Intellectual Thoughts by Sanjay Panda: Key Features of Indian Budget 2016- 2017

Key Features of Indian Budget 2016- 2017


o   Will not resort to retrospective taxation in future; one time tax dispute resolution proposed for retrospective taxation

o   To rationalise corporate tax for new manufacturing companies

o   To implement general anti avoidance tax rule from April 1, 2017

o   Security transaction tax on options raised to 0.05 percent

o   Proposes to levy infrastructure cess of 1-4 percent certain  models of cars  (1 % on small petrol, LPG, CNG cars, 2.5% on diesel  cars of certain capacity and 4% on other higher engine capacity vehicles

o   Raises factory gate tax on various tobacco products by 10-15 percent.

o   Proposes to abolish 13 different levies


o   100 percent foreign direct investment to be allowed in food processing industry

o   Promises further reforms in foreign direct investment policy in insurance, pension, asset recast companies


o   Total stake sales in 2016/17 seen at 565 billion rupees

o   To encourage central public enterprises to divest own assets for raising resources for new projects

o   Strategic divestment seen at 205 billion rupees


o   Fiscal deficit seen at 3.9 percent of GDP in 2015/16

o   Fiscal deficit seen at 3.5 percent of GDP in 2016/17

o   Plan expenditure seen at 5.5 trillion rupees in 2016/17

o   Proposes to set up panel to review fiscal responsibility management act


o   Rural jobs programme allocated 385 billion rupees ($5.61 billion) in 2016/17

o   Farmer welfare budget to total 359.84 billion rupees

o   Rural road development to get 190 billion rupees

o   Target of agriculture credit at 9 trillion rupees

o   Interest subvention towards farm loans at 150 billion rupees

o   To set up dedicated irrigation fund worth 200 billion core

o   Allocates 55 billion rupees for crop insurance programme for 2016/17


o   Bankruptcy code for financial firms to be introduced in parliament in 2016/17

o   RBI act is being amended for implementing monetary policy framework

o   To list general insurances companies on stock exchanges


o   Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required


o   Allocates 2.21 trillion rupees for infrastructure development for 2016/17

o   Allocation for roads and highways development at 550 billion rupees

o   Capital expenditure on roads and rail development at 2.18 trillion rupees

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