Petroleum Interest and Others Subsidies as a % of GDP (RHS)

Who would have thought that in a short period of 100 days, over 12.5 crore families

could have been brought into the financial mainstream?

Interest Payments

Interest Payments

Still a wall of worry

2.5%

2.6%

2.7%

2.8%

2.9%

3.0%

3.1%

3.2%

3.3%

3.4%

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

2010-11 2011-12 2012-13 2013-14 2014-15BE 2014-15RE 2015-16BE

` Crore

Int. Payment and Debt Servicing (LHS) Interest Payment as a %of GDP (RHS)

My government still remains firm on achieving the medium term target of 3% of GDP.

But that journey has to take account of the need to increase public investment.

Plan Expenditure

Plan Expenditure

Higher devolution to aid State finances

0

100000

200000

300000

400000

500000

600000

700000

2010-11 2011-12 2012-13 2013-14 2014-15BE 2014-15RE 2015-16BE

` Crore

RE- State Plan RE- Central Plan CE- State Plan

CE- Central Plan Total Plan Expenditure Revenue Expenditure (RE)

We have devolved a 42% share of the divisible pool of taxes ….. this is an

unprecedented increase which would empower states with more resources.

Non Plan Expenditure : Up on Defense Spending

Non Plan Expenditure

However thrust on Make in India

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2011-12 2012-13 2013-14 2014-15BE 2014-15RE 2015-16BE

` Crore

RE - Int Payment & Debt Servicing RE- Defence

RE- Subsidies RE Others

Capital Expenditure CE- Loan and Advances to State, UT

CE- Defence Total Non-Plan Expenditure

Revenue Expenditure (RE) CE- Others

Defence of every square inch of our mother land comes before anything else.

Corporation Tax to be lowered to 25% over 4 years

Budgetary Measures

Abolition of WT but additional cess @2% income > 1cr

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2011-12 2012-13 2013-14 2014-15BE 2014-15RE 2015-16BE

` Crore

Corporation tax Income tax Wealth Tax Customs

Union Excise Duties Service Tax Taxes of the Union Direct

Indirect Total

Taxation is an instrument of social and economic engineering.

Direct Tax : Corporate Tax reduction

However, surcharge conundrum nullifies impact

•There is a reduction in the rate of Corporate Tax from 30% to 25%

over the next 4 years however there will be removal of various kinds

of tax exemptions and incentives.

•Surcharge in the case of domestic companies having income

exceeding ` 1 crore and upto ` 10 crore is proposed to be levied @

7% and surcharge @ 12% is proposed to be levied on domestic

companies having income exceeding ` 10 crore. Status quo

maintained in case of foreign companies @ 2% & 5% respectively.

•This will lead to higher level of investment, higher growth and more

jobs and will release government from regime of exemptions which

has led to pressure groups, litigation and loss of revenue.

Measures

We lose out on both counts, i.e. we are considered as having a high Corporate

Tax regime but we do not get that tax due to excessive exemptions.

Impact

Details of tax benefits to individuals :-

Deduction u/s 80C `1,50,000

Deduction u/s 80CCD ` 50,000

Deduction on account of interest on house property loan

(Self occupied property) `2,00,000

Deduction u/s 80D on health insurance premium ` 25,000

Exemption of transport allowance ` 19,200

Total `4,44,200

•No changes in tax slabs for individuals & HUFs and 80C limit is also maintained. Transport allowance exemption is being increased from `800 to `1,600 per month.

•Wealth tax is being abolished and replaced with an additional surcharge of 2% on the super-rich with a taxable income of over `1 crore.

Tax Benefits to Individuals

Measures

Direct Tax : Individuals/HUF

Enhancement of deductions

As against a tax sacrifice of `1,008 crore from wealth tax the Department would

be collecting about `9,000 crore from the 2% additional surcharge.

Direct Tax : Other measures

Streamlining tax structures for various instruments

•Tax ‘pass through’ is allowed to both Category-I and Category-II

Alternative Investment Funds, so that tax is directly levied on the

investors in these Funds and not on the Funds.

•Pass through facility to be given to REITs and InvITs to revive

construction activity.

Measures

•Reduction in the rate of income tax on royalty and fees for technical

services from 25% to 10%. Positive for small businesses and young

entrepreneurs as they will be getting the latest technology at low

cost.

•The threshold limit for domestic transfer pricing cases is increased

from `5 crore to `20 crore.

A large quantum of funds is locked up in various completed projects which need to

be released to facilitate new infrastructure projects to take off.

Direct Tax : Other measures

Relief for small enterprises on the offering

•GAAR implementation deferred for two years and will apply

prospective from 1.04.2017

Measures (Cont….)

•This will mobilise higher resources and make higher investments in

SME, infrastructure and social projects and provide the much

required private equity to new ventures and start-ups.

Impact

GAAR implementation has been a matter of public debate. The investment sentiment

in the country has now turned positive and we need to accelerate this momentum.

Indirect Tax : Excise Duty & Service Tax

Reduction in basic excise duty helps in cost reduction

•The general rate of Central Excise Duty of 12.36% inclusive of all cess

is being increased to 12.5%.

•The rates of basic customs duty on certain inputs, raw materials,

intermediates and components (in all 22 items) is being reduced.

•Special Additional Duty is fully exempt on all goods, except populated

printed circuit boards, and reduction in SAD on imports of certain

other inputs and raw materials.

Measures

The reduction of Basic Excise Duty will minimise the impact of duty

inversion and reduce the manufacturing cost in several sectors.

Impact

As part of the movement towards GST, I propose to subsume the Education Cess

and the Secondary and Higher Education Cess in Central Excise duty.

Indirect Tax : Other measures

Funding of initiatives through additional cess

•Service tax along with education cess is increased from 12.36% to a

consolidated rate of 14%.

•Clean Energy Cess from `100 to `200 per metric tonne of coal will be

levied from FY15-16 and Excise duty on sacks and bags of polymers of

ethylene other than for industrial use is being increased from 12% to

15%.

•Conversion of existing excise duty on petrol and diesel to the extent

of `4 per litre into Road Cess to fund investment in roads and other

infrastructure.

•Service tax exemption is being extended to certain pre cold storage

services in relation to fruits and vegetables.

Measures

With the help of road cess an additional sum of ` 40,000 crore will be

made available to infrastructure sector and energy cess will help in

financing clean environment initiatives.

Impact

Introduction of GST is eagerly awaited by Trade and Industry. To facilitate

a smooth transition to levy of tax on services it is proposed to increase service tax.

Measures

• Implementation of Goods and Service Tax Act likely from 1st April,

2016.

• It is also proposed to exempt services by common affluent

treatment plants from service tax.

•Exemption is being extended to certain pre cold storage services

in relation to fruits and vegetables.

•Time limit for taking CENVAT Credit on input services is being

increased from six months to one year.

Structural changes for Service Industry

Higher Tax revenue eyed from service sector

We are moving in various fronts to implement GST from the next year

Impact

•GST will add optimism to the economy by developing a common

Indian market and reducing the cascading effect on the cost of

goods and services.

Amendments

•To facilitate a smooth transition to levy of tax on services by both

the Centre and the States, it is proposed to increase the present

rate of service tax plus education cess from 12.36% to a

consolidated rate of 14%.

• It is also proposed to have an enabling provision to levy Swachh

Bharat Cess at a rate of 2% or less on all or certain services if

need arises.

•The Negative List under service tax is being slightly pruned and

certain other exemptions are being withdrawn to widen the tax

base.

•Service tax to be levied on the service provided by way of access

to amusement facility such as rides, bowling alleys, amusement

arcades, water parks, theme parks, etc.



GST is expected to play a transformative role in the way our economy functions.

Amendments

•Service tax to be levied on service by way of carrying out any

processes as job work for production or manufacture of alcoholic

liquor for human consumption.

•An enabling provision is being made to exclude all services

provided by the Government or local authority to a business

entity from the Negative List.



View

•Companies likely to get disadvantaged - Wonderla Holidays,

United Spirits, Radico Khaitan

•Companies likely to benefit because on implementation of GST

Concor, Gati, Allcargo, Snowman

These measures will cut down lot of paper work and red tape.

Significant changes for NBFCs

Parity with other Financial institutions

Measures

•NBFCs registered with RBI and having asset size of `500 crore

and above will be considered for notifications as ‘Financial

Institution’ in terms of the SARFAESI Act, 2002.

• It will expedite the loan recovery process and help contain bad

debt in the system.

•Earlier, to recover loans it used to take 2-2.5 years as legal

processes took long time. This move will accelerate the recovery

process and will bring down the NPA recovery time to 6-8 months

Bring parity in regulation of Non-Banking Financial Companies (NBFCs)

Impact

View

•Companies likely to benefit L&T Hsg Finance, M&M Financial,

Shriram Transport, Shriram City Unoin.

Focus on financial inclusion

Measures

•Government proposes to utilize the vast Postal network with

nearly 1,54,000 points of presence spread across the villages of

the country to make its proposed Payments Bank venture

successful .

• In order to improve the Governance of Public Sector banks, the

Government intends to set up an autonomous bank Board

Bureau.

•The first phase of GIFT (Gujarat International Finance Tec-City) to

become a reality very soon. Appropriate regulations to be issued

in March.

Banking & Finance

We are banking the un-banked

Banking & Finance

Focus on financial inclusion

Impact

•Will achieve the objective of Financial inclusion as vast network of

Indian Post will connect the remote population living in the Rural

India to Banking system.

•More people can go for Health Insurance when given an option

between ESI and Insurance.

•Better Governance will help PSBs in developing differentiated

strategies and capital raising plans through innovative financial

methods and instruments

Creating a universal social security system for all Indians, specially the poor and

the under-privileged.

Emphasis on better infrastructure for agriculture.

Measures

•Major steps taken to address the two major factors critical to

agricultural production, that of soil and water.

•Organic farming scheme ‘Paramparagat Krishi Vikas Yojana’ to be

fully supported.

•5,300 crore to support micro-irrigation, watershed development

and the ‘Pradhan Mantri Krishi Sinchai Yojana’. States urged to

extend necessary support.

•25,000 crore in 2015-16 to the corpus of Rural Infrastructure

Development Fund (RIDF) set up in NABARD.

•15,000 crore for Long Term Rural Credit Fund

•45,000 crore for Short Term Co-operative Rural Credit Refinance

Fund; and

•15,000 crore for Short Term RRB Refinance Fund.

Agriculture: Boost to Agriculture Sector

Support the agriculture sector with the help of effective and hassle-free

agriculture credit


Impact

•The Pradhanmantri Gram Sinchai Yojana is aimed at irrigating the

field of every farmer and improving water use efficiency to

provide `Per Drop More Crop’.

• ‘Paramparagat Krishi Vikas Yojana’ will improve soil health and

fertility on a sustainable basis.

•Creation of Unified National Agriculture Market will help the

farmers to get better realizations for their produce.

•Easy availability of farm credit.

Boost to Agriculture Sector

‘Per Drop, More Crop’


Measures

•Target of 8.5 lakh crore of agricultural credit during the year 2015-

16 for which support of bank is sought.

•Transportation of agricultural produce to remain exempt from

Service-tax.

•Unified National Agriculture Market will be created in consultation

with States and NITI.

Boost to Agriculture Sector

View

•Support to irrigation will benefit Jain Irrigation, Aries Agro

Our commitment to farmers runs deep

Measures

•With FDI in Defence already permitted, objective is to encourage

‘Make in India’ concept amongst the manufacturers of defence

equipments, not only for domestic purpose, but also for export.

•Greater transparency to be brought in Defense equipment

purchasing decision

• It will boost domestic manufacturing of Defence equipments and

achieve greater self-sufficiency in the area of defence equipment,

including aircraft.

•Budget allocation for Defence sector stands at Rs.2,46,727

crores.

Self sufficiency in Defence aimed

Emphasis on ‘Make in India’ and transparency

•Companies likely to benefit Bharat Electronics, L&T, Pipavav

Defence, Astra Microwave, M&M

Defence of every square inch of our mother land comes before anything else.

Impact

View

Measures

•Plans to revamp major heritage sites by restoration of sites,

including landscape restoration; signage and interpretation

centres; parking; access for the differently abled; visitors’

amenities, including securities and toilets.

•Provision of resources to start working on 9 sites to bring it to

the level of World Cultural Sites.

•After the success of VISAS on arrival issued to travelers of 43

countries, proposal to increase the countries covered to 150, in

stages.

Tourism

Greater revenues targeted

View

•Companies likely to benefit Thomas Cook, Cox & Kings, Tourism

Finance

While India has 25 (twenty five) Cultural World Heritage Sites these facilities are

still deficient and require restoration

Industrial Development

Infrastructure bottleneck eliminated

Measures

•DMIC corridors: the Ahmedabad-Dhaulera Investment Region in

Gujarat, and the Shendra–Bidkin Industrial Park near Aurangabad,

in Maharashtra, are now in a position to start work on basic

infrastructure

•For the same purpose, initial sum of Rs. 1,200 crore have been

earmarked which will be gradually increased as the pace of

expenditure picks up.

•The National Optical Fibre Network Programme (NOFNP) of 7.5

lakhs kms. to be further speeded up by allowing willing states to

execute on reimbursement of cost basis.

GIFT in Gujarat was envisaged as International Finance Centre that would

actually become as good an International Finance Centre as Singapore

Amendments

Reduction in duty of following items:

•C- Block for Compressor, Over Load Protector (OLP) & Positive

thermal co-efficient and Crank Shaft for compressor, for use in the

manufacture of Refrigerator compressors.

•Parts and components of Digital Still Image Video Camera

•Black Light Unit Module for use in the manufacture of LCD/LED TV

panels from 10% to Nil.

•Organic LED (OLED) TV panels from 10% to Nil.

Consumer Durables

LEDs enjoy duty cuts.

View

•Lloyd Electrc & Engineering, Godrej Industries, Whirpool of India

The concessions from duties are being extended by one more year i.e. up

to 31.3.2016.

Power and Energy : Emphasis on Clean Energy

, Law for resolution of disputes

• Targeting capacity revision of renewable energy to 1,75,999 MW till

2022, comprising of 1,00,000 MW Solar, 60,000 MW Wind, 10,000 MW

Biomass and 5,000 MW Small Hydro.

• Launching a scheme for faster adoption and manufacturing

Electronic Vehicles.

• Transparent Coal Block Auctions to augment resources to states.

• Ambition of provision of basic facility of 24*7 power to rural areas.

• Containment in malfeasance in public procurement by having a

procurement law consistent with UNCITRAL model.

• Introduction of Public Contracts (Resolution of disputes) Bill to

streamline the institutional arrangements for resolution of disputes

arising in public contracts which take long to resolve.

Measures

With regard to coal, there is a need to find a balance between taxing

pollution, and the price of power.

Power and Energy

Emphasis on Clean Energy, Law for resolution of disputes

• Balance of 50% of additional depreciation @20% for new plant and

machinery installed and used for less than 6 months by a

manufacturing unit or a unit engaged in generation and distribution

of power is to be allowed immediately next year.

• Increase in clean Energy cess from Rs. 100 to Rs. 200 per metric

tonne of coal.

• Concessions on custom and excise duty levied on electrically

operated vehicles and hybrid vehicles up to 31-03-2016.

Measures

View

Companies in the business of power generation like Suzlon, Swelect

Energy may majorly benefit from the same.

I believe, Parliament needs to take a view soon on whether we need a

procurement law, and if so, what shape it should take.

Public Healthcare and Sanitation

Swachh Bharat, Tax Benefits, Set up of Institutions

• 100% Deductions allowed other than by way of CSR for

contributions to Swachh Bharat Kosh and Clean Ganga Fund.

• Services by common affluent plants exempt from service tax.

• Levying of additional Swachh Bharat cess rate of up to 2% on all

services if the need arises.

• Construction of 50 lakh toilets in the last fiscal while going ahead

comfortably with its target of 6 crore toilets.

Measures

The fourth pillar of my taxation proposals this year therefore relates to

initiatives for the Swachh Bharat Abhiyan.



• Limits for deduction allowable for expenses of health insurance

premium increased from Rs. 15,000 to Rs. 25,000. for senior citizens

from Rs. 20,000 to Rs. 30,000.

• For Citizens above 80 years of age deduction of Rs. 30,000 directly

towards medical expenditures.

• Deduction limit enhanced from Rs. 60,000 to Rs. 80,000 for a senior

citizen with a specified disease of serious nature.

• Additional deduction of Rs. 25,000 allowed to differently abled

persons.

• Donation made to national Fund for controlling of Drug Abuse

(NCFDA) to be eligible for 100% deduction u/s 80G of Income Tax

Act.

Measures

The fifth pillar of my taxation proposals this year is extension of benefits to

middle class tax payers



Impact

The government had recognized the impact of the inflationary

pressure on the medical costs that had affected the common man

by and large. The government with the much-needed changes has

provided a relief via increase in the deductable limits, thereby

taking away some burden from its people.

View

Companies in the business of healthcare and sanitaryware like Apollo

Hospitals, Max India, Hindustan Sanitaryware, Cera Sanitaryware may

majorly benefit from such activities.

We look forward to Improve quality of life and public health through

Swachh Bharat initiatives

Education and Employment

Skill India Programme – a Combined Initiative

• Deen Dayal Upadhyay Gramin Kaushal Yojana (for which Rs. 1500

crores has been set apart) is initiated to enhance employability of

rural youth.

• A student Financial Aid Authority established to administer and

monitor the front-end all scholarship as well as Educational Loan

Schemes through Pradhan Mantri Vidya Lakshmi Karyakram.

• An IIT to be set up in Karnataka and Indian School of Mines to

upgraded to a full-fledged IIT. Set up of AIIMS at J&K, Punjab, Tamil

Nadu, Himachal Pradesh and Assam. IIMs to be setup in J&K and

Andhra Pradesh. A post graduate institute of Horticulture Research

& Education to be set up in Amritsar.

• Setting up of 3 new National institute of Pharmaceuticals Education

and Research in Maharashtra, Rajasthan and Chhatisgarh and 1

institute of Science and Education Research is to be set up in

Nagaland and Odisha each.

Measures

We also have to ensure that education improves in terms of quality and

learning outcomes

Manufacturing

Make In India, Act East Policy, Tax benefits

• Initiating Make in India and Skill India programs to make India a

manufacturing hub.

• A project development company under the ‘Act East’ policy of the

Govt. of India to be established to facilitate setting up

manufacturing hubs in CMLV countries, namely Cambodia,

Myanmar, Laos and Vietnam through its SPVs facilitating the PPP

model.

Impact

Our Government has already permitted FDI in defence so that the

government entities also become manufacturers of defence equipments.

Manufacturing

Make In India, Tax benefits

• Additional investment allowance (@15%) and additional

depreciation (@35%) for new manufacturing set up during period

01-04-2015 to 31-03-2020 in notified backward areas of Andhra

Pradesh and Telangana to be allowed.

• Basic customs duty on certain inputs, raw materials, intermediates

and components in 22 items, reduced to minimise the impact of

duty inversion.

• All goods, except populated printed circuit boards for muse in

manufacture of ITA bound items, have been exempted from SAD.

• SAD on import of certain inputs and raw materials to be reduced.

• Excise Duty on chassis for ambulance to be reduced from 24% to

12.5%.

Measures

The Make in India programme is aimed at meeting the challenge of

manufacturing, thus creating jobs.

Manufacturing

Make In India, Tax benefits

• Excise duty on levy of cigarettes and the compounded levy scheme

applicable to pan masala, guthka and other tobacco products also

changed.

• Excise duty on cigarette exceeding 65 mm increased by 15% and

for others the duty is increased by 25%

• Excise duty on footwear with leather uppers and having retail price

of more than Rs. 1000 per pair reduced to 6%.

• Time Limit for taking CENVAT credit on inputs and input services

increased from 6 months to 1 year.

• Concessions on custom and excise duty available to electricity

operated vehicles and hybrid vehicles extended up to 31.03.2016.

Measures

View

To ensure that our young get proper jobs, we have to aim to make India

the manufacturing hub of the world.

The major companies that may benefit from these reforms are Bata

Footwear, Liberty Footwear, Relaxo. ITC to be disadvantaged.

Infrastructure Monetary allocations, Robust Initiatives

• National Investment and Infrastructure Fund, to be established with

an annual flow of Rs. 20,000 crores.

• An expert committee to examine the possibility and prepare a draft

legislation where the need for multiple prior permission can be

replaced by a pre-existing regulatory mechanism.

Measures

• Sharp increase in outlays of roads and railways. Capital

Expenditure of public sector also set to increase.

• Issuance of tax free infrastructure bonds for the projects in the rail,

road and irrigation sectors.

• PPP model for infrastructure development to be revisited and

revitalised.

• Ports in public sector will be encouraged, to corporatize and

become companies under Companies Act to attract investment and

leverage the huge land resources.

With private investment in infrastructure via the PPP model still weak,

public investment needs to step in, to catalyse investment.

Infrastructure

Plug and Play: The new blue eyed boy

• The government has proposed to to set up 5 new Ultra Mega power

projects each of 4000 MW in the plug and play mode, highlights

being that all clearances will be pre approved before the auction.

• The Government could also consider similar plug-and-play projects

in other infrastructure projects such as roads, ports, rail lines,

airports etc. Also the second unit of Kudankulam Nuclear Power

Station will be commissioned in 2015-16.

View

The major companies that may benefit from these reforms are Adani

Group, Gammon Group, GMR Group, IRB Infra, Sadbhav Engineering,

Titagarh Wagons, Texmaco Rail & Engg.

There is a need to tackle the lack of common approach in the regulatory

arrangements prevailing within the different sectors of infrastructure.

Measures

Alternative Investments

Foreign Investments, REITs and InvITs

• Foreign Investment is slated to be allowed in Alternative Investments.

• Capital Gains Income for the sponsors exiting at the time of listing of

the REITs and InvITs is set to be rationalised.

• Rental income of REITs from their own assets will have the pass

through facility.

• Permanent Establishment norm of the REITs and InvITs to be

modified to encourage fund managers to relocate to India.

• Development of gold bonds carrying fixed rate of interest, with

redeemable cash term amounting to face value of gold

Measures

A large quantum of funds are locked up in various completed projects

which need to be released to facilitate new infrastructure projects to

take off. Looking at REITs as one of the crucial ways to unlock the

same, easing norms for these funds would garner more investment

activity in these trusts. As an alternative for metal purchase of gold

bonds, imports and consumption of gold is set to decrease.

View

REITs and collective investment vehicles have an important role to revive

construction activity.

Black Money Full throttle efforts to bring back black money

MEASURES

•Now that majority of Indians have a RUPAY debit card, several

measures will be introduced to incentivize cashless transactions

•New law proposed on Black Money which spells out:

Rigorous imprisonment for concealment of assets/income

and non-fillings of returns, such offences to be made a

predicate offence under the Prevention of Money Laundering

Act 2002

Income from undisclosed foreign assets to be taxed at

maximum marginal rate, beneficial owner to also file returns

Amendments to FEMA to enable confiscation of foreign

assets in the event of non-compliance with the act

Tracking down and bringing back wealth which legitimately belongs to the

country is our abiding commitment to the country

Black Money Steps taken to curb black money

MEASURES

•Benami Transactions (Prohibition) Bill to be introduced; this law

will enable confiscation of benami property which will prevent

parking of black money in areas such as real estate

• Income Tax Act to be amended to prohibit payment of an advance

exceeding `20,000 in cash for purchase of immovable property

•PAN details made mandatory for transactions above `1 Lakh

•Third party entities to furnish information on foreign currency

sales and cross border transactions

•CBDT and CBEC to have access to each other’s database

A very important dimension to our tax administration is the fight against the

scourge of black money

IMPACT Recovery of legitimate money will provide an additional source to

fund the government’s growth plans and help lower deficit concerns

Ease of Business

‘Make In India’ boost by facilitating quick clearances

MEASURES

•Launched E-Biz portal which integrates 14 regulatory permissions

at one source

•To bring in a comprehensive Bankruptcy Code in 2015-16 which

will provide the necessary judiciary capacity replacing SICA and

BIFR

•Proposal to set up a committee to prepare a draft legislation which

will do away with the need of multiple prior permissions

• Introduce a Public Contracts (Resolution of Disputes) Bill to

streamline the resolution of disputes in public contracts

•Proposal to set up exclusive commercial divisions in various

courts to facilitate quick resolution of commercial disputes

Bankruptcy law reform, that brings about legal certainty and speed, has been

identified as a key priority for improving the ease of doing business

Ease of Business

‘Make In India’ boost by facilitating quick clearances

MEASURES

•Online central excise and service tax registration to be completed

in two working days, electronic records to be maintained and

digitally signed invoices to be issued

• Subsidies to be rationalized through direct transfer of benefits

Minimum government and maximum governance to improve the ease of doing

business

IMPACT

Steps taken in the right direction to remove red tapism and bureaucratic

hurdles -- the biggest bottlenecks to the government’s ‘Make In India’

mission; will help revive fresh investments in the economy

Social Security

All round reforms – insurance, pension, and financial inclusion

INSURANCE

•Pradhan Mantri Suraksha Bima Yojna will cover accidental death

risk of `2 lakh for a premium of just `12 per year

•Pradhan Mantri Jeevan Jyoti Bima Yojana will provide cover worth

`2 lakhs for both natural and accidental death risk; premium will be

`330 per year, for the age group 18-50

I propose to work towards creating a universal social security system for all

Indians, specially the poor and the under-privileged

PENSION

•Atal Pension Yojana to provide a defined pension, depending on

the contribution, and its period

•Government will contribute 50% of the beneficiaries’ premium

limited to `1,000 each year, for five years, in the new accounts

opened before 31st December, 2015

Social Security

Senior Citizens’ welfare given prime importance

SENIOR CITIZENS’ REFORM

•New scheme providing Physical Aids and Assisted Living Devices to

senior citizens below poverty line

•Creation of a Senior Citizen Welfare Fund for appropriation of

unclaimed EPF and PPF amounts worth `3000 crore

• Health insurance premium deductions limit increased for senior

citizens and very senior citizens

•Service tax to be exempted on Varishta Bima Yojana for senior

citizens

Special regard needs to be paid to senior citizens , the population of which is

~10.5 crore, out of which over one crore are above the age of 80 years

PENSION

•Deduction limit on contribution to Pension Fund increased from `1 to `1.5

lakh

• Additional deduction of `50,000 for contribution to the New Pension Scheme

under 80CCD

Social Security

Women safety and chid education continue to be top priority

My Government is committed to safety and security of women

WOMEN, CHILD & MINORITIES

ALLOCATIONS

SC `30,851 crore

ST `19,980 crore

Women `79,258 crore

Nirbhaya Fund `1,000 crore

Ministry of Minority Affairs `3,738 crore

• Integrated education and livelihood scheme called ‘Nai Manzil’ to be

launched this year to enable Minority Youth who do not have a

formal school-leaving certificate

IMPACT

Insurance and Pension schemes to provide the much needed social security

which in turn can enhance savings and improve standard of living

Employment Generation & Entrepreneurship

Boost to job creation given our rich demographics

Less than 5% of our potential workforce gets formal skill training to be

employable and stay employable.

EMPLOYEMENT GENERATION

•Launched the Deen Dayal Upadhyay Gramin Kaushal Yojana with a

corpus of `1,500 crore to enhance the employability of rural youth

•To launch a National Skills Mission which will consolidate skill

initiatives across several Ministries

•Extend benefit of deduction for employment of new workmen to all

business entities; eligibility of minimum 100 regular workmen is being

reduce to 50

• Focus on improving the quality and effectiveness of activities under

MGNREGA; initial allocation of `34,699 crore made

ENTREPRENEURSHIP

•Establish Atal Innovation Mission (AIM), an Innovation Promotion

Platform to boost entrepreneurship; `150 crore to be ear-marked

Employment Generation & Entrepreneurship

Boost to job creation given our rich demographics

We also have to encourage the spirit of entrepreneurship and support new

start-ups. Thus can our youth turn from being job-seekers, to job-creators

ENTREPRENEURSHIP

•Establish SETU (Self-Employment and Talent Utilisation) which will

be a Techno-Financial, Incubation and Facilitation Programme to

support start ups; `1,000 crore ear-marked

•To facilitate technology inflow to small businesses at low costs,

the income tax on royalty and fees for technical services has been

reduced from 25% to 10%

IMPACT

Job creation efforts can help mobilise the large youth population

that India boasts off towards productive activities thereby lifting the

overall economic growth; entrepreneurship efforts will spur fresh

investments

Capital Market Reforms & Investments

Boosting the Bond market & attracting investments

One vital factor in promoting investment in India is the deepening of the Bond

market, which we have to bring at the same level as our world class equity market.

CAPITAL MARKET REFORMS

•Set up a Public Debt Management Agency (PDMA) which will bring

India’s external borrowings & domestic debt under one roof

•Merge Forwards Markets Commission (FMC) with SEBI to

strengthen regulation of commodity forward markets and reduce

speculation

• Enhanced control on equity inflows by the Government in

consultation with the RBI

•Create a Task Force to establish a sector-neutral Financial

Redressal Agency which will address grievances against all

financial services providers

• Employees will be given the option to opt for either EPF or New

Pension Scheme; for employees below a certain threshold of

monthly income contribution to EPF to be optional

Capital Market Reforms Boosting the Bond market & strengthening regulation

The investment sentiment in the country has now turned positive and we need to

accelerate this momentum

MEASURES

•Employee to have the option of choosing either ESI or a Health

Insurance product, recognized by the IRDA

•Propose to do away with the distinction between different types of

foreign investments, especially between FPIs and FDI, and replace

them with composite caps

•Modify the Permanent Establishment (PE) norms to encourage

offshore fund managers to relocate to India

•MAT provisions for FIIs rationalised -- profits corresponding to their

income from capital gains on transactions in securities which are

liable to tax at a lower rate, shall not be subject to MAT

•Higher FII inflows as MAT ceiling removed and development of

bond market to provide additional investment avenues

IMPACT

Capital Market Reforms

Boosting the Bond market & strengthening regulation

Though stocks of gold in India are estimated to be over 20,000 tonnes, mostly this

gold is neither traded, nor monetized

Introduce a Gold Monetisation Scheme which will replace Gold

Deposit and Gold metal Loan schemes

•Scheme to allow depositors of gold to earn interest and

jewelers to obtain loans

•Banks/other dealers would also be able to monetize the gold

VIEW

Muthoot Finance and Manappuram Finance to benefit

MEASURES

Budget Summary

Nominal GDP to growth of 11.5%; Fiscal Deficit is aimed 3.9%

(` Crore) 2011-12 2012-13 2013-14BE 2013-14RE 2014-15BE 2014-15RE 2015-16BEChg BE

FY16/FY15

Chg FY15

RE/BE

Revenue Receipts 7,51,436 8,79,232 10,56,331 10,14,724 11,89,763 11,26,294 11,41,575 -4% -5%

Net Tax Revenue 6,29,764 7,41,877 8,84,078 8,15,854 9,77,258 9,08,463 9,19,842 -6% -7%

Non tax Revenue 1,21,671 1,37,354 1,72,252 1,98,870 2,12,505 2,17,832 2,21,733 4% 3%

Capital Receipts 5,68,918 5,31,139 6,08,967 5,63,894 5,87,968 5,70,535 6,23,861 6% -3%

Recoveries of receipts 18,850 15,060 10,654 12,497 10,527 10,886 10,753 2% 3%

Other Reciepts (Disinvestments) 18,088 25,890 55,814 29,368 63,425 31,350 69,500 10% -51%

Debt Reciepts 5,31,980 5,41,202 5,42,499 5,22,029 5,14,016 5,28,299 5,43,608 6% 3%

Total Receipts 13,20,354 14,10,371 16,65,298 15,78,618 17,77,732 16,96,829 17,65,436 -1% -5%

Non Plan Expenditure 8,91,991 9,96,745 11,09,974 11,06,119 12,19,891 12,13,224 13,12,200 8% -1%

Non Plan Revenue 8,12,049 9,14,304 9,92,907 10,19,039 11,14,609 11,21,897 12,06,027 8% 1%

Interest Payments 2,73,150 3,13,170 3,70,684 3,74,254 4,27,011 4,11,354 4,56,145 7% -4%

Non Plan Capital 79,941 82,441 1,17,067 87,080 1,05,282 91,327 1,06,173 1% -13%

Plan Expenditure 4,12,375 4,13,625 5,55,322 4,53,327 5,75,000 4,67,934 4,65,277 -19% -19%

Plan Revenue 3,33,737 3,29,208 4,43,260 3,52,732 4,53,503 3,66,883 3,30,020 -27% -19%

Plan Capital 78,638 84,417 1,12,062 1,00,595 1,21,497 1,01,051 1,35,257 11% -17%

Total Expenditure 13,04,366 14,10,370 16,65,296 15,59,447 17,94,891 16,81,158 17,77,477 -1% -6%

GDP Nominal 89,74,947 1,01,59,884 1,00,20,620 1,13,20,463 1,28,39,952 1,26,53,762 1,41,08,945 10% -1%

Gross Fiscal Deficit 5,15,990 4,90,597 5,42,499 5,02,858 5,31,177 5,12,628 5,55,649 5% -3%

Fiscal deficit as a % of GDP 5.7% 4.8% 5.4% 4.4% 4.1% 4.1% 3.9% -5% -2%

Revenue Deficit 3,94,348 3,65,896 3,79,838 3,57,048 3,78,349 3,62,486 3,94,471 4% -4%

Revenue deficit as a % of GDP 4.4% 3.6% 3.8% 3.2% 2.9% 2.9% 2.8% -5% -3%

Primary Deficit 2,42,840 1,77,428 1,71,815 1,28,604 1,04,166 1,01,274 99,504 -4% -3%

Primary deficit as a % of GDP 2.7% 1.7% 1.7% 1.1% 0.8% 0.8% 0.7%

People who urge us to undertake Big Bang Reforms, also say that the Indian

economy is a giant super tanker, or an elephant. An elephant moves slowly but surely.

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