Professional Documents
Culture Documents
EconomicSurvey2014 15
EconomicSurvey2014 15
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Fiscal Framework
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Private investment must remain the main engine of longrun growth. But in the short to medium term, public
investment, especially by the railways, will have to play
a catalytic role.
Banking is hobbled by policy, which creates double
financial repression, and by structural factors, which
impede competition. The solution lies in the 4 Ds of
deregulation (addressing the statutory liquidity ratio and
priority sector lending), differentiation (within the public
sector banks in relation to recapitalisation, shrinking
balance sheets and ownership), diversification (of source
of funding within and outside banking), and disinterring
(by improving exit mechanisms).
The Prime Ministers Skill India objective should be
accorded high priority along with, and indeed in order to
realise, Make in India.
India has taken a number of green actions. It can make a
positive contribution to the forthcoming Paris
negotiations on climate change.
Improving the status and treatment of women is a major
development challenge. Family planning targets and the
provision of incentives are leading to an undesirable
focus on female sterilisation. Family planning programme
should align with reproductive health rights of women.
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With 100 per cent FDI permitted in the Film Sector, India
is emerging as the new favourite of international studios.
Govt will discontinue support to eight centrallysponsored schemes, bringing their number down to 58.
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B. Station Redevelopment
Satellite Railway terminals will be developed in major
cities for decongesting the city as well as providing
service to passengers residing in suburbs.
C. Capacity Augmentation
While last-mile connectivity projects continue to be
accorded the highest priority, Govt intends to fast-track
the sanctioned works on 7,000 km of double/third/
fourth lines and commission 1200 km in 2015-16 at an
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D. Safety
All pending recommendations made by High Level Safety
Review Committee headed by Dr Kakodkar will be
examined by Apr 2015.
RDSO has been asked to develop a suitable device with
reliable power supply system based on theft-proof
panels/batteries in consultation with Indian Space
Research Organization, using geo-spatial technology
for providing audio-visual warning to road users at
unmanned level crossings.
A radio-based signal design project taken up with IIT
Kanpur for warnings at unmanned level crossing.
In 2015-16, 970 road overbridges/underbridges (ROB/
RUBs) and other safety-related works to eliminate 3,438
level crossings at a total Railway expense of `6,581 cr.
E. Technology upgradation
An innovation council called Kayakalp will be set up
for the purpose of business re-engineering and
introducing a spirit of innovation in Railways.
To mark the centenary celebrations of Banaras Hindu
University, Govt proposes to set up Malaviya Chair
for Railway Technology at IIT (BHU), Varanasi. This
Chair will help in development of new materials to be
used in all assets of Railways.
F. Partnerships for development
Foreign Rail Technology Cooperation scheme will be
launched in order to achieve the higher quality service
for our nation.
G.. Improvements to management processes and systems
Obtaining Rail Transport Clearance abolished.
EPC system of contracting all over Indian Railways.
Vendor Interface Management System .
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H. Resource mobilisation
The size of the Plan Budget has gone up by 52% from
`65,798 cr in 2014-15 to `1,00,011 cr in 2015-16. Support
from the Central Govt constitutes 41.6% of the total Plan
Budget and internal generation 17.8%.
A Financing Cell in the Railway Board, which would
seek the benefit of advice from experts in this field.
Govt is launching a Coastal Connectivity Program.
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I. Human Resources
J. Energy and sustainability
The annual consumption of fuel by the Railways is just
about 7% of the annual fuel consumption by the road
sector. The energy consumption is about 75%-90%
less and CO2 emission is about 80% less.
K. Transparency and governance initiatives
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The actions have not been confined to the core or macroeconomic areas alone. Action has been taken with regard
to allocation of natural resources; financial inclusion;
health and hygiene of the common man; girls and their
education; employment for the youth; improved and
non-adversarial tax administration; effective delivery of
benefits; investment and job creation; welfare of labour;
agricultural productivity and increasing farm incomes;
power; digital connectivity; skilling our youth; efficient
and better work culture in Govt; ease of doing business;
mainstreaming North Eastern States; and, reviving our
pride in the nation and culture.
Three achievements demonstrate the quality and
conviction of the Govt. One is the success of the Jan
Dhan Yojana. Financial inclusion has been talked about
for decades now. Who would have thought that in a
short period of 100 days, over 12.5 cr families could
have been brought into the financial mainstream? The
other is coal auctions. Earlier, the States only got benefits
of royalty. Now, by the transparent auction process, the
coal-bearing States will be getting several lakh of crores
of rupees which they can use for creation of long-awaited
community assets and for welfare of their people.
The third is Swachh Bharat, which has transformed into
a movement to regenerate India. For example, 50 lakh
toilets have already been constructed in 2014-15. Govt
will indeed attain the target of building six cr toilets. But,
Swachh Bharat is not only a programme of hygiene and
cleanliness but, at a deeper level, a programme for
preventive health care, and building awareness.
We are now embarked on two more game-changing
reforms. GST (Goods and Services Tax) and what the
Economic Survey has called the JAM Trinity Jan Dhan,
Aadhar and Mobile to implement direct transfer of
benefits. GST will put in place a state-of-the-art indirect
tax system by 1 Apr, 2016. The JAM Trinity will allow us
to transfer benefits in a leakage-proof, well-targeted and
cashless manner.
One of the major achievements of this Govt has been to
conquer inflation. This decline represents a structural
shift. Going forward, CPI inflation is expected to remain
at close to 5% by the end of the year. This will allow for
further easing of monetary policy.
To ensure that the victory over inflation is
institutionalised and hence continues, a Monetary Policy
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Fiscal Roadmap
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Agriculture
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Good Governance
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Infrastructure
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Financial Markets
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Monetising Gold
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Investment
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Green India
Govt is launching a Scheme for Faster Adoption and
Manufacturing of Electric Vehicles (FAME). It is
proposing an initial outlay of `75 cr for this Scheme in
2015-16. The Ministry of New Renewable Energy has
revised its target of renewable energy capacity to
1,75,000 MW till 2022, comprising 100,000 MW Solar,
60,000 MW Wind, 10,000 MW Biomass and 5000 MW
Small Hydro.
Malfeasance in public procurement can perhaps be
contained by having a procurement law and an
institutional structure consistent with the UNCITRAL
model.
On the other hand, disputes arising in public contracts
take long to resolve, and the process is very costly too.
Govt proposes to introduce a Public Contracts
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Tourism
Skill India
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Digital India
Others
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Budget Estimates
Tax Proposals
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facility.
The present taxation structure has an inbuilt incentive
for fund managers to operate from offshore locations.
To encourage such offshore fund managers to relocate
to India, Govt proposes to modify the Permanent
Establishment (PE) norms to the effect that mere
presence of a fund manager in India would not constitute
PE of the offshore funds resulting in adverse tax
consequences.
Implementation of the General Anti Avoidance Rule
(GAAR) has been a matter of public debate. It has
therefore been decided to defer the applicability of GAAR
by two years. Further, it has also been decided that when
implemented, GAAR would apply prospectively to
investments made on or after 01.04.2017.
To facilitate technology inflow to small businesses at
low costs, Govt proposes to reduce the rate of income
tax on royalty and fees for technical services from 25%
to 10%.
To generate greater employment opportunities, it is
proposed to extend the benefit of deduction for
employment of new regular workmen to all business
entities. The eligibility threshold of minimum 100 regular
workmen is being reduced to fifty.
In indirect taxes, Govt proposes to reduce the rates of
basic customs duty on certain inputs, raw materials,
intermediates and components (in all 22 items) so as to
minimise the impact of duty inversion and reduce the
manufacturing cost in several sectors. Some other
changes address the problem of CENVAT credit
accumulation due to the levy of SAD. Govt proposes to
fully exempt all goods, except populated printed circuit
boards for use in manufacture of ITA-bound items from
SAD and reduce the SAD on imports of certain other
inputs and raw materials subject to actual user condition.
The total wealth tax collection in the country was `1,008
cr in 2013-14. Should a tax which leads to high cost of
collection and a low yield be continued or should it be
replaced with a low-cost and higher-yield tax? The rich
and wealthy must pay more tax than the less affluent
ones. Govt has therefore decided to abolish the wealth
tax and replace it with an additional surcharge of 2%
on the super-rich with a taxable income of over `1 cr.
This will lead to tax simplification and enable the
Department to focus more on ensuring tax compliance
and widening the tax base. As against a tax sacrifice of
`1,008 cr, through these measures the Department would
be collecting about `9,000 cr from the 2% additional
surcharge.
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Budget at a glance
Taxation
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Defence
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Banking
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TYPES OF BUDGET
Balanced Budget
2. Revenue Deficit
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Budget
Unbalanced Budget
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3. Fiscal Deficit
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TYPES OF DEFICIT
1. Budget Deficit
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