Decoding Indian Budget

Table of contents
The big picture

Roundup: Arun Jaitley does not disappoint. Union Budget 2015 is reformist
Budget 2015 sets stage for a new economic order, gives India chance to fly
Budget 2015: Lets leave carping for tomorrow , it is Jaitleys day today
No big bang reforms but budget 2015 goes for growth, investment
04
07
09
10
The commons man budget

From gold bonds to cheap LCD, LED TVs: 10 takeaways from Budget 2015 for
the aam aadmi
Budget 2015: Tablets, shoes to get cheaper but drinks, night outs to get expensive
Budget 2015 finds no middle class takers
Jaitleys tax gimmick: Budget 2015 results in tax benefit of only Rs 52,221,
not Rs 4.44 lakh
More deductions but no changes in tax slabs: What Union Budget 2015 offers
middle class
Budget 2015: Why cut corporate tax but not personal tax, Mr Jaitley?
Budget 2015 takeways: Eating out gets costlier as FM raises service tax to 14%
Misplaced priorities? Budget 2015 doesnt allow govt to take on spread of
diseases like swine flu
Budget 2015: Super rich senior citizens to take biggest hit
15
16
18
20
21
23
27
30
32
Macroeconomics and sector impact: Breaking it down

Budget 2015: The 4 measures announced by Jaitley that will be long remembered 35
Budget 2015 does nothing spectacular for the health of the economy
37
Budget 2015 has two game-changers that will make India a global financial hub 39
Budget 2015 low on big bang reforms; theres not much for housing
41
Budget 2015: Jaitley adds sparkle to gold, encourages buying and selling of
yellow metal
42
Union Budget 2015: Jaitley just unleashed a war on black money like never before 43
Union Budget 2015: Jaitley brings cheer for banks and NBFCs
45
Budget 2015: One time deviation from fiscal target is OK, Jaitley has no
excuses in 2016
46
Budget 2015: One time deviation from fiscal target is OK, Jaitley has no excuses
in 2016
48
Union Budget 2015: Jaitley dumps Rs 1,000 crore into Nirbhaya fund, but who
is going to use it?
49
Arun Jaitleys Budget 2015 is lukewarm to the green energy sector
51
Budget 2015: Jaitley puts focus on digital connectivity to drive rural growth
52
Budget 2015: Jaitley puts focus on digital connectivity to drive rural growth
53
Budget 2015: Real estate investment trusts will continue to be unattractive
54
Budget 2015: Two simple graphs explain how the govt spends every rupee
56
Why the FM is right in slowing the pace of fiscal consolidation
58
Analysed and annotated: Full text of FM Arun Jaitleys Union Budget 2015
speech
59
Budget 2015: Chidu is wrong to claim corporates are main gainers
61
Budget 2015: Draconian black money law wont work without one-time amnesty 63
Copyright 2012 Firstpost
The big picture
Roundup: Arun Jaitley does not disappoint.
Union Budget 2015 is reformist

R Jagannathan Mar 2, 2015
run Jaitley made up for his budget

washout of last year today. The Union
budget for 2015-16 is a very good effort
to reform, rejuvenate and revive the economy
to the extent any budget can do that. It brings
some fresh thinking and ideas to tax issues,
proposes strong measures to curb black money,
extends the social security net to the poor and
vulnerable, provides fresh funds for infrastructure, and above all emphasises the importance of entrepreneurship for growth and jobs.
follows the Economic Surveys path of creative

incrementalism. It does not set great store by
big bang reforms. Many key changes have been
announced to improve the ease of doing business, encourage entrepreneurship, expand tax
compliance, and improve the delivery of social
security benefits to the poor by reducing leakages, but the real impact of these changes will
be felt only after a year or two. In the long run
these changes may be more revolutionary than
the tax proposals pertaining to one year.
So what are the prime themes of budget 201516? I can see at least a dozen of them.
Last year the finance minister uttered all of

16,299 words in his budget speech and achieved
very little. This year, brevity has ensured more
content and quality in the budget speech. He
spoke 30 percent less (11,247 words), and
achieved more, even if a lot of what he said constituted only a vision and a path for the future
rather than something he can deliver in the
coming financial year.
Last year his speech was peppered with too
many references to small allocations for
schemes named after Sangh parivar icons
like Deendayal Upadhyaya and Syama Prasad
Mookerjee. There was little of this kind of pandering this time, with most schemes now bearing the generic Pradhan Mantri prefix.
Another hallmark of todays budget is that it
First, the budget has cleverly balanced the need

to push up public investment without straying from the road to fiscal consolidation. The
2012 roadmap drawn up by Jaitleys predecessor called for a reduction of the fiscal deficit to
3 percent by 2016-17. Jaitley has promised to
achieve this one year later. He has used a part
of this fiscal leeway to increase investments
in infrastructure. In 2015-16, the net increase
in public investment is said to be Rs 1,25,000
crore, including Rs 70,000 crore in capital outlays. This will boost growth when the money is
spent over the year.
Second, the budget completely rebalances
centre-state fiscal power in favour of the states,
in line with the report of the 14th Finance Commission. The commission had recommended
the transfer of 42 percent of gross central tax receipts to states, but the real devolution is much
larger Rs 1,82,000 crore more in 2015-16
compared to the year before. The finance minister said: The devolution to the states would be
of the order of Rs 5.24 lakh crore in 2015-16 as
against the devolution of Rs 3.38 lakh crore as
per the revised estimates of 2014-15." Another
Rs 3.04 lakh crore would be transferred by way
of grants and plan transfers. Thus, states will
spend about 62 percent of the total tax receipts
of the country. This rebalancing of fiscal reCopyright 2012 Firstpost
sources means that states, which have the larger

burden of implementation responsibilities, will
now have the money to do so. The centres fiscal
role will shrink relatively.
Third, this budget shifts more of the tax revenue
burden to indirect taxes and away from direct
taxes. Left economists may rant about this, saying the budget will favour the rich and businesses, but the key to higher direct tax compliance
is more reasonable rates. Moreover, companies
have the option of not investing in India if they
find tax rates lower elsewhere. Thus, Jaitley has
offered Rs 8,315 crore of direct tax concessions,
and raised Rs 23,383 crore from indirect taxes,
especially excise and service taxes. The service
tax rate is up to 14 percent from 12.36 percent
now and the exemptions reduced. Basic excise
duty is up from 12 percent to 12.5 percent. The
clean energy cess on coal is up from Rs 100
to Rs 200 a tonne. The middle class gets very
small direct tax benefits, including some relief
in medical reimbursements and higher exemptions on travel allowance (Rs 1,600 per month).
Clearly, the FM did not have much money to
spread around.
Fourth, the budget also balances promise and
delivery its promise now, deliver later. The
promise to cut corporate tax rates to 25 percent
(as well as the withdrawal of business exemptions) will happen in 2016-17, while the surcharge on corporate and individual taxes is up
this year itself by 2 percent. So gross corporate
taxes will actually go up in 2015-16. The cess on
income tax education and higher education
will go, but only in 2016-17. Wealth tax goes in
2015-16, but this is being compensated by the
surcharge of people with incomes above Rs 1
crore.
Fifth, the emphasis on additional infrastructure
investment is clear. Between the centre and
public sector companies, investment in infrastructure is expected to go up by Rs 70,000
crore. Coming on top of the 52 percent increase
in the railway plan, this is a significant boost.
Moreover, a new National Investment and
Infrastructure Fund will get Rs 20,000 crore
annually to support infrastructure projects. And
road, rail and irrigation projects will be allowed
to raise money from tax-free bonds.
Sixth, given the slow pace of job creation, the

government is betting on entrepreneurship to
make up the deficit. Apart from easing rules for
business, new funds are being set up to promote
entrepreneurship and fund micro and small enterprises. As the FM said, there are some 5.77
crore small business units, mostly individual
proprietorship, which run small manufacturing,
trading or service businesses. Some 62 percent of these are owned by SC/ST/OBC. These
bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access
formal systems of credit. I, therefore, propose
to create a Micro Units Development Refinance
Agency (MUDRA) Bank, with a corpus of Rs
20,000 crore, and a credit guarantee corpus
of Rs 3,000 crore. Another fund will promote
start-ups in the technology space with Rs 1,000
crore.
Seventh, the finance minister is shifting the
balance of regulatory power away from the RBI
and towards Sebi, in which the Forward markets Commission will be merged. The centre will
set up its own debt management agency, which
means the RBIs only job will be the making of
monetary policy and bank supervision. Even in
the making of monetary policy, a new legislation
will shift the power to set interest rates from the
RBI Governor to a Monetary Policy Committee,
which the Governor will chair, but where he will
have only one vote.
Eighth, the FM has also proposed to create a
new bankruptcy law that will ensure quick solutions to companies that go belly up. The bankruptcy code, possibly on the lines of Americas
Chapter 11, will replace the Sick Industrial Companies Act (SICA) and the Board for Industrial
and Financial Reconstruction. The SICA law
and the institution created under it have not delivered either the revival of sick units or ensure
quick euthanasia for the terminally ill.
Ninth, another theme in the budget is giving
workers choice both in choosing their retirement savings vehicles, and in health/recuperation benefits. Currently, all employees have no
choice but to join the Employees State Insurance Scheme (ESIS) or the Employees Provident Fund Organisation (EPFO), both of which
perform poorly. In future, employees will have
the choice of choosing a separate health insurCopyright 2012 Firstpost
ance plan instead of the ESIS, and also opt out

of the EPFO in favour of the National Pension
Scheme (NPS). As the FM noted, both EPFO
and ESIS have hostages, rather than clients. To
enable employees to invest in their own retirement corpus, the FM has also created a separate
Rs 50,000 deduction for contributions to pension funds like the NPS.
Tenth, the biggest blow the budget delivers is
to black money. The penalties for black money
are not only being enhanced, but an attempt is
being made to strike at the very root of domestic
black money by targeting big ticket cash transactions for monitoring and providing incentives
for the use of debit and credit cards. Apart from
big jail terms for concealment of income and
assets abroad, which includes similar penalties
for abettors to such concealment, benami properties will also be targeted. The Finance Bill will
prohibit the payment of more than Rs 20,000
as advance for buying property, and PAN numbers will have to be given for all purchases
above Rs 1 lakh.
Eleventh, the reform focus is being shifted from
the rich to the poor. In the past, reform had
come to mean doing things for business or the
middle class; the NDA is taking small initiatives
begun by the UPA to the next level. The Jan
Dhan Yojana, the Aadhaar ID and mobile banking will now be increasingly used for the transfer of subsidies to the poor, with LPG being the
launchpad and almost more than half the con-
sumer base. The FM said that if GST will put in

place a state-of-the-art indirect tax system by 1
April 2016, the JAM trinity (Jan Dhan-AadhaarMobile) will allow us to transfer benefits in a
leakage-proof, well-targeted and cashless manner. He added: We need to cut subsidy leakages, not subsidies themselves. We are committed
to the process of rationalizing subsidies based
on this approach.
Twelfth, the biggest promise the FM has committed himself to is on containing inflation. He
said: We have concluded a Monetary Policy
Framework Agreement with the RBI, as I had
promised in my Budget Speech for 2014-15.
This framework clearly states the objective of
keeping inflation below 6 percent. What this
means is that if inflation surges above 6 percent,
or threatens to, the Monetary Policy Committee (MPC) will act to bring inflation down even
if Jaitley wants interest rates lower. Once the
MPC gets this mandate, the finance minister is
effectively curtailing his own freedom of fiscal
action, for the MPC will act to bring inflation
down if fiscal policy is heading in the other
direction.
All in all, Jaitleys budget breaks new ground.
It is a commendable effort in the context of his
constraints. The market has no reason to mope
in gloom. This budget does nothing to ruin the
party. It sets the tone for future parties, especially if growth recovers.
Budget 2015 sets stage for a new economic order,
gives India chance to fly

Sourav Majumdar Mar 2, 2015
t would seem Finance Minister Arun Jaitley was well aware of the huge burden of
expectations he was carrying on his shoulders this time, when he rose to present the
Budget for 2015-16.
Taking off from the view that the world now
thinks it is Indias chance to fly, Jaitley put
together a Budget which, if one joins the dots,
sets the stage for a new economic order in India.
Alongside, acutely aware of the need to push
growth despite the new GDP calculations, the
finance minister has taken the route of pushing
public investment for the purpose while veering
slightly away from the fiscal consolidation path
for the moment.
In many ways, Jaitley has presented a Budget

which does not disappoint those who had placed
their faith in this being a much more substantive vision statement than the one he presented
just after the Narendra Modi government took
charge in 2014.
Budget 2015 operates on some clear themes,
and Jaitley has taken pains to explain not just
the challenges he faces but also the key ideas
he is banking on. Declining agricultural income, the need for increasing investment in
infrastructure, the need to remain on the fiscal consolidation path, a perceptible decline in
manufacturing and the impact of the greater

devolution of taxes to states have been highlighted in his Budget speech as his major challenges.
The balancing act
In that context, Budget 2015 is nothing short of
an efficient balancing of imperatives and a roadmap for reform despite pressures.
As expected by some quarters, he has eased the
fiscal consolidation target a bit announcing that
the 3 percent fiscal deficit target will now be met
in three years, rather than two. The FY16 target
is now at 3.9 percent, rather than the earlier 3.6
percent, though he has managed to stick to the
4.1 percent target for FY15, even as he reiterated the governments resolve of not wavering
from the fiscal consolidation path. Alongside,
infrastructure spends have been hiked by way
of higher outlays for roads and railways and an
increase in the capex spends of state-owned enterprises. The Rs 20,000 crore corpus National
Investment and Infrastructure Fund (NIIF), the
proposal to have tax-free bonds for roads, rail
and irrigation sectors and the accent on publicprivate partnerships for boosting infrastructure are steps aimed at making sure that the
relaxation in the fiscal deficit target is targeted
towards investment in infrastructure. The disinvestment target for FY16 has been pegged at
Rs 69,500 crore, which will be crucial for public
spending.
Reformist thrust
Jaitley has not disappointed on the reforms
front. A number of the broad proposals be
it on creating a job-creating economy rather
than a job-seeking one or in making the capital
markets more efficient or even on the banking
front would rank as important steps in creating a new economic framework. Sample some
of the steps. The Forward Markets Commission
has been merged with Sebi, a Public Debt Management Agency will be set up to bring external
and domestic borrowings under one roof and

section 6 of FEMA will be amended. There are
several steps to ensure better monetization of
gold and foreign investments in alternative investment funds have been allowed.
A number of initiatives have been announced
on the ease of doing business and the skilling
side too, an aspect which has been at the centre
of pre-Budget debate in connection with the
governments Make in India programme. The
setting up of the MUDRA Bank to refinance the
microfinance institutions and the entire initiative of funding the unfunded also aims at
addressing a major gap which existed for micro
and small enterprises which struggle to access
funds.
Perhaps one of the most important elements
of the Budget is the move to rein in the parallel
economy. Through a series of steps, Jaitley has
aimed at addressing the black economy which
includes the creation of a new law on black
money and tough measures to bring offenders
to book.
There are some other big moves as well. The
General Anti Avoidance Rules (GAAR) a bugbear for quite some time, has been deferred by
two years, the Goods and Services Tax timetable is now clear, the accent has moved from
reducing subsidies to plugging subsidy leakages
through what the Budget calls the Jan Dhan,
Aadhaar and Mobile (JAM) trinity for direct
benefits transfer and the tax structure is being
sought to be simplified and made predictable.
All these were key concerns expressed by India
Inc and the markets ahead of the Budget.
For the corporate sector, the broad roadmap is
to reduce corporate tax from 30 percent to 25
percent over the next four years beginning next
year. And the Budget also has enough for the
individual taxpayer as well. Predictably, despite the markets being choppy through the day
owing to some concerns on aspects of the fine
print, the overall reaction from Corporate India
has been one of cheer.
Says KPMG India CEO Richard Rekhy: The
Finance Minister has come out with a pragmatic
Budget which is directionally focused at achieving growth and keeping the fiscal prudence in
mind. The focus is on ease of doing business in
India and increased infrastructure spend. Measures like New Bankruptcy legislation, startup
entrepreneurs funds, GST rollout by FY 2016,
deferral of GAAR will definitely support the
cause of ease of doing business in India.
Adds Rajiv Lall, executive chairman, IDFC: Its
a development oriented budget and not a populist budget. A welcome shift in direction.
However, BMR Advisors chairman Mukesh Butani expresses mixed reactions. From a policy
standpoint, the FM has engineered the Budget
around the Prime Ministers initiatives such as
Make in India, Swachh Bharat, and Skill in
India. The focus on black money and curing the
economy of this menace seems to have taken
centrestage. The impetus to infrastructure,
agriculture and education sectors is laudable
though the much expected big bang reforms are
yet in the waiting.
Impact under watch
With the overall macro situation now benign
and inflation coming under control, Jaitley realizes this was his best chance to lay the broad
reform framework in place, and execute the
various elements over time. However, what will
be keenly watched is how the Budget initiatives
play out in the days and months ahead and
whether Jaitleys gamble on growth actually
pays off.
As BMRs Rajiv Dimri points out: Much of the
reforms process outlined in the budget proposals needs to be realized through tangible steps
over the year. It remains to be seen how reforms
unfold and take shape in terms of GST implementation and TARC recommendations. Impact
on prices would be interesting to watch with
budget proposals withdrawing service tax exemptions on construction of airports and ports,
government services, increase in service tax
rates and higher additional duties on petrol and
diesel.
While the ultimate test for Jaitley will be in how
the various Budget proposals are implemented,
the finance minister does deserve full marks this
time round for putting forward a Budget which
aims to address multiple challenges. As a statement of intent, it gets full marks. And that is a
pretty good beginning.
Budget 2015: Lets leave carping for

tomorrow , it is Jaitleys day today
Seetha Feb 28, 2015
n the film My Fair Lady, when Prof Higgins returns home after successfully showcasing Eliza Doolittle at a society event, his
friend Colonel Pickering breaks into song - 'tonight old man, you did it, you did, you said you
would do it and indeed you did.
Many would like to sing that to finance minister
Arun Jaitley after his budget speech today. Yes,
it was devoid of Big Bang Reforms, but after the
Economic Survey yesterday which advocated a
more incremental approach, this was expected.
But he has done a series of small things, which
together will add up to an effect similar to what
a few big ticket reforms will.
When he said the budget would provide a roadmap for accelerating growth, enhancing investment and passing on the benefit of the growth
process to the common man, woman, youth
and child: those, whose quality of life needs to
be improved these were not empty words. The
budget has delivered on each of these.
Jaitley has given infrastructure spending a big
push without pushing up the fiscal deficit hugely
Most importantly, Jaitley has given infrastructure spending a big push without pushing up
the fiscal deficit hugely (though he has relaxed
the fiscal consolidation roadmap).
The main problem areas have been identified
and addressed. The problem of stuck projects
and lack of new investments had been flagged
time and again. It was well known that a lot of
this was due to the problem of sovereign clearances, which just dont come.
Theres a planned legislation to set up a preexisting regulatory mechanism to take care of
multiple prior permissions. While this will take
its time in coming (theres going to be an expert
committee that will draft this), what will come
sooner is setting up projects in a plug-and-play
mode. Which means the government will first
get all necessary clearances and then bid out

projects. This is going to be done first for five
ultra-mega power projects and then later extended to other large infrastructure projects.
Vinayak Chatterjee of Feedback Infrastructure
will be a very pleased man. This was a suggestion he had made to the United Progressive
Alliance government when the government was
exercised about stuck projects.
The infrastructure push is not about large infrastructure projects alone. It is also about housing
for the poor, sanitation facilities, drinking water, electrification of villages and village roads.
The cleaning up of the tax system is a big feather in Jaitleys cap. There are steps to curb black
money, end the problem of exemptions (Rs
62,398 crore was the revenue foregone on corporate income tax in 2014-15) and bring down
the corporate tax rate over four years.
Nothing has been done to put more money in
peoples hands, but the incentives for various
savings is what the economy needed pushing
up the savings rate and channel the savings into
investments.
The proposed bankruptcy law reform is also a
major step this was an issue the Economic
Survey also highlighted. The bankruptcy code
needs to be brought in as promised.
Does the budget fall short on anything? Yes.
Though one can understand the reluctance to
bring about major subsidy reform, it would
have been appropriate to kick start a process to
exclude the better off sections from receiving
subsidies even as the poor are protected. Merely
appealing to people to give up subsidised cooking gas is not enough.
But lets leave carping for tomorrow. Today it is
Jaitleys day.
No big bang reforms but budget

2015 goes for growth, investment
Reuters, Mar 1, 2015
inance Minister Arun Jaitley on Saturday

announced a budget that put boosting
growth before painful reforms, slowing
the pace of fiscal deficit cuts and seeking to put
domestic and foreign capital to work.
In his first full-year budget since Prime Minister
Narendra Modi's landslide election victory last
May, Jaitley said India's economy was about to
take off. Modi tweeted that the budget would
"further reignite our growth engine".
said his government had acted "rapidly" to right

the course of Asia's third-largest economy.
"People who urged us to undertake 'big bang'
reforms also say the Indian economy is a super
giant, which moves slowly but surely," Jaitley
told parliament as he wrapped up a 90-minute
speech.
Jaitley promised higher investment in India's
decrepit roads and railways, offered the carrot
of tax cuts to global companies and the stick
of tighter rules to get Indian tycoons to invest
at home rather than stash wealth abroad. Tax
evaders face jail sentences of up to 10 years, he
warned.
The tax changes and tougher enforcement
would raise $2.5 billion next year, he said. Tax
receipts overall would rise 15 percent and government asset sales would raise $11 billion goals that past experience shows may be hard to
meet.
Billed as a test of the nationalist premier's

willingness to reform a $2 trillion economy
with a bloated public sector and weak private
investment, the budget was short on structural
reforms and contained revenue targets some
called unrealistic.
It drew a mixed reception from economists,
with some calling it a path to an investor-friendly India, but others seeing a missed opportunity
to tackle deep-seated structural problems.
"Definitely far from what some were hoping
would be an event similar to the game-changing
budget of 1991 which ushered in India's economic liberalisation," said Devika Mehndiratta,
senior economist at ANZ research.
Apparently anticipating such barbs, Jaitley, 62,
Although Jaitley forecast that growth would

accelerate to 8-8.5 percent in the fiscal year
starting in April, up from 7.4 percent this year,
the budget contained little obvious support for
Modi's call to "Make in India".
"It assumes a questionable growth rate, relies
too heavily on divestment to meet fiscal targets,
does not address the revenue deficit issue head
on and leaves the good things for the future,"
said Arvind Sethi, CEO of Tata Asset Management.
Capitalizing on windfall savings stemming from
cheaper oil imports, Jaitley was able to ramp
up infrastructure investment without slashing
spending on politically sensitive subsidies and
welfare schemes.
ROOM FOR RATE CUTS?
Jaitley forecast inflation at 5 percent by the end

of the fiscal year ending March 2016, undershooting the Reserve Bank of India's 6 percent
target and creating room to cut interest rates.
Annual inflation was 5.1 percent in January.
But he pushed back by a year, to 2017/18, a
deadline for cutting the fiscal deficit to 3 percent
of gross domestic product. In 2015/16, the deficit will be 3.9 percent of GDP, above the 3.6 percent target inherited from the last government.
In volatile trading, the Nifty ended 0.7 percent
higher after having briefly fallen into the red on
his comment that the fiscal deficit would slip.
Ratings agency Moody's gave the budget a cool
reception, saying it was neutral for India's credit
and left stabilising government finances at the
mercy of economic growth. Moody's rates India
at the lowest notch of investment grade.
"We were not expecting big bang reforms," said
Atsi Sheth, a Moody's sovereign ratings analyst.
"The big bang reforms are also not desirable
because they have a higher chance of rollback. "
CARROTS AND STICKS
India's budget concentrates a year's economic
policymaking into a single speech, and the
range of measures Jaitley announced included
a monetary policy overhaul, a bankruptcy code
and the creation of a public debt management
agency.
In a key passage, Jaitley said he would cut the

tax on company profits to 25 percent over four
years from the current 30 percent, high by international standards.
A national goods and services tax would enter
force, as planned, in April 2016 and a controversial set of new rules to fight tax avoidance would
be delayed by two years, he said.
Jaitley scrapped a distinction between direct
and portfolio investors, in a move to encourage foreign investors to take strategic stakes in
Indian firms. He also simplified regulation of
financial markets.
"This clear statement of intent should bring
cheer to industry," said Krupa Venkatesh, a
partner at Deloitte.
The government shied away from politically
sensitive cuts in its $37 billion subsidy bill,
seeking instead to boost efficiency of a rural jobs
scheme that is India's costliest welfare programme. It will also boost direct welfare payments into bank accounts, and gradually replace
benefits in kind.
"My proposals... lay down the roadmap for
accelerating growth, enhancing investment,
passing on the benefit of growth process to the
common man, woman, youth and child," said
Jaitley. "This is the path we will doggedly and
relentlessly pursue."
The commons man budget
From gold bonds to cheap LCD, LED TVs:

10 takeaways from Budget 2015 for the aam aadmi
Sunainaa Chadha Mar 2, 2015
espite no obvious mention of income

tax incentives for the common man,
finance minister Arun Jaitley provided
certain reliefs in this years budget that will allow the aam aadmi to save more.
1. How taxpayers can benefit
Jaitley proposed to increase the limit of deduction on account of health insurance premium from Rs.15,000 to Rs.25,000. For senior citizens this limit is to be increased from
Rs.20,000 to Rs.30,000.
For senior citizens above the age of 80 years
-- who are not eligible to avail health insurance
-- deduction will be allowed for medical expenses up to Rs.30,000. The deduction limit of
Rs 60,000 on expenditure on account of specified diseases -- like cancer -- will be enhanced to
Rs.80,000 in the case of senior citizens.
be eligible for deduction under section 80C

of the income tax and any payment from the
scheme shall not be liable to tax.
Limit on deduction on account of contribution
to a pension fund and the new pension scheme
is proposed to be increased from Rs.1 lakh to
Rs.1.5 lakh. Additional deduction of Rs.50,000
will be allowed for contribution to the new pension scheme under section 80 CCD of Income
Tax Act -- increasing the exemption from Rs.1
lakh to Rs.1.5 lakh.
Jaitley also doubled the transport allowance
exemption to Rs.1,600 per month.
Deduction u/s 80C - Rs.150,000; Deduction u/s
80CCD - Rs.50,000; Deduction on account of
interest on house property loan (Self-occupied
property) - Rs.200,000; Deduction u/s 80D on
health insurance premium - Rs.25,000; Exemption of transport allowance - Rs 19,200; Total
- Rs.444,200
2. Universal security net
The finance minister has proposed to create an
universal social security system for all.
A. Through its soon-to-be-launched Pradhan
Mantri Suraksha Bima Yojana, it looks to provide an accidental cover of Rs 2 lakh for a premium of just Rs 12 per year.
The minister also proposed additional deduction of Rs 25,000 for differently-abled persons, increasing the limit from Rs.50,000 to
Rs.75,000.
He also proposed to increase the limit of tax
deduction from Rs.1 lakh to Rs.1.25 lakh in case
of severe disability.
Investment in Sukanya Samriddhi Scheme will
B. The Centre has proposed to launch Atal Pension Yojana to provide a defined pension based
upon the contribution and its period. The govt
will contribute 50% of the contribution limited
to Rs 1,000 per year, for 5 years, in the new accounts opened before December 31, 2015.
C. The finance minister announced Pradhan
Mantri Jeevan Jyoti Bima Yojana that will cover
both natural and accidental death risk of Rs 2
lakh at a premium of Rs 330 per year for everyone in the age group of 18-50.
D. Jaitley also proposed to use the unclaimed

deposits of about Rs 3,000 cr in the PPF and
around Rs 6,000 cr in the EPF for a senior citizen fund. The corpus will be used to subsidise
the premiums of pensioners, BPL card-holders,
small and marginal farmers etc.
3. It's all about gold
The finance minister has allowed for a gold
monetization scheme where in gold deposits
will be sought from charitable trusts, temples
and other such institutions or individuals who
have large holdings of physical gold. These will
be lent to jewellers and other users of gold who
can get access to the metal without having to
buy more.
Secondly, the government will issue sovereign
gold bonds as an alternative to purchasing
physical gold. The bond will carry a fixed rate of
interest, and also be redeemable in terms of the
face value of the gold at the time of redemption
by the holder of the bond.
Thirdly, the centre is also coming out with an
Indian gold coin with the Ashoka Chakra embossed on its face to help recycle gold internally
in India.
4. Service tax is now 14 percent which
means everything you do has gotten costlier
Tobacco, cigarettes, paan masala, gutka etc. got
more expensive with the excise on cigarettes
raised to 15% and 25% for different categories.
Even mineral water, aerated drinks, mobile
handsets, tablet computers, alcohol will get expensive. Cars may get costlier.
On the bright side, shoes will get cheaper as
excise duty on leather products, shoes, footwear
etc. with retail price more than Rs. 1000 per
pair has been reduced by 6%.
Also the in case you want to buy a swanky new
LED or LCD TV, it's going to cost you less now.
But net-net: Even if Mumbai does offer you a
an all-night party lifestyle, it is going to burn
a huge hole in your pocket because everything
from your food bill to alcohol bill will get more

expensive.
5. There are new IIMs and IITs, which
means all those MBA and engineering
aspirants have something to cheer about
The FM has proposed a new IIT in Karnataka
along with IIMs in Jammu and Kashmir and
Andhra Pradesh.
Even the Indian School of Mines, Dhanbad
will be converted into a full-fledged IIT, while
AIIMS will be set up in Jammu and Kashmir,
Punjab, Tamil Nadu, Himachal Pradesh, Bihar
and Assam.
"In Kerala, the existing National Institute of
Speech and Hearing will become a a university
of Disability Studies and Rehabilitation," he
said.
Jaitley also proposed three new National Institutes of Pharmaceutical Education and Research, one each in Maharashtra, Rajasthan and
Chhattisgarh.
6. Higher education too got a boost
In order to enable poor and middle class students to pursue higher education of their choice
without any constraints of funds, a fully IT
based Student Financial Aid Authority is proposed to be set up during the year 2015-16.
Jaitley has even hiked the amount allocated to
higher education by 13 percent and earmarked
Rs.26,855 crore for the same.
"To ensure that there is a senior secondary
school within five km reach of each child, we
need to upgrade over 80,000 secondary schools
and add or upgrade 75,000 junior/middle to
the senior secondary level," Jaitley said in his
speech.
With a huge focus on skill developmen , the National Skills Mission was announced for youth
below 25 years of age.
7. Tourism is set to get a huge boost
Not only did the tourism ministry get a 33
percent hike in budget allocation but Jaitley
has also proposed to increase cover for Visa on

Arrival (VoA) facility to 150 countries against
43. The government has already eased Indian
tourism visa regime through the expansion of
VoA enabled by Electronic Travel Authorisation (ETA) and extended this facility to tourists
from countries like the US, Israel, Palestine and
Japan to boost tourism sector.
Secondly, Jaitley also proposed to make World
Heritage Sites more tourist friendly and the
government will provide resources to start
work for the following heritage sites -- Churches
& Convents of Old Goa, Hampi in Karnataka,
Kumbalgarh and other Hill Forts of Rajasthan,
Rani ki Vav in Patan in Gujarat, Leh Palace in
Ladakh in J&K, Varanasi Temple town in UP,
Jalianwala bagh Amritsar in Punjab and Qutub
Shahi Tombs Hyderabad in Telangana.
8. Tax free bonds for railways and infra
Jaitley has announced the introduction of
tax-free infra bonds for railways and roads to
mobilise funds for projects in the infrastructure
development sector. For investors these are
good long-term saving toosl as interest earned
on these bonds is tax-free.
9. Rich will have to shell out more money

as tax
The super rich taxpayers will have to shell out
more tax as the budget has raised the surcharge
payable by those reporting an income of more
than Rs 1 crore a year. Someone earning Rs 10
lakh a month will have to pay an additional Rs
5,800 in tax every month.
Also, the budget has proposed to remove wealth
tax.
10. Jaitley is keen to stamp out black
money
Not only has PAN been made mandatory for
all transactions above Rs 1 lakh but not declaring foreign assets can lead to rigorous imprisonment of up to 10 years and a penalty of 300
percent of the income sought to be concealed.
Even non-filing of tax return or submitting
incorrect information in the tax return can lead
to imprisonment of up to seven years. Also,
amendments have been proposed in the Income
Tax Act prohibiting acceptance or repayment of
advance in cash of Rs 20,000 or more for any
transaction in immovable property.
Budget 2015: Tablets, shoes to get cheaper but
drinks, night outs to get expensive

IANS, Mar 1, 2015
he national budget presented by Finance

Minister Arun Jaitley Saturday has the
potential to increase what you pay for
some commodities while also reducing it for
certain categories.
more harder. The duty on aerated water has

been proposed to increase from 17.5 percent
to 18 percent. In the last budget 5 percent was
increased in the excise duty on aerated sugary
drinks.
Like in the past the levy on tobacco products

has been hiked, making it more expensive for
smokers and other tobacco product users. Excise duty on cigarettes has been increased by 25
percent for cigarettes of length not exceeding
65 mm and by 15 percent for cigarettes of other
lengths. This is the fourth consecutive budget
which has raised excise duty on tabacco by more
than 18 percent hike in duty.
Jaitley has proposed to make leather footwear,

India made mobile phones, tablets, microwave,
peanut butter, packaged fruits and agarbattis
cheaper.
Service tax exemption has also been proposed
for ambulance services, entry to zoo and cold
storage facilities.
Imported medical devices like medical video
endoscopes and pacemakers are set to become
cheaper, as the budget has proposed reduction
of custom and counter vailing duty (CVD).
Similarly imported LCD/LED television panels
may also get cheaper due to reduction in customs duty.
The items which are set to become costlier are:
Similar increases are proposed on cigars, cheroots and cigarillos. Last year, the finance minister had hiked duty by 22 percent. Even custom
duty on tobacco haso been increased to Rs 70
per kg from the Rs 60.
The finance minister also proposed to hike service tax from 12.36 percent to 14 percent. Making air travel, eating out and mobile bills more
expensive. Going out for concerts and sports
events will call for shelling out extra bucks due
to the service tax hike.
Even aerated sugary drinks like colas and packaged water are likely to piche the pocket a bit
* Service tax rate increased to 14 percent and

new services added to the taxable list like
services provided by a mutual fund agent to a
mutual fund or assets management company,
distributor to a mutual fund or asset management company and selling or marketing agent
of lottery ticket to a distributor.
* Aerated water, iced tea, lemonade and other
beverages, waters, including mineral water and
aerated water, containing added sugar or other
sweetening matter or flavour.
* Condensed milk in containers
* Peanut butter
* Sacks and bags (including cones) of plastics
* Cut tobacco, cigarettes

* Cement
* Imported completely built units (CBUs) of
commercial vehicles
Items which are set to become cheaper are:
* Bituminous coal, ulexite ore, liquefied butane,
ethylene dichloride, vinyl chloride monomer
and styrene monomer, butyl acrylate, anthraquinone
* Wind power generators, solar water heater
system
* Wafers for manufacture of integrated circuit

(IC) modules for smart cards LED drivers and
MCPCB for LED lights, fixtures and lamps.
* Agarbattis
* Pacemakers
* Tablet computers
* Ambulances
* Leather footwear priced over Rs.1,000 per
pair
* Imported LCD/LED television panels
Budget 2015 finds no middle class takers

Tarique Anwar Mar 1, 2015
uch toh phool khilaye hai humne, kuch

aur khilane hai. Diqqat yeh hai ki
raahon mein kai kaante purane hain
(I have made some flowers bloom, and many
are yet to be bloomed. But I have to negotiate
many old thorns that lie strewn on the path)
- beginning his Budget presentation with this
couplet, Finance Minister Arun Jaitley may
have summed up well his challenges and predicament, but the middle class seems to be tired
of listening to the same things again and again.
It expected a burst of good news in the Budget,
but ended up a bit disappointed.
The reaction to the Budget among the middle
class was mixed with some calling it forward
looking which will help the economy in the
long run. The dominant mood, however, was
one of dismay.
It is a forward looking budget with emphasis
on skill development and entrepreneurship. It
will help people in the long term, said young
businessman Amit Kumar Jha, who runs an
online portal to sell Darjeeling tea. But he also
added, Understanding the basic dynamics and
constraints, it is not up to the expectations of
the middle income group.

Kamlesh Kumar, a corporate sector employee
in the national capital, feels deceived. We
have been deceived on every front in the Budget
2015. There is no respite in the form of increased tax slabs that remains unchanged from
Rs 2.5 lakh. The hike in Service Tax will cause a
bigger hole in the pocket of salaried persons like
us, he said.
The government increased the service tax to 14
percent from the current 12.36 percent to facilitate smooth transition to levy of tax on services
by both the centre and the states. The revised
rate, which will come into effect from a date to
be notified, will make costlier a host of activities like air travel, eating out at restaurants,
paying mobile and internet bills, visiting beauty
parlours, stay in hotels, dry cleaning of clothes,
purchasing of branded clothes, cable and DTH
services, courier service, credit and debit card
related services, asset management and insurance, stock broking and all other things that
require availing of service from another party.
However, the Finance minister spared common
people from price hikes on many commonly

used day-to-day items by reducing duties.
Khayyam Khan, a businessman who deals in
wholesale of mobile handsets and accessories,
said, As Goods and Services Tax is expected to
reduce the red tapism involved in Sales Tax, the
business community was waiting for key announcements on GST so that inter-state business becomes easy. We are a disappointed lot.
Although Nupur Das, a Political Science student
at Delhi University, is happy that the government has tried to address the concerns of the
education sector,t he is not sure how efficient
the promises turn out to be. Mr Jaitley has said
in his budget speech that the government will
ensure no student misses on higher education
due to lack of funds and promised to set up an
educational loan scheme for higher education.
He has also announced that more educational
institution will be set up. It will be interesting to
see how efficient these proposals and promises
turn out to be, he said.
Jaitley has announced to set up an IIT in Karnataka and upgradation of Dhanbads Indian
School of Mines to IIT; AIIMS in Assam, Bihar,
Himachal Pradesh, Jammu and Kashmir, Punjab and Tamil Nadu; IIM in Andhra Pradesh
and Jammu and Kashmir; University of Disability Studies in Kerala; PG institute of Horticulture in Amritsar and Centre of film production,
animation and gaming in Arunachal Pradesh.
For Mansi Sharma, a young professional, it was
a photocopy budget of the previous regime. It
was a photocopy of UPA governments budgets
and had nothing for poor. Why was Corporate
Tax reduced and Service Tax increased? The
message is clear: snatch from the poor and feed
the rich, she observed.
Taking a jibe the much talked about achche
din, she said, After budget speech was made in

Parliament, petrol and diesel prices were increased. So much for achche din!
Md Reyaz, a research scholar at Jamia Millia Islamia, finds nothing significant in the budget.
The country was expecting big bang reforms,
but sadly there was nothing extraordinary in the
budget. All the proposed reforms are painful for
common people like us, he added.
Satirist Rahul Pandey responded on a lighter
note but didnt forget to be offensive. Those in
high offices should increase their security cover
as leather shoes has been made cheaper. But the
service will be a little costly as the tax rate has
been hiked, he said.
Another such comment came from Sandeep
Kumar who said, Shayad, angrezi budget
bhashan padhne wale Arun Jaitleyji ko yeh pata
nahin tha ki Babaji Ka Thullu ko English men
kya kahte hain, warna woh saaf saaf bata dete
(Perhaps, Arun Jaitley, who delivered budged
speech in English, did not know how to translate into English Babaji Ka Thullu- a famous
punchline of a comedy show being hosted by
actor Kapil Sharma that means for when you do
something in hopes for reward, you get nothing
at all otherwise he would have made it clear.
Self-employed Rakesh Maloo warned the Modi
government of the same fate as the Manmohan
Singh-led UPAs if the former continued with its
pro-rich policies.
The BJP will be wiped out from Bihar in the
upcoming assembly elections there and it will
have to sit on the Opposition if it does not stop
fooling people in the name of development
and bringing back economy on right track. Its
pro-rich policies make the government lose the
ground support it had garnered ahead of general elections 2014, he added.
Jaitleys tax gimmick: Budget 2015 results in

tax benefit of only Rs 52,221, not Rs 4.44 lakh
Vivek Kaul Mar 1, 2015
he finance minister Arun Jaitley during

the course of his budget speech today
remarked: After taking into account the
tax concession given to middle class tax payers in my last Budget and this Budget, today an
individual tax payer will get tax benefit of Rs
4,44,200.
The details are provided in the annexure to the
budget speech (which is reproduced below).
Jaitley's statement is incorrect at multiple levels. First and foremost he wants us to believe
that he has been responsible for all these deductions. Secondly, what he is talking about are
essentially tax deductions and not tax benefits.
What Jaitley should have said is that the total
tax deductions will amount to Rs 4.44 lakh. And
the tax benefit would depend on the tax bracket
one falls in. So, an individual in the 10.3% tax
bracket would save tax of Rs 45,752.6. An individual in the 20.6% tax bracket would save tax
of Rs 91,505.2. And an individual in the 30.9%
tax bracket would save tax of Rs 1,37,257.8.
Further, Jaitley's statement suggests that he is
responsible for all these tax deductions, which is
not correct. All these tax deductions have been
around for a while. Jaitley in his two budgets
has just re-jigged the total amount of deductions that are allowed, under the various sections of the Income Tax Act.
So, in the last year's budget he increased the

deduction allowed under Section 80 C from Rs 1
lakh to Rs 1.5 lakh. He also increased the deduction allowed for interest being paid on a home
loan for self occupied property from Rs 1.5 lakh
to Rs 2 lakh. This year, he increased the deduction on health insurance premium from Rs 15,
000 to Rs 25,000. He also allowed an 'extra
deduction' of Rs 50,000 for investments made
into the New Pension Scheme. The transport
allowance allowed as an exemption has been
doubled from Rs 9,600 to Rs 19,200.
Once all this is taken into account Jaitley has
essentially allowed an extra deduction of Rs
1,69,600 in his last two budgets.(Rs 50,000
extra for Section 80C + Rs 50,000 extra for
investing in NPS + Rs 50,000 extra for interest paid on a home loan + Rs 10,000 extra on
health insurance premium + Rs 9,600 extra on
transport allowance).
Any 'extra' benefit is on this Rs 1,69,600. For
those in the 10.3% tax bracket this works out to
Rs 17,407. For those in the 20.6% tax bracket
this works out to Rs 34,814. For those in the
30.9% tax bracket this works out to Rs 52,221.
Hence, the tax deductions and exemptions
offered by Jaitley have led to a maximum tax
benefit of Rs 52,221 and not Rs 4.44 lakh, as he
claimed in his speech.
More deductions but no changes in tax slabs:

What Union Budget 2015 offers middle class
FP Staff Mar 1, 2015
inance Minister Arun Jaitley did not

really bring in acche din for the salaried
class as the income tax slabs remain
unchanged but it did offer some respite by doubling monthly transport allowance ( which is tax
free) to Rs 1600 as well as offering deductions
under section 80 (D).
Firstly, Medical reimbursement/Mediclaim
deductions under section 80D have been raised
from Rs 15,000 to Rs 25,000; and Rs 30,000
for senior citizens.
Secondly, Disabled and very senior citizens will
get higher deductions.
"For senior citizen above the age of 80 years,
not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical
expenditure. Deduction limit of Rs 60,000 on
expenditure on account of specified diseases is
enhanced to Rs 80,000 in the case of senior citizens," the government release said.
Additional deduction of Rs 25,000 is allowed

for differently-abled persons, increasing the
limit from Rs 50,000 to Rs 75,000. It is also
proposed to increase the limit of deduction from
Rs 1 lakh to Rs 1.25 lakh in case of severe disability.
Thirdly, Additional deductions of Rs 50,000
per annum will be available for contributions to
pension schemes.
Fourthly, Tax-free travel allowances raised from
Rs 800 pm to Rs 1,600.
What this means is that individual taxpayers
can effectively have a tax-free income of Rs
4,44,200 if they use all deduction options.
See the break-up below:
Jaitley also proposed to provide that investment
in Sukanya Samriddhi Scheme will be eligible
for deduction under section 80C of the incometax and any payment from the scheme shall not
be liable to tax.
Here's the bad news for the super rich though:

Wealth tax has been replaced with an additional
2 percent surcharge on the super rich.
However, there have been no changes in the

personal income tax exemption limit. Last year
Jaitley had raised the personal Income Tax
exemption limit by Rs 50,000 to Rs 2.50 lakh
and also raised by same amount the exemption
from payment of Income Tax on savings to Rs
1.50 lakh. Jaitley had also raised the tax exemption limit on repayment of housing loans to Rs 2
lakh from Rs 1.5 lakh but hut apart from deductions no other sops for the salaried class have
been offered.
"Jaitley proposed to levy a surcharge at the rate

of 12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding Rs 1 crore. Surcharge in the case of domestic
companies having income exceeding Rs 1 crore
and upto Rs 10 crore is proposed to be levied
@ 7% and surcharge @ 12% is proposed to be
levied on domestic companies having income
exceeding Rs 10 crore," said a government released.
Budget 2015: Why cut corporate tax
but not personal tax, Mr Jaitley?

Vivek Kaul Mar 1, 2015
s far as goodies for the common man are concerned, there was nothing much in the budget
presented by the finance minister Arun Jaitley today.
The tax deduction allowed on the payment of health insurance premium was increased to Rs
25,000 from the current Rs 15,000. This will lead to tax savings of Rs 1,030-Rs 3,090, depending
on which tax bracket you fall into. For senior citizens this limit was increased to Rs 30,000 from
the current Rs 20,000 per year.
Also, for very senior citizens of the age 80 years or more, who are not covered by health insurance,
a deduction of Rs 30,000 per year has been allowed on expenditure incurred on their treatment.
For expenditure incurred towards specified diseases of serious nature, very senior citizens will now
be allowed a deduction of Rs 80,000, in comparison to the earlier Rs 60,000.
The one good development has been an increase in the limit of deduction allowed on investing
in the National Pension Scheme(NPS) to Rs 1.5 lakh from the current Rs 1 lakh, under Section
80CCD.
In fact, Jaitley has also proposed an extra deduction of up to Rs 50,000 for investing in the NPS,
over and above the Rs 1.5 lakh.
Oh, and the transport allowance exemption has been increased from the current Rs 800 to Rs
1600. That should be a huge help indeed.
Hence, net-net the budget does not have much to offer to the middle-class taxpayer. The question
that arises here is that why should the budget have goodies to offer to the middle-class taxpayer
every year? Ultimately, a stable income tax policy is also very important.
That is indeed a fair point. Nevertheless, when the government is working towards bringing down
the tax rate for corporates, why shouldn't something be on offer to the middle-class tax payers as
well? That's a question worth asking.
The finance minister Arun Jaitley in his speech said: The basic rate of Corporate Tax in India at
30% is higher than the rates prevalent in the other major Asian economies, making our domestic
industry uncompetitive. Moreover, the effective collection of Corporate Tax is about 23%.
Along with bringing down the tax rate for corporates, Jaitley also said that we do not get that tax
due to excessive exemptions. A regime of exemptions has led to pressure groups, litigation and loss
of revenue. It also gives room for avoidable discretion. The suggestion here was that along with
income tax rates coming down, the exemptions that are allowed to corporates will come down as
well. The idea seems to be that at lower rates more corporate taxes can be collected.
Along with the budget every year, the government also releases a document called the statement
of revenue foregone. The estimates and projections are intended to indicate the potential revenue
gain that would be realised by removing exemptions, deductions, weighted deductions and similar
measures, the statement points out.
As can be seen from the above table, the revenue foregone number of the central government for
this financial year is Rs 5,89,285.2 crore. This is higher than the fiscal deficit of Rs 512628 projected for this financial year.
Nevertheless, it is important to point out that the revenue foregone number is based on certain assumptions. The estimates are based on a short-term impact analysis. They are developed assuming that the underlying tax base would not be affected by removal of such measures...The impact
of each tax incentive is determined separately, assuming that all other tax provisions remain unchanged. Many of the tax concessions do, however, interact with each other. Therefore, the interactive impact of tax incentives could turn out to be different from the tax expenditure calculated by
adding up the estimates and projections for each provision.
So the revenue foregone figure needs to be looked at with these limitations in mind. Having said
that, the government of India is losing out on revenue because of the exemptions and deductions.
There is no denying that.
As can be seen from the above table, corporate India is a major beneficiary of all the exemptions
and deductions. If one adjusts for personal income tax, the revenue foregone for the central government still comes in at a whopping Rs 5,48,850.6 crore for 2014-2015. While this number maybe
notional, there is clearly no denying that corporates benefit immensely out of the deductions and
exemptions that have crept into our tax laws over the years.
In fact, bigger the corporate the more deductions and exemptions they take. Corporates, which
make an operating profit within the range of Rs 0-1 crore have an effective tax rate of 26.89%
Those in the Rs 50-100 crore range have an effective tax rate of 24.29%. Whereas those making a
profit of greater than Rs 500 crore have an effective tax rate of 20.68%.
The overall rate is 23.22%. Jaitley wants to push up this rate of actual tax paid by bringing down
the corporate tax rate to 25% from the current 30%, over the next four years. The hope also seems
to be that at lower tax rates more taxes will eventually get paid.
The question is why can't the same logic be applied to individual tax payers? Around 3% of Indians
pay income tax. If more corporates are likely to pay more tax at lower rates, can't the same assumption be made for individual tax payers as well? Further, like the corporates income tax laws,
can't the personal income tax laws simplified as well?
This is something that the finance minister Arun Jaitley needs to answer. May be he will in the
days to come.
(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)
Budget 2015 takeways: Eating out gets

costlier as FM raises service tax to 14%
FP Staff, Feb 28, 2015
inance Minister Arun Jaitley today presented the Union budget for FY16 in the
backdrop of easing inflation and interest
rates but continued growth challenges which
the government needs to address. Jaitley announced plans for a universal social security
system that would give poor Indians access to
subsidised insurance and pensions. Tax benefits were proposed on health insurance, raising the exemption ceiling to Rs. 25,000 from
Rs. 15,000. For senior citizens, the exemption
would be up to Rs 30,000. The finance minister
also proposed to provide coverage for accidents
and death to the poor for just Rs. 12 a year.
Jaitley raised the tax incentive limit for investment in pension fund by Rs. 50,000, taking it
to Rs. 1.5 lakh. But here's the biggest setback:
Service tax has been hiked from 12.3 percent to
14 percent, which means everything from eating
out, to ordering in, going to the theatres is all
going to get expensive.
The 3 achievements of Govt have been PM's
Jan Dhan Yojana, transparent auctions &
Swachh Bharat, said Jaitley: Here are the highlights of his speech in parliament:
The world is predicting it is India's chance
to fly and credibility of the economy has been
re-estbalished. Not only is ours the second best
performing stock markets among the big economies, but India is poised to be the fastest-growing economy
Reuters
Reuters
Coal bearing states will get several lakhs of
crores thanks tot he coal block auction
50 lakh toilets have already been constructed
in 2014-2015 and we will achieve our target of
six crore toilets
GST will be put in place as a state of art indirect tax system by April 1st 2016
Our achievement is to conquer inflation; will

be only five percent by end of year
GDP growth for 2015-16 seen at between 8 8.5 percent. Estimated GDP for current fiscal is
7.4%
Increase in agriculture productivity is essential
for welfare for rural population,we should commit to increase irrigation area
Need to upgrade 80,000 secondary schools
so that they are within 5 km reach for students.
According to the FM, Skill development should
start from class XI for those who are not that
bright academically. Students should work as
trainee in the industry and the industry should
give stipend to these students. In the classroom
should be taught about their rights and responsibility towards the country. FM proposes new
scheme called Nayi Manzil to enable youth
without school leaving certificates to get employment
Fiscal discipline has to be achieved despite
demands for public investment. States will now
be empowered with more resources as recommended by the Financial Commission report.
Devolution will be Rs. 5.2 lakh crore in 2015.
Total transfer to States will 62 per cent.
Economic growth this year at 11.5 percent is
lower in nominal terms but will meet the challenging fiscal target of 4.1 percent of GDP.
Jaitley further said that fiscal deficit target of 3
percent will be achieved in three years rather
than the two years announced earlier. So fiscal
deficit seen at 3.9% of GDP in 15/16; 3.5% of
GDP in 16/17 and 3% in 2017/18.
CPI inflation to remain close to 5 pct by
March, opening room for more monetary policy
easing
Economy faces five challenges: Agri income
are under stress, increase in public and private

investment, manufacturing reduced to 17%, fiscal discipline, devolution to states
Need to cut subsidy leakage, not subsidy itself.
Working towards rationalisation of subsidies,
says FM. Subsidies will be targeted and done
directly, expect those in the top tax bracket will
give up LPG subsidy voluntarily. Direct Transfer
of Benefits will be expanded from 1 crore accounts to 10.3 accounts
Government to set up Mudra Bank aimed at
lending to lower income groups
Rural Infrastructure Development Fund to be
25000 crore
FM proposes much needed bankruptcy code
in the year 2015-2016 to meet global standards
and provide for judicial capacity. The code is
aimed at addressing bad loan challenges
Social security systems for all poor and an affordable insurance policy for the poor is also being promised. Measure to bring in more equity.
Atal Pension Yojana will provide defined pension according to contribution ; 50% contribution to be from the government
Infrastructure outlays for roads and railways
go up. Investment in infrastructure will go up
by Rs 70000 crore in 2015/16 over last year
PPP model of Infrastructure to be revitalized and realigned where government will bear
larger part of the risk
Second unit of Kudankulam nuclear power
station to be commissioned in 2015/16. Govt
also proposes to set up 5 ultra mega power
projects, each of 4000 MW, will be plug and
play projects
Deepening of bond markets is the need of the
hour. FM proposes to merge FMC with Sebi to
reduce speculation
MNREGA allocation to go up by Rs 5000
crore. This is the highest ever allocation to the
scheme
Ports in public sector will be encouraged to
corporatize & become companies under companies act

FM promises Rs 1,000 crore corpus for establishing a mechanism to facilitate startups
FM proposes to introduce gold monetisation
scheme to allow investors to earn interest in
metal account. Also says an alternative sovereign gold bond to replace physical gold. Jaitley
also proposes to work on developing Indian
gold coin which carries the Ashok Chakra to
help recycle gold available in country
Debit card transactions to be encouraged and
cash transaction dis incentivised
Employees EPF contribution may become
optional
Jaitley now proposes to do away with different
types of foreign investment and replace them
with composite caps instead
Another Rs 1,000 crore committed to the Nirbhaya Fund
Jaitley proposes increase in Visa on Arrivals to
150 countries from its current 43 in an attempt
to boost tourism
Dispute of resolution bill to be set to see that
stuck projects can be unlocked
FM propose to set up AIIMS this year in J&K,
Punjab, Tamil Nadu, HP and Assam and new
New Indian Institute of Managements in J&K
and Andhra Pradesh. Meanwhile ISM Dhanabad will be upgraded to full IIT
India ups defence budget to Rs 2,46,727 crore
for coming fiscal
FM proposes to develop heritage sites Elephanta Caves; old Goan churches; Varanasi;
Hampi etc
Taxation: FM Proposes to reduce the rate of
corproate tax to 25 percent from the current 30
percent over the next four years
Black money law shall be implemented by next
year: Foreign Exchange Management Act and
Money Laundering Act will be amended in relation to confiscation of assets

In order to curb benami transaction in property deals, Jaitley has proposed to rationalise
capital gains tax regime for real estate investment trusts.
GAAR deferred by another 2 years
Indirect tax: Govt to reduce custom duty on 22
items
FM proposes to replace wealth tax with additional 2% surcharge on super rich ( those earning above Rs 1 crore in a year) This will add Rs
9000 crore to the government's kitty
Pan Number quoting made compulsory for
transactions more than Rs 1 lakh.
For senior citizens, health insurance premium
will now be Rs 30,000
Additional deduction of Rs 50000 under section 80CCD, with aim of moving from pensionless to a pension society
An individual tax payer can now get exemptions up to Rs 4.4 lakh.
Transport allowance increased to Rs 1600 a
month from the current Rs 800
Service tax has been raised from 12.3 percent
to 14 percent
To discourage transactions in cash, Rupee
debit card to incentivise credit transactions
Clean energy cess increased from 100 to 200
Rupees per metric ton of coal to finance Green
Energy Fund
Custom duty on tobacco increased to Rs 70 a
kg from the current Rs 60/kg. This means cigarettes are getting more expensive.
100 percent Tax exemption for contributions

to 'Swachh Bharat Abhiyan' and 'Clean Ganga
Fund' by corporates as part of CSR
Swachh Bharat cess of two percent, if necessary
Law against Benami property in fight against
black money
Splitting of transaction not to be permitted
Tax regime to be rationalised
Rigorous imprisonment of up to 10 years for
concealing income
Prevention of Money Laundering Act to be
amended to provide for forfeiture of property in
India if the one abroad cannot be attached
Exemption to individual tax payers to continue
In last nine months several steps taken to effectively deal with problem of black money
Comprehensive new law to be brought against
black money
New structure to be put in place in banking
sector for seamless integration of data
Adequate provision for defence with
Rs.246,727 crore earmarked this year
Fully IT-based student-help facility for needy
students
Eastern states to be given opportunity to
develop faster. Special boost to Bihar and West
Bengal as in the case of Andhra Pradesh and
Telangana
Good progress in DMIC corridor and other
infra-projects. Rs.1,200 crore earmarked and
additional funds if pace of work picks up on
ongoing projects
Custom duty on commercial vehicles hiked to

40 percent from 10 percent
Excise duty on footwear with leather uppers to
be reduced to six percent
Misplaced priorities? Budget 2015 doesnt allow

govt to take on spread of diseases like swine flu
Rajesh Pandathil, Mar 2, 2015
hen it comes to allocation for the

healthcare sector, governments in
India have always been stingy. Arun
Jaitley's 2015-16 budget shows the Modi government is no different and that is bad news,
especially when swine flu is spreading across
the country.
The government has allocated Rs 33,152 crore

to the health sector. In his Budget in July 2014,
Jaitley had earmarked Rs 30,645 crore, which,
according to an earlier Reuters report, was further cut by 20 percent due to the fiscal strains.
Apart from this allocation, the minister has
made proposals to set up All India Institute
of Medical Sciences (AIIMS) in J&K, Punjab,
Tamil Nadu, Himachal Pradesh and Assam.
Another AIIMS-like institution will come up in
Bihar too.
Another step taken by the finance minister to
widen healthcare net is increasing the limit of
deduction in respect of health insurance premium (Section 80D of the Income Tax Act) from
Rs 15,000 to Rs 25,000.
However, experts are disappointed with the
measures taken as they fail to address many
burning issues that need urgent attention.
"It is not clear how the marginal increase in
allocation will take care of the family planning agenda and the new AIIMS," Population
Foundation of India executive director Poonam
Muttreja has been quoted as saying in a report
in The Times of India.
The announcement of the five more AIIMS need
to be taken with a pinch off salt as this is not
going to happen in the foreseeable future. The
July budget had also proposed to set up four
AIIMS-like institutions in Andhra Pradesh,
West Bengal, Maharashtra and Uttar Pradesh.
The fund set aside was a meagre Rs 500 crore.
There is no update on what has happened to
this plan yet. But with the cut in the health allocation last year, there is no reason to believe
that the government has made any headway on
this.
Coming back to the immediate issues in the
healthcare sector, one has to look at the allocation in the context of the spreading swine flu in
the country. According to a PTI report, citing
health ministry statistics, swine flu has claimed
1,041 lives as of 28 February while the number
of people affected by the virus crossed 19,000.
In this context, as the healthcare sector experts
point out, it is urgently needed to allocate funds
to control such disease outbreaks.
The allocation itself is too low. As a percent of
total expenditure it is just 1.86 percent, which
is also the second lowest in the last 10 years.
The lowest was in 2012-13, when the allocation
stood at Rs 25,539 crore, which was just 1.81
percent of the total expenditure that year.
However, this is nothing new in India. As per
data, India's health and family care allocations
have on an average always remained a low 1.96
percent of the total expenditure over the last 10
years (without taking into account the 20 percent cut in 2014-15). Next year's allocation is
lower than this 10-year average.
"Good health is a necessity for both quality of

life, and a persons productivity and ability to
support his or her family. Providing medical
services in each village and city is absolutely essential," the finance minister said in his budget
speech.
Clearly, he actions do not support his words
fully.
Data by Kishor Kadam
Budget 2015: Super rich senior
citizens to take biggest hit

PTI, Mar 1, 2015
ew Delhi: Individuals with an annual

income of above Rs 10 lakh but below
Rs 1 crore have emerged as the biggest
beneficiaries of the new taxation proposals, if
they are aged below 60 years, while the super
rich above this age bracket will be hit the hardest.
rich surcharge to 12 percent from 10 percent

for those individuals earning more than Rs one
crore. However, he has also proposed additional
deductions in lieu of investments in pension
and health insurance schemes.
The additional savings would be the lowest at
Rs 7,210 for senior citizens in the age bracket of
60-80 years and with annual income of below
Rs five lakh. For individuals below 60 years of
age in this income bracket, the additional savings would be Rs 8,199.
In case of annual income of Rs 5-10 lakh, the
additional savings would be Rs 16,398 for individuals below 60 years, while the same would
be Rs 14,420 for senior citizens aged 60 years
and above.
As per an analysis of new income tax proposals, an individual aged below 60 years can make
additional saving of up to Rs 24,596 a year if
his or her annual income is above Rs 10 lakh
but below Rs 1 crore. For senior citizens in this
income bracket, savings would be little lower at
Rs 21,630.
At the same time, senior citizens above 60 years
of age would have to pay additional tax of Rs
64,550 a year if their annual income is more
than Rs one crore.
For the individuals below 60 years of age, with
annual income of over Rs one crore, the additional tax works out to a little lower at Rs
61,271, according to an 'impact report' prepared
by consultancy major PwC for the income tax
proposals made by Finance Minister Arun Jaitley in his Budget yesterday.
Jaitley has announced increasing the super-
Under new proposals, further deductions of Rs

50,000 a year would be allowed for contribution
made to the National Pension Scheme. Deduction on Mediclaim premium has been raised
from Rs 15,000 to Rs 25,000, while that for
senior citizen parents has been increased from
Rs 20,000 to Rs 30,000.
A fresh deduction of Rs 30,000 has been provided for the amount paid on account of medical expenditure incurred on health of a very
senior citizen where no amount is paid towards
mediclaim premium.
PwC India Partner and Leader Personal Tax,
Kuldip Kumar said that "having raised the basic
exemption limit and 80C limit last year, there
was hardly any scope for further concession.
"Raising the limit of health insurance premium,
transport allowance exemption and additional
deduction of 50,000 for NPS will help taxpayers
save little more in taxes. However, super rich
tax payers (having taxable income exceeding Rs
1 crore) will have to shell out more due to inCopyright 2012 Firstpost
crease in surcharge from 10 to 12 per cent.

"Abolishment of wealth tax will give savings to
those who are having taxable wealth. There is a
greater focus in the budget on curbing of black
money."
Macroeconomics and sector impact:

Breaking it down
Budget 2015: The 4 measures announced

by Jaitley that will be long remembered
K Yatish Rajawat, Mar 2, 2015
inance minister Arun Jaitley's Budget

2015-16 may have disappointed the
masses, middle class and markets as he
has not handed out sops as they expected. It
would have been brave and bold of him to hand
them out as expected. Several FMs, including P
Chidambaram in his dream budget, did it excessively.
growth perception. The actual gross tax revenue

in 2013-14 were Rs 11,38,733 crore and Jaitley's
last budget had estimated this to grow to Rs
13,64,524 crores, a growth of almost 20 percent.
These were numbers that were carried forward
from Chidambarams interim budget and not
tinkered at all. It was an optimistic growth
target and was fed by the same hype that is currently feeding the perception of high economic
growth. Which is why he said Phool khilane
hai... par bagh kantein kai purine hain.
Budgetary estimates are generally higher than
actual receipts and are never fully accurate. But
the revised estimates for 2014-15 show the tax
revenues are at Rs 12,51,391 crores a growth of
approximately 10 percent, that means a shortfall of almost 10 percent. If the fuel prices had
not dropped we would have been staring at a
very challenging situation.
Jaitley did not play to the galley of expectations

or the perceptions that says all is well. Sitting
where he is he has belied the fancy numbers put
out by the CSO of the revised GDP numbers and
seconded the criticism of the CEA in the Economic Survey.
The FM has taken heed of the global slowdown
and the inherent opportunity and risk that lie
there. In a way, Jaitley has become a central
banker whose move and words hide more than
they reveal.
The opposition is alleging the Budget is procorporate and anti- farmer. There is little
headroom on revenue front and no leeway on
expenditure. So plan expenditure for most ministries is down, barring his own and couple of
others. The investment environment has actually not changed much from 2013-14 with the
private sector still waiting and watching.
The tax revenues show a lack of economic
He is still trying to project an upbeat perception of 8.5 percent growth in GDP and at the
same time curtailing all big spending. This is the
quandary that the finance minister expects the
common man to understand, and this is what
will not be in the noise that even the pink dailies
will not explain on Page One.
Not tinkering with the tax rates for the middle
class or asking them to take care of themselves
may not go down well. But some things will long
be remembered - as the strokes of Chris Gayle
- after the pink newspapers have become packing papers and the noise in the studios shift to a
new controversy.
i) For instance, laying down a roadmap for
reducing corporate taxes, and reforming the
corporate tax structure by removing exemption. This is Jaitleys 'saral' taxation attempt for
the corporates. This will occupy centerstage in
industry associations as they lobby heavily for
retaining the exemptions. Tax consultants who
position themselves as management consulting

firms will be in the forefront of this charge, half
a league, half a league at a time. Their tax advisories business will be hit and this makes up the
bulk of their revenues.
ii) The move to create a super regulator through
the merger of the Securities and Exchange
Board of India and Forward Markets Commission will reduce regulatory positions, grey
area between two derivative markets and also
scams (remember Financial Technologies and
National Spot Exchange). Moreover, Jaitley has
elevated the Sebi to a status higher than the RBI
as it will get more resources, people and powers. It also makes the finance ministry more
powerful as the Sebi chairman finally reports to
the finance minister. It also sets the roadmap
for UK Sinhas successor at SEBI. It creates so
many possibilities, consolidation or mergers
of exchanges. Resulting in a seamless market, arbitrage opportunities across exchanges,
instruments, stakeholders, traders across the
world would be rejoicing. Expect consolidation
in trading teams in brokerage firms, etc.
d) A bankruptcy law a first for the country that

will ease the process of closure of NPAs. Kingfisher and several companies in the recent past
have taught us that the banks need this law
more than they need anything else. If it allows
them to seize management control from dubious promoters and recover funds this law is
needed asap. A tremor would have gone up the
spine of several promoters who have siphoned
off bank loans with impunity.
The author is is a senior journalist and policy
commentator based in Delhi. He tweets @yatishrajawat
c) By creating a national infrastructure fund,

Jaitley is for the first time opening up the floodgates to long-term fund to participate in the
India opportunity. Pension funds and sovereign
funds will follow this development closely. Expect roadshows unlike the ones which the UPA
government did in its first term. But it wont be
easy as any private equity fund manager will
tell you. Dont expect an immediate closure as it
will easily take 12-18 months. It will take all the
marketing skills, tax arbitration moves, sovereign guarantees to sell this fund. It wont be
easy, but it will be something just right for the
minister of state for finance Jayant Sinha.
Budget 2015 does nothing spectacular
for the health of the economy

Pawan Khera, Mar 1, 2015
oth on the expenditure and revenue side,

a budget has to be judged by what it
does to the maximum number of people. Corporate India responded to the 2015-16
budget with an apprehensive smile. It loves the
postponement of GAAR and removal of wealth
tax but is unsure of what the new law on black
money will imply. It has brought a sadistic smile
to the inspectors and the bureaucrats of the
CBDT. Markets have a confused frown.
And the middle class has several questions to
ask. How will this budget see the reduction of
prices of essential commodities and more money in their pockets? Will the increase in service
tax not make a hole in its pockets and disincentivise consumption? What would be the inflationary implication of the increase in customs
duty on commercial vehicles from 10 percent to
40 percent? The underlying assumption behind
reducing corporate tax is that the money thus
saved will be reinvested by the corporate. If the
tax slabs were rationalized, wouldnt the same
premise work for personal tax? The money thus
saved would have boosted consumption.
Will the top 100 richest Indians end up paying
higher taxes? The banking sector was looking
up to the FM for recapitalization and easing of
the massive bad debts that have slowed down
lending, slowing the investment cycle down.
Where are the labour reforms? Likewise, the
manufacturing sector was looking at both shortterm kickstart and a long-term push.
The underlying projection of this budget is 8.5
percent growth and 3 percent inflation. Are
these projections realistic? Last year, presenting
the interim budget, Arun Jaitley had set the Fiscal Deficit at 3.6 percent. Today it has been put
at 3.9 percent. India has become an impatient
country. The campaign driven politics and governance of Narendra Modi makes Indians start
taking the words of politicians seriously. This is
a PMO budget and was hence expected to be a
delivery budget.
On the eve of the budget itself, the Chief Economic Advisor was very realistic in helping us
moderate our expectations.
The proposed Investment and Infrastructure
Fund has brought a mild cheer to the industry
but the atmosphere for investments does not
see a big change. For fiscal deficit to be brought
down, the government must trigger the investment cycle. Without any reduction in interest
rates, it does not seem possible. Investments
have not kicked off in the last eight months
(from 38 percent to 32 percent).
Where is the blue print for a double digit

growth?
DBT and GST are the only two major reforms
being tom-tommed. Were they brought in by
this government? The FFCs recommendation
of fiscal federalism increases the states revenue
but at the same time puts the onus of failure on
them.
The budget does nothing spectacular for the
health of the economy. Only the stock markets
can continue to be sentiment driven. Manufacturing and infrastructure need more than just
sentiment and slogan. The government must
emerge from its legacy obsession.

The attractive pre-election campaign on minimum government does not get reflected in the
budget. The size of the budget remains the same
with the balance shifting more towards corporates but without any promise for either a boost
in investments or growth. The budget comes
across as a transaction between those who pay
taxes and those who recover taxes. The rest do
not matter and can do with crumbs.
Experts have complimented the government for
its pro-growth vision. The difference between
a long-term vision and an actual deliverable is
the difference between philosophy and religious
faith. Everyone likes the concepts of Nirvana
and spending life after death in the heaven
above, but everyone wants a promotion, a house
and a car from his or her God here and now.
Pawan Khera is associated with the Congress
and the views expressed are his own
Budget 2015 has two game-changers that
will make India a global financial hub

Gautam Chikermane, Mar 2, 2015
run Jaitley's Budget 2015 is bold in its

stance, futuristic in its approach, and
above all, reformist in its spirit. While
there will be much written and critiqued on its
boldness (a frontal attack on black money, for
instance) and future-preparedness (the fall in
corporate taxes to 25 percent in four years from
30 percent today), I will look at a two megareforms, both financial, that his Budget has
unveiled.
The first looks inward at the domestic financial

sector. Under this, the major reform is placing
consumers of finance, the average household,
at the centre of all laws. "A properly functioning
capital market also requires proper consumer
protection," Jaitley said. "I, therefore, propose
to create a task force to establish a sector-neutral Financial Redressal Agency (FRA) that will
address grievances against all financial service
providers."
As consumers, all of us would have experienced
the push towards an insurance product when
we went to invest in the Public Provident Fund
or a mutual fund. In an environment of institutionalised mis-selling, we dont know where to
go, whom to complain. All we seek is a return on
investment at a low cost and transparent architecture. Under the FRA, we will have a single
complaint management agency to go to.
The FRA will setup a nationwide machinery to

become a one-stop shop where consumers can
carry complaints against all financial firms, the
Financial Sector Legislative Reforms Commission (FSLRC) report states, and which Jaitley
has started actioning. Gone are the days of
running from one regulator to another as firms,
wearing the garb of universal banking, wreaked
havoc on the savings of Indians. Who, for instance, is liable for a mis-sold insurance policy
by a bank --- banking regulator RBI or insurance regulator Irda? The answer now will be:
FRA.
But Jaitley doesnt stop his reform at simply
the creation of one more regulator. There is a
thought-through system behind it - the Indian
Financial Code (IFC). I am also glad to inform
the House that work assigned to the task forces
on the Financial Data Management Centre, the
Financial Sector Appellate Tribunal, the Resolution Corporation, and the Public Debt Management Agency are progressing satisfactorily, he
said. We have also received a large number of
suggestions regarding the IFC, which are currently being reviewed by the Justice Srikrishna
Committee. I hope, sooner rather than later, to
introduce the IFC in Parliament for consideration.
This is big - really, really big. In effect, the IFC
disrupts existing regulatory structures and recreates a more cohesive, more accountable financial architecture that oversees nine important
moving parts - consumer protection, micro-prudential regulation, resolution, capital controls,
systemic risks, development and redistribution,
monetary policy, public debt management, and
contracts, trading and market abuse.
The IFC is one law that alone is a giant reform.
By placing the consumer at its core, the IFC
completely changes the contours of Indias
financial sector that so far has been held hostage to companies that thrive on anomalies
and regulators too busy playing turf-wars than
focusing on customer services and protection.

From financial repression to legitimising misselling, IFC will hopefully change that for good.
Centre, popularly known as the Percy Mistry

report, in 2007.
That said, it wont be easy to implement. The

IFC is an extremely bold law to enact: all told
it will replace 61 existing laws - no, you didnt
misread that, the number is sixty-one - and the
NDA government will need all its political skills
and then some to convert this idea into a living
reform. It will be opposed within and outside
Parliament.
Mumbai has remained where it was but GIFT

has taken root in Gujarat. GIFT is a globallybenchmarked international financial centre that
will target 8-10 percent of financial services on
84 million sq ft of space and create one million
new jobs - 30,000 by 2016 from 700 today. Its
core operations will include offshore banking;
insurance, assurance and reinsurance; regional
financial exchanges and back offices.
Behind each of these laws stands a large community of vested interests backing it and the
fight to repeal or amend them will be fought
tooth and nail. Not just individuals like insurance agents or companies that benefit from
weak regulations, but dont be surprised if
pushback to these reforms comes from some of
the regulators themselves, notably the Reserve
Bank of India and the Insurance and Regulatory
Development Authority of India.
Since an international financial centre, of the

likes of London, Singapore or Dubai, cant just
live on money, GIFT is being created as a smart
city with schools, hospitals, clubs, entertainment centres and so on to attract top talent
from across the world. The urban infrastructure
being planned is world class. The only question thats being repeatedly asked by executives,
both Indian and foreign, is: since it is located in
a state of prohibition, will booze be available?
Ironically, the two keywords the vested interests

will use to scuttle the IFC will be "public interest".
Indias international financial centre will occupy the time zone thats currently lying vacant,
between Singapore to the East and Dubai to the
West. But thats only semantics. If it rises to
the occasion, it will be able to pull back a lot of
markets that India has lost. Much depends on
execution, some of which has begun. Phase 1,
for instance, is in an advanced stage of completion, and institutions such as World Trade Centres, State Bank of India, and a Bombay Stock
Exchange tower have already committed to it.
The second mega-reform looks outward and

eyes the global financial sector. "While India
produces some of the finest financial minds,
including in international finance, they have
few avenues in India to fully exhibit and exploit
their strength to the countrys advantage," Jaitley said. GIFT (Gujarat International Finance
Tec-City) in Gujarat was envisaged as International Finance Centre that would actually become as good an International Finance Centre
as Singapore or Dubai, which, incidentally, are
largely manned by Indians. The proposal has
languished for years. I am glad to announce
that the first phase of GIFT will soon become a
reality. Appropriate regulations will be issued in
March.
Although the need for an international financial
centre had been felt for a long time, ever since
India opened up in 1991 and Indian companies
began to expand their footprint globally, this
is an idea that has taken all of eight years to
turn into reality. The idea was planted in the
Report of the High Powered Expert Committee
on Making Mumbai an International Financial
These two reforms go hand in hand and seem

to be part of a larger plan. Together, they are a
game-changing reforms. While the IFC rebuilds
the domestic financial architecture, GIFT becomes a hub for international finance. These are
also in tune with the larger objectives of Make
in India, an endeavour that will need finance
in order to gather momentum. These are not
incremental, but mega-reforms and will reshape
the contours of India as it becomes the worlds
fastest-growing modern economy.
Budget 2015 low on big bang reforms;
theres not much for housing
Anuj Puri, Mar 1, 2015

n this year's budget, the Finance MinisSmart Cities in the country.
ter has conveyed a message wherein the
benefits lie only in the fine print. For the
GST: The Finance Minister has announced that
common man, though the cumulative savings
GST will commence from the next financial year
implied by various provisions are stated to be
and has increased service tax and central excise
to the tune of Rs. 4.44 lakh, this is assuming a
duty as a preparatory measure for its deploycertain magnitude of personal investments into ment. This puts an end to the speculation on
pension funds and health insurance.
when GST would finally become a reality.
The budget has not provided any additional
relief via increased income tax deduction limit

or on repayment of housing loans. The regime
on these fronts, which was announced during
the previous budget from eight months ago
remains unchanged. This is a disappointment,
since there were expectation that the Finance
Minister would further increase either or both
of these limits and thereby address the reality of
high property prices in India.
The budget is low on big bang reforms
and real estate is only an indirect beneficiary at best:
Smart Cities: The budget did not provide any
details on this initiative taken by the Government. Factors such how it will define these cities
and which cities have been identified remain
unclear. However, increased allocations for railroad development, penetration of education and
training centres and towards the Digital India
initiative could contribute to the shaping of
REITs: The Finance Minister has said that he

proposes to rationalise the capital gains regime
for REITs, but has not given any specifics. This
could mean that the sponsor of a REIT may get
a one-time capital exemption in exchange for
units, but this needs to be confirmed.
Wealth Tax: Wealth tax has been eliminated
and a new Super Rich tax has been put in place
with an applicability limit of Rs. 1 crore, which
is significantly higher than the erstwhile Rs. 30
lakh (in India, a major share of personal assets
are in the form of real estate, particularly in the
urban areas, where real estate prices are very
high.) Effectively, this new measure implies
that a lot of urban housing stock is out of the
purview of the new Super Rich tax, and this is a
relief for the common man. Only houses priced
above Rs. 1 crore will now be taxable.
Transparency: Incentivising usage of wired
money rather than cash transactions has significant pertinence to real estate, which is one
sector where cash transactions have been impacting transparency. Another boost to transparency in the real estate sector is the enhanced
punitive measures which will now be taken on
concealment of assets, including benami properties.
Visa on Arrival: The visa on arrival program
has been increased to cover 150 countries from
the previous 43, which will lead to a huge step
forward for tourism in India. This is a huge plus
for hospitality real estate and will also significantly amplify destination retail in the country.
Anuj Puri is chairman and country head, JLL
Budget 2015: Jaitley adds sparkle to gold,
encourages buying and selling of yellow metal

Salil Panchal, Mar 1, 2015
he Narendra Modi-led government on

Saturday announced measures which
could change the dynamics of Indias
gold market. While presenting the Union Budget, Finance Minister Arun Jaitley encouraged
people to sell gold and earn returns, rather than
hoard it. In recent years, due to concerns over
the countrys rising trade deficits, policymakers
and the Reserve Bank of India had introduced
steps to discourage imports of the yellow metal;
the central bank was concerned that gold was a
dead investment.
Jaitleys fresh announcement to introduce a

gold monetisation scheme, a sovereign gold
bond and steps to boost recycling of gold are indications that gold has become acceptable as
an investment to both consumers and the government, experts said. The move is also a direct
step to push gold from being a non-productive
asset to a productive one, once it comes back
into the financial system, they said.
associate director at Angel Broking.

The monetization scheme will allow the seller
to earn interest on the gold deposited with the
bank. It would obviously also boost business
for banks, gold-loan companies and recognised
institutions. Similarly, consumers could also opt
for a sovereign bond scheme, where the bond
would carry a fixed rate of interest and would be
redeemable in cash.
The details of the monetisation scheme would
be disclosed soon, but might be similar to
schemes introduced in other countries. The consumer could get gold melted or sold at a fabricator and then be issued a certificate, where details of the quality and amount of gold would be
mentioned. Once a bank account was opened,
the consumer could earn returns on this investment, similar to a fixed deposit.
Indians have for decades used gold as a form of
investment to beat inflation. But it has rarely
been plowed back into the financial system, as
people simply kept gold in lockers or at homes.
India is the second largest consumer of gold
in the world after China and the WGC estimates that the total stock of gold held by Indian
households is 22,000 tonnes.
These announcements will help change the

dynamics of gold in India. It will align the way
in which households and the government looks
at gold and the role it plays as an asset, said
World Gold Council (WGCs)s India managing
director, Somasundaram PR.
Gold will now move from the unproductive
zone to a productive one, said Naveen Mathur,
Union Budget 2015: Jaitley just unleashed
a war on black money like never before

N Madhavan, Mar 1, 2015
he Narendra Modi government has unleashed a war on black money like never
before. A new law with very heavy penalties has been promised.
The first and foremost pillar of my new tax

proposals is to effectively deal with the problem
of black money which eats into the vitals of our
economy and society, Finance Minister Arun
Jaitley said while presenting the first full-year
Budget of the NDA government. Tracking
down and bringing back the wealth which legitimately belongs to the country is our abiding
commitment to the country.
The existing legislations, Jaitley admitted, were
inadequate and said a comprehensive new law
to specifically deal with black money parked
outside the country will be introduced soon. It
will impose a punishment of rigorous imprisonment of up to 10 years for concealing income,
assets and evasion of tax in relation to foreign
assets. The offence will be made non-compoundable and offenders will not be permitted
to approach the settlement commission. Whats
worse, the penalty will be 300 percent of the tax
evaded.
Non-filing of returns or filing them with inadequate disclosure of foreign assets will be liable
for a rigorous imprisonment of up to seven

years. To overcome the problem of instances
where the government cannot confiscate an
asset abroad, the law also allows the government to attach or confiscate equivalent assets
in India. To ensure that no more (illegitimate)
accounts are opened in foreign banks, the law
will make it mandatory for those opening such
accounts to disclose the same in their annual
tax returns. The Foreign Exchange Management
Act is also being amended for the purpose.
The fight against black money is not restricted
to assets/income abroad. A more comprehensive Benami Transactions (Prohibition) Bill is
on the way. This will help in the confiscation of
benami properties and provide for prosecution
of the benamies. Through this law, the government hopes to put an end to the parking of
black money through the benami route.
That is not all. The Finance Bill has a provision that prohibits acceptance or payment of
an advance of Rs 20,000 or more in cash for
purchase of immovable properties. Most importantly, quoting of the PAN number has been
made mandatory for all purchases exceeding Rs
1 lakh.
Says Daksha Baxi, Executive Director, Khaitan
& Co, The FM has recognised the inability
of the government to bring the black money
stashed abroad back to India in the absence of
specific legislations. The introduction of the
law which will give the government the ability to cease or confiscate Indian assets for the
money lying in foreign accounts illegitimately
should certainly address this issue. For the first
time, the government has provided strongly
against black money by providing for criminal
prosecution, imprisonment to offenders and
300 percent penalty on tax avoided. Such harsh
measures should act as a significant deterrent to
keeping the illegal monies outside India.
Encouraging and facilitating transactions

through credit and debit cards and disincentivising cash transactions should help in curbing
generation of domestic black money, she added.
This article was first published in Forbes India
Union Budget 2015: Jaitley brings
cheer for banks and NBFCs

Salil Panchal, Mar 1, 2015
inance Minister Arun Jaitley on Saturday

announced a slew of measures which
experts said would help energise the
banking system further, power recovery of loans
and streamline decision-making.
up an autonomous Bank Board Bureau. This

would be an interim step towards establishing
a holding and investment company for banks.
This was one of the key recommendations made
earlier by the PJ Nayak Committee relating to
autonomy of public sector.
Banks would be better placed on how capital
would be deployed and it will encourage them
to evaluate their capital requirements and strategies to raise funds, said Rakesh Singh, CEO at
Aditya Birla Finance.
One of the steps announced by the minister

while presenting the Union Budget was to allow non-banking financial companies (NBFCs)
registered with the Reserve Bank of India (RBI),
and those of Rs 500 crore size or more, to be
allowed to use The Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest (Sarfaesi) Act 2002.
This move would place NBFCs on par with
other institutions like banks and other financial
institutions, said Shanti Ekambaram, president (consumer banking) with Kotak Mahindra
Bank. The NBFC step is part of Jaitleys broader
thrust relating to bankruptcy and disclosures,
she said. It would make recovery of loans
smoother for NBFCs and benefit most of the
large players like L&T Finance, Shriram Transport Finance and various housing finance companies, experts said.
Some functions which the RBI carried out,

relating to the monetary policy and battling
inflation, have also been streamlined. Jaitley
announced steps to amend the RBI Act and provide for a monetary policy committee. The committee may include representatives from the
RBI and the government, whose focus would
be to keep inflation below 6 percent, which has
already happened, experts said.
Targeting inflation was always a priority for
the RBI and the government, so this committee could help to streamline decision-making
and ensure that all the concerned parties are on
the same page, said Siddhartha Sanyal, chief
economist with Barclays Capital. The committee
may include representatives from the RBI and
the government, whose focus would be to keep
inflation below 6 percent, which has already
happened.
Another key amendment announced by Jaitley

was to boost the governance of public sector
banks. The government said it planned to set
Budget 2015: One time deviation from fiscal

target is OK, Jaitley has no excuses in 2016
Seetha, Mar 1, 2015
re fiscal fundamentalists right to be

worked up over finance minister Arun
Jaitleys decision not to stick to the laid
down fiscal path?
On the face of it, the decision is a realistic one.
He could have stuck to the glide path goal of 3.6
percent of gross domestic product (GDP) this
year and earned himself applause from rating
agencies.
Given this, it was right for Jaitley to modify the

glide path somewhat, and keep the fiscal deficit
at 3.9 percent of GDP.
He was perfectly right in saying, Rushing into,
or insisting on, a pre-set time-table for fiscal
consolidation pro-cyclically would, in my opinion, not be pro-growth.
Jaitleys predecessor P. Chidambaram also
paused the implementation of the Fiscal Responsibility and Budget Management Act because of the recommendations of the Twelfth
Finance Commission, which gave a far lower
share of taxes to the states.
But Chidambaram splurged the fiscal space he
got on farm waivers and poorly designed welfare schemes, which brought more problems in
their wake.
Jaitely, in contrast, has said very clearly: The
additional fiscal space will go towards funding
infrastructure investment.
The 3.6 percent fiscal deficit target for 2015-16

was set before the Fourteenth Finance Commission shaved off Rs 5.24 lakh crore from the centres tax kitty and gave it to the states. Another
Rs 3.04 lakh crore will go by way of grants and
plan transfers. So, as Jaitley said in his speech,
62 percent of the total tax receipts of the country will go to the states.
He has budgeted a 25 percent increase in capital

expenditure over the revised estimates of 201415 (which was lower than the budget estimate
by 15 per cent). Revenue expenditure is set
to increase by just 3 percent over the revised
estimates. In absolute terms, this is a welcome
redirection of expenditure from consumption to
investment.
But this government was also faced with a huge

challenge that of reviving economic growth
and pushing investments.
But seen in relation to GDP, it does not seem so

great. As a member of the Fourteenth Finance
Commission, M Govind Rao has said in Financial Express, that capital spending is 1.7 percent
of GDP, much the same as in 2014-15.
Given the subdued sentiment in the private sector and the cold response to the public private
partnership (PPP) route, public investments
had to step in. This was something emphasised
in both the Mid Year Economic Analysis as well
as the Economic Survey which spoke about public investment playing a catalytic role.
And revenue deficit the real problem area

continues to be 70 percent of the fiscal deficit,
the same as in 2014-15.
And there are some worrying signs on revenue
assumptions. Gross tax revenue is expected to

grow 6.2 percent but after devolution to the
states, the Centres tax revenue is set to decline
1.2 percent, thanks to the Finance Commission
recommendations.
Hopefully, there is no overestimation as there
was the last time around. Non-tax revenue
growth is also not pitched too high 1.7 percent.
Jaitley seems to be relying too much on receipts
from disinvestment Rs 69,500 crore. Will the
government get it if it confines strategic sales
only to loss making units?
A lot of savings will come from the Centre deciding to discontinue spending from its kitty on
eight schemes National e-Governance Plan,
Backward Regions Grant Funds, Modernisation of Police Forces, Rajiv Gandhi Panchayat
Sashaktikaran Abhiyan, Scheme for Central Assistance to the States for developing export infrastructure, scheme for setting up 6000 model
schools and National Museum on Food Processing and Tourist Infrastructure. Hopefully there
will be some additions during the year.
creative accounting.
But like always it has come at the cost of capital
expenditure theres been a 15 percent cut over
the budgeted estimates. The subsidy bill is down
too, but once again it is on account of lower oil
prices which brought down both the fertiliser
and petroleum subsidies.
The food subsidy bill was supposed to bring in
considerable savings because of the delayed
rollout of the National Food Security Act but
that didnt happen. The revised estimates of
food subsidy are 6.6 percent higher than the
budget estimates.
But a course correction seems to be on the cards
this year. Pressure has to be kept up on the government to stay this course.
Revenue expenditure needs to be pruned and
subsidies are the only item that lend themselves
to pruning. Jaitley will be excused for deviating from the glide path this year. He will not be
excused if he strays again.
Jaitley has also pruned the subsidy bill it is

down 8 percent over the revised estimates of
the current year. Its share in tax revenue is also
coming down 31 percent in 2013-14, 29 percent in 2014-15 and 26 percent in 2015-16.
But much of the savings are coming on the petroleum subsidy front. Both food and fertiliser
subsidy are set to increase.
It would be good if the government takes steps
through the year to bring spending on these two
items down as well, not by cutting subsidies to
the deserving but by excluding the non-deserving and going full steam ahead on the JAM trinity for cash transfers.
One can take heart from Jaitleys statement:
We need to cut subsidy leakages, not subsidies
themselves. We are committed to the process of
rationalising subsidies based on this approach.
Finally, how did the government achieve the
very stiff fiscal deficit target? Well, at the first
sight, it does not seem to be the result of any
Budget 2015: One time deviation from fiscal

target is OK, Jaitley has no excuses in 2016
FP Editors, Feb 28, 2015
ew Delhi: Aviation has been largely ignored in the Union Budget for 2015-16,
as most of the sector's demands such as
giving airlines infrastructure status and bringing down taxation on MROs have been ignored.
Besides, air travel in business class or first class
could get more expensive as the rebate available
earlier has been reduced.
and general aviation have been ignored. "Higher

service tax will enhance airfares. Loss of MRO
revenue, jobs and taxes to Sri Lanka, ASEAN
and the gulf countries will continue, Amber
pointed out.
CAPA's Kapil Kaul said he was not expecting
anything from the Budget "and the FM has not
surprised me. Aviation continues to be completely ignored and a low priority".
The only positive could be a proposal to increase visa-on-arrival to 150 countries since this
could boost tourism and therefore aviation in
the country. Moving towards a unified regime of
GST will also help in unifying the taxes across
the country and will be helpful to the aviation
sector.
Also, it remains to be seen if the announcement by Finance Minister Arun Jaitley that this
Government may look at divestment or strategic
sale of loss making PSUs could have any implication for the ailing Air India. For 2015-16,
Jaitley has provided only Rs 2,500 crore against
the airline's demand of Rs 4277 crore. Air India's net loss came down to Rs 5,389 crore in
FY14 compared with Rs 5,490 crore in FY13 and
Rs 7,559.74 crore in FY12.
In the Budget, Rs 80 crore has been provided to
the Airports Authority of India, of which Rs 22
crore has been earmarked for the new Greenfield airport coming up in Pakyong, Sikkim.
Amber Dubey, partner and India head, aerospace and defence, KPMG, termed the Budget
as a disappointing day for aviation. He lamented that long pending industry demands of tax
rebates on Aviation Turbine Fuel, Maintenance
Repair and Overhaul services (MRO), airports
Union Budget 2015: Jaitley dumps Rs 1,000 crore
into Nirbhaya fund, but who is going to use it?

Piyashree Dasgupta, Feb 28, 2015
ven before Finance Minister Arun Jaitley

could catch his breath after delivering
his budget speech, he had been pronounced the champion of economic reforms
in India by Twitter, with the Modi government
treated to resounding applause.
However, in the budget which was promptly
labelled 'Big Bang' by observers, women's safety
didn't feature in any significant way.
1,000 crore to the Nirbhaya Fund."

Though the various social security schemes pertaining to women were allotted Rs 79,258 crore,
provisions to boost women's safety will have to
covered by the Nirbhaya fund.
Last year, the government had allotted a total
Rs 200 crore to enhance women's safety. Rs
150 crore was allotted for making cities safer for
women and Rs 50 crore was allotted towards
making public transport safer.
However, in the ensuing year, we witnessed
headline-grabbing cases of sexual assault. From
the rape of an upper middle class woman in
a Uber Cab in Gurgaon to the brutal rape and
murder of a Nepali domestic help's sister in Rohtak, sexual violence showed no signs of abating
in the country.
The only occasion when Jaitley mentioned

women's safety was when he added Rs 1,000
crores to the existent Rs 1,000 crores in the
Nirbhaya fund. The fund, which was instituted
by the UPA government in 2013, was carried
forward by Jaitley last year. However, in the two
years after it had been created, not a penny has
been spent from it.
This is mystifying, especially considering the
fact that the budget for the hyped Rape Crisis Centres have been slashed right before the
tabling of the Union Budget. While last year,
Maneka Gandhi promised 660 rape crisis centres, the number of the same has reportedly
been slashed to 36.
In his speech, Jaitley said, " In order to support
Programmes for women security, advocacy and
awareness, I propose to provide another Rs.
Except, for announcing the Rape Crisis Centres and some small cosmetic initiatives, no big
schemes, awareness drives or support infrastructure was built in the last year. Let's say the
Modi government followed in the footprints of
all the earlier governments, making vacuous announcements that were hardly followed up with
action.
This year round too, women's safety figured
for a fleeting moment in the budget, with no
schemes or initiatives announced by the FM
himself. If the women and child development
ministry's track record in the area is anything
to go by, adding Rs 1,000 crore to the Nirbhaya
fund seems like a patchwork on the ministry's
dismal performance in the last year.
Jaitley has effectively eased the burden of women's safety off his shoulders by announcing an
impressive amount of money for the purpose
of safety. Now, he can conveniently point at
the women and child development ministry in
terms of how they plan to use it.
However, we can safely say that the Nirbhaya

Fund represents all that is wrong with the government's approach to women's safety.
First of all, the name, steeped in melodrama, is
actually a theatrical expression of how committed the government is to the cause of women.
Invoking the memories of the December 16
gang-rape victim, who died a cruel death, the
government's commitment to the cause of her
clan seems to have ended with the nomenclature. In this case, perhaps, the NDA can thank
UPA II for making its job easier.
If anyone ever asks, "what has the government
done for women's safety in India?", ministers
and politicians can enthusiastically point at
the Nirbhaya Fund and the Rs 2,000 crore in
its kitty. However, we are yet to come across a
credible model of spending the fund.
The Railways Minister has announced that a
part of the fund will be used to install CCTV
in trains, in the hope of making long distance
trains safer for women. Now we all know the
plight of CCTV cameras in government properties to find that reassuring.
The Rape Crisis Centres was a move in the right

direction, however, this iniative seems to have
fallen out of favour with the government. One
has to remember that unless stepping out of
homes and working becomes safe for women
across the country, there's now way any social
development or security scheme will be successful. For example, how does the government
envisage the success of a scheme like "Beti Padhao" when said girls can't step out and go to a
school or college without fear of getting sexually
assaulted?
How are women supposed to participate in
the work force, take advantage of government
employment schemes when public travel and
public spaces themselves are becoming hostile
and unsafe, increasingly?
'Nirbhaya' means fearless. The government
should realise, that is something most Indian
women don't dare to be. And they are doing
nothing to change that.
What we perhaps need first, is a large scale

sensitisation programme for the police force,
who continue to bungle while dealing with cases
of sexual violence. Then we need to strengthen
the police force and induct more women into
it. Large stretches of even cities have no security, one can imagine how pathetic, the safety of
women is in rural and suburban areas.
Arun Jaitleys Budget 2015 is

lukewarm to the green energy sector
Shravan Bhat, Feb 28, 2015
udget 2015 failed to provide any concrete road map for the government's
ambitious green energy targets. Finance
Minister Arun Jaitley shared no details on the
implementation and financing of solar, wind,
biomass and hydro energy projects in the country.
Technology.
Anmol Jaggi, director, Gensol Consultants, says,
"The excise cut on copper wire and tin alloy
for solar PV cell manufacturing is again a good
move but the impact on project cost is not even
0.5 percent."
India is today a 1,000 MW per year solar market; the government wants to increase this 100
times in the next seven years.
"Unlike rail and roads, tax-free bonds have not
been specifically proposed for renewable energy," says Anish De, partner infrastructure and
government services, KPMG India. "Given this,
any funds from tax-free bonds will now have to
come out of the general pool of infrastructure
bonds," he says.
"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," said
Jaitley in his speech. However, these targets
had already been announced over the past few
months. Budget 2015-16 has thus met with a
lukewarm response from the renewable energy
industry.
In the solar energy space the government is
keen to attract private sector investment but
financing, land acquisition, policy instability
and grid efficiency continue to hold back installation of capacity and generation of power. The
Budget did not incentivise investment or manufacturing in the solar sector other than an excise
duty cut on round copper wire and tin alloys for
use in the manufacture of Solar PV ribbon (used
in solar PV cells), subject to certification by the
Department of Electronics and Information
The Finance Minister on Saturday proposed

to increase the Clean Energy cess from Rs 100
to Rs 200 per metric tonnes of coal, etc. to
finance clean environment initiatives. But "the
proposals for the utilisation of funds from the
increased coal cess are yet to be spelt out," says
De. "It would have been better to propose specific allocations and measures for renewable energy, especially on availability of low cost funds
for the renewable energy sector."
"Another big expectation from the Budget was
a reduction in the MAT (Minimum Applicable Tax)," says Jaggi, "However it hasn't been
changed and renewable energy companies shall
continue to pay 18 percent MAT even though
there are said to be exempted from income tax."
Prime Minister Narendra Modi, a keen proponent of solar energy in his home state of
Gujarat, has been proactive on the renewable
energy front and there is tremendous optimism
from the private sector. This years Budget has
failed to walk the talk though.
Budget 2015: Jaitley puts focus on

digital connectivity to drive rural growth
Debojyoti Ghosh, Feb 28, 2015
inance Minister Arun Jaitley announced

a slew of proposals to boost the Digital
India programme during his Budget
speech on Saturday as the government bets big
on bringing in investments to bolster the technology and telecommunications infrastructure
in the country.
Experts feel the initiative to provide broadband
connectivity to 2.5 lakh gram panchayats by December next year is a transformative step taken
by the government to connect rural citizens in
information-dark areas of India.
In a massive way, this programme, will transform how the common man connects with the
government, healthcare, education and jobs. Its
an ambitious project. I think the pace at which
they are trying to implement is very ambitious,
Ravi Gururaj, chairman, Nasscom Product
Council, told Forbes India, adding that the
move is in the right direction. Today, connecting digitally is an absolute necessity and not an
option anymore, he said.
While presenting the Union Budget 2015, Jaitley pointed out that the national optical fibre
network (NOFN) programme will be launched
across India covering a stretch of 7.5 lakh kilometres.
We are making good progress towards making
Digital India. The national optical fibre network
programme (NOFNP) of 7.5 lakh kms networking 2.5 lakh villages is being further sped up by
allowing willing states to undertake its execution, the finance minister said in his Budget
speech. The government plans to provide highspeed 100Mbps broadband connectivity in
villages. Typically, optic fibre networks form the
basic infrastructure needed for broadband connectivity.
har will be given a priority, Jaitley noted.

However, some are of the opinion that the Digital India programme has to be more holistic.
You must bring in Digital India into education.
Young children should be provided with tablets;
that is not announced. E-governance should
come to villages, but it is going to take time. Yes,
there is a movement forward in Digital India
but there could have been more, said TV Mohandas Pai, chairman, Manipal Global Education Services.
With the changing landscape in technology,
digital has become mainstream as corporations
and government invest heavily in digitised solutions to drive growth. According to Nasscom, in
FY15 digital solutions accounted for 12-14 percent of the Indian IT industrys overall revenue.
For the domestic market, governments investment in technology of $26 billion is the key
driver of growth in the current fiscal year.
The governments initiative in the digital space
will also drive growth in the technology industry as more than half a billion people will come
online fuelling growth in areas such as digital
commerce, content creation and skill development, said Gururaj.
During his Budget speech, Jaitley allocated
Rs 150 crore for an IT hub to be created in the
country. The finance minister has also promised
a Rs 1,000 crore corpus to boost the startup
ecosystem in the country, particularly in the
technology space.
The initiative will start with Andhra Pradesh,

while the eastern states of West Bengal and BiCopyright 2012 Firstpost
Budget 2015: Jaitley just deepened
the crisis in public sector banks

Dinesh Unnikrishnan, Feb 28, 2015
umbai: The big shocker of the budget

came for state-run banks, especially
small and non-performing ones,
when Jaitley announced lower share of capital
for these entities and remained largely silent
on ways to recapitalise these entities, including paring the governments stake in state-run
banks.
The Rs 7,940 crore capital infusion announced
in the budget is nearly half of what state-run
banks require and lower than what the government committed for fiscal year 2015.
Even for last year, the government has so far
infused only about Rs 6,990 crore out of the
promised capital infusion of Rs 11,200 crore,
based on performance.
But raising money from the market wouldnt

be an easy task for smaller banks, since there
is very less investor appetite in these banks,
burdened with high bad loans and poor growth.
Except the large lenders, like State Bank of
India, not many lenders have been successful in
tapping private funds.
Traditionally, state-run banks are heavily dependent on government funds for capital. Logically, the reluctance of the government to infuse
capital would step up pressure on banks to seek
options to merge with large banks or shrink
their business size.
Jaitleys message is clear: Small government

banks, especially which rank lower in terms
of performance, will have to go to the market
to raise funds or get merged with other banks.
They neednt expect any capital from the government from now on.
Remember, the reasons for non-performance of

many state-run banks are not necessarily their
inefficiency in operations but the lack of their
autonomy. There have been frequent interventions by the government in their business decisions.
not offer a solution for banks in the short term,

especially in the backdrop of rising stress on the
balance sheets of banks.
These banks were used to roll out the populist

measures of governments loan waivers and
different forms of directed lending time to
time regardless of which government rules at
the Centre, unlike their rivals in the private sector. Hence, the government cannot escape the
responsibility of their current state.
One, majority of the government banks may

walk into deeper problems on account of capital
required to meet the Basel-III norms and provide for bad and restructured loans stipulated
by the RBI norms.
The absence of adequate capital infusion in

state-run banks would mean two things:
As Firstpost has noted earlier, the government

banks would need a substantial amount of capital to meet the mandatory capital requirements
under the Basel-III norms, to make provisions
for a sizeable chunk of stressed assets on their
books and to get ready for an expected pick up
in credit growth.
The estimated equity capital requirement for
state-run banks to meet the Basel-III norms
alone is about Rs 2.4 lakh crore.
Interestingly, even though the government has

cut down the capital infusion for banks, the
budget for 2015-16 has increased the farm loan
lending target for these lenders to Rs 8.5 lakh
crore or 14 percent of the total bank credit. This
has irked bankers.
As of end December, total gross bad loans of

banks stands about Rs 2.9 lakh crore. If one
combines this with the restructured loan stock,
the pile rise to over 10 percent of the total bank
loans. Lack of capital would deepen the crisis of
state-run banks.
"On one side, the government is not giving

capital and at the same time, they expect us
to lend more. Where is the money?" asked the
chairman of a state-run bank on condition of
anonymity. Even analysts have raised caution
on the lower-than-expected capital infusion.
Two, state-run banks with weak capital base

would limit their ability to lend to productive
sectors, essential for economic recovery. Weak
capital position of public sector banks would
logically push private sector banks to step up
lending. But, one has to wait and watch if private banks, which typically avoid high risk sectors, would do that. In the absence of adequate
bank funding, the expected recovery in growth
can get delayed.
"We were expecting an infusion of Rs 15,000

crore in banks this year to meet their Basel-III
requirements. What has come is much lower,
which will be insufficient for lenders to meet
the requirements," said Vaibhav Agrawal, vicepresident, research at Angel Broking.
In the absence of a recapitalisation roadmap,

the government, which owns more than 75 percent in 10 out of the 27 public sector banks, has
to either bring down its stake in government
banks below 51 percent to free up equity capital
in these lenders.
Even though the government has conceptualised forming a holding company to facilitate
capital mobilisation of state-run banks, this will
For now, Jaitleys silence has only contributed

to deepen the crisis in public-sector banks.
Budget 2015: Real estate investment

trusts will continue to be unattractive
Samar Srivastava, Feb 28, 2015
eal estate companies looking to list their

commercial real estate assets havent
had their task made any easier. Arun
Jaitleys Budget only catered to a tiny sliver of
their expectations.
domestic investors it will be a non-starter, says

Abhishek Goenka, partner, BMR and Associates LLP. Commercial assets in India yield 8-9
percent which is about the same as bank deposits and other debt instruments. With the same
yield, retail investors are unlikely to be buyers.
Foreign investors could still bite though. Rental
yields in India are among the highest in the
world. The supply of Grade A office spaces in
metropolitan clusters has increased considerably in the last five years. And with stability having returned to the rupee, investors can forecast
their returns much more easily.
First, the good news: Developers listing their

commercial assets as REITs (real estate investment trusts) will get a one-time exemption on
capital gains when the trust lists. So far, the
preferred route for developers has been private
equity players. (Blackstone has been a particularly aggressive buyer of office buildings around
the country.)
The industry has, for some time now, been asking for dividend payouts for REITs to be granted pass through status. What this means is that
the rental income from such assets will not have
any tax liability when returned to the investors
or unit holders. Usually, countries do not do tax
payouts by REITs as long as 90 percent of the
profits are returned.
In a country where the fascination for real
estate (and gold) runs deep, it had been hoped
that REITs would provide retail investors with
another avenue of investing in real estate. Unfortunately, that is still some time away.
Small retail investors are unlikely to bite. For
Budget 2015: Two simple graphs
explain how the govt spends every rupee

FP Editors, Feb 28, 2015
udget is about numbers, that too big

numbers. If you are finding it difficult
to make sense out of the millions and
billions, here are a simple graphic that explains
how the government gets its money and how it
spends it.
for the government. Another interesting point is

that Jaitley's first budget too had the same borrowing level - 24 paise.
The next big receipt for the government is
corporation tax - 20 paise. Jaitley's July 2015
budget too, it was so but was marginally higher
at 21 paise.
Income tax earnings stand at 14 paise, non-tax
revenue 11 paise, excise receipts 10 paise, service and oter taxes 9 paise, and non-debt capital
receipts 3 paise.
On the expenditure side, the major diffrence
this time (from Jaitley's last budget is) the outgo
towards states which have increased to 23 paise.
This is the biggest outgo for the government this
time. In the July budget, it stood at 18 paise.
As per the graphic, the government gets its

funds mostly from borrowings. For every rupee
that the government gets, 24 paise is raised
from the market as debt. What is interesting is
that 83 percent of this debt is used to pay back
the interest on the earlier debt borrowings. At
20 paise, this forms the second biggest outgo
So how has Jaitley managed to do this? He has

cut the plan assistance to states and union territories. In the last budget, this outgo was 15
paise, this time it has come down to 8 paise.
Check out the graphics below:
Why the FM is right in slowing

the pace of fiscal consolidation
N Madhavan, Feb 28, 2015
inance minister Arun Jaitley faced a major dilemma before presenting the Union
budget on Saturday. The Indian economy
was not seeing enough fresh investments which
was hurting present and future growth. In fact,
fresh investments in the economy have been
consistently slowing, from 34.7 percent (as a
percentage of GDP) in the first quarter of 201112 to 30.1 percent at the end of the second quarter of the current fiscal (2014-15).
According to the Economic Survey presented on

Friday, the lack of investments was largely on
account of stalled projects amounting to Rs 8.8
lakh crore, accounting for as much as 7 percent
of the GDP. Of this, only Rs 1.8 lakh crore belonged to the public sector companies. The bulk
of it, Rs 7 lakh crore, was from the private sector. The private sector, which is busy trying to
reduce its borrowings, is in no position to make
further investments.
This clearly called for a dose of public investments to re-energise the investment cycle and
get it going. The problem for the finance minister was funding this public investment considering the strict fiscal discipline road map. Some
economists had called for slowing the pace of
fiscal consolidation to give public investments
a boost. Many argued against it and warned
that it will upset the Reserve Bank of India. But
Jaitley chose to bite the bullet. I want to underscore that my government still remains firm on
achieving the medium-term target of 3 percent
of GDP. But that journey has to take into account the need to increase public investment.
The total additional public investment over and
above the revised estimates is planned to be Rs
1.25 lakh crore out of which Rs 70,000 crore
would be capital expenditure from budgetary
outlays. I will complete the journey to a fiscal
deficit of 3 percent in three years, rather than
the two years envisaged previously, the finance
minister said in his budget. The target that he
has set for the next three years is 3.9 percent
(2015-16), 3.5 percent (2016-17) and 3 percent
(2017-18) respectively. The additional fiscal
space will go towards funding infrastructure
investment, said Jaitley.
Pushing for public investment is certainly the
right thing to do especially when the private
sector investment pipeline is dry, says R Seashasayee, vice-chairman, Ashok Leyland Ltd.
The new GDP numbers revealed that the growth
was coming through efficiency and not from an
expanding economy. Without fresh investment
into the economy, this growth will start to slip
again.
Jaitley has also attempted to tackle another
important issue freeing up major infrastructure projects that are embroiled in various
litigations. The government will introduce the
Public Contract (Resolution of Disputes) Bill
to streamline institutional arrangements for
resolving various disputes. This will free up a
large number of infrastructure projects caught
in legal tangles. He has also promised to revisit
and revitalise the public-private partnership
model. These measures should give a fillip to
investment in the economy and more so, in the
badly needed infrastructure space.
This article was first published in Forbes India.
Analysed and annotated: Full text of FM

Arun Jaitleys Union Budget 2015 speech
FP Staff, Feb 28, 2015
inance Minister Arun Jaitley on Saturday presented the Narendra Modi governments first
full budget, promising to revive the economy from what he termed was a period of gloom.
The minister said the country was now the fastest growing economy and, earning praise from
Prime Minister Narendra Modi who said the budget was practical and pro-poor, pro-growth, promiddle class, pro-youth.
Among the highlights of Jaitleys speech were: No change in personal Income Tax, Health Insurance Premium deduction hiked from Rs 15,000 to Rs 25,000; for senior citizens to Rs 30,000,
transport allowance exemption hiked to Rs 1,600 from Rs 800 per month, additional 2% surcharge
on people earning over Rs 1 cr; Direct Taxes Code (DTC) dropped, Rs 50,000 deduction for contribution to New Pension Scheme, Corporate Tax cut to 25% over next four years.
Click on the image below to view the full text of the Budget speech:
Budget 2015: Chidu is wrong to

claim corporates are main gainers
R Jagannathan, Mar 1, 2015
he more-or-less glum faces in India

Inc even after the finance minister announced a four-stage cut in corporate
taxes from 30 percent to 25 percent over four
years tells its own story. It also gives the lie
to former Finance Minister P Chidambaram's
claims that the NDA budget is pro-corporate
and anti-poor.
Chidambaram wrote in The Economic Times:

The budget speech has shown great concern
for the corporates and income taxpayers (3.5
crore).Few countries have corporate tax rates
lower than 30 percent. According to the finance
minister, the effective rate is 23 percent. He
has promised them a 1 percent reduction every
year beginning 2016-17. That is a 'relief' of Rs
20,000 crore every year (Rs 80,000 crore in the
fourth year) over four years"
This is, of course, a selective reading of Arun
Jaitley's speech. Chidambaram is largely on
the wrong track, for what he has chosen not
to hear is crucial. The cut in corporate taxes is
supposed to be matched by reductions in direct
tax rebates and exemptions to companies. In
other words, what business gains in tax cuts, it
will lose out partially or wholly by a loss of tax
deductions permissible under the law.
Chidambaram has chosen to forget what Jaitley
actually said: "This process of (tax) reduction

has to be necessarily accompanied by rationalisation and removal of various kinds of tax
exemptions and incentives for corporate taxpayers, which incidentally account for a large
number of tax disputes."
The 2015-16 budget tells us where the big deductions are in direct and indirect taxes. The
major direct tax incentives given to companies
relate to deductions on export profits (revenue
foregone in 2014-15: Rs 18,394 crore); accelerated depreciation (Rs 37,010 crore) and deductions on power companies profits (Rs 10,607
crore), among others. Taking all such deductions in direct taxes, the government loses Rs
98,407 crore, and then recovers a part of this
through the minimum alternate tax (MAT). The
net revenue foregone in direct corporate taxes is
around Rs 62,399 crore.
Since the Rs 80,000 crore cut in corporate tax
over four years is to be accompanied by reductions in deductions, the net corporate gain after
eliminating all the deductions would be around
Rs 17,600 crore max.
But, of course, the government won't eliminate
all these deductions. It will try and balance the
revenue loss each year by reducing indirect tax
concessions. This is where the corporate gains
will be fully neutralised.
According to the budget documents, in 2014-15,
revenue foregone in excise and customs reliefs
to various sectors adds up to over Rs 4,86,452
crore. We dont know which indirect taxes
Jaitley will choose to raise to balance out his tax
concessions, but one thing is sure: the net gain
to companies will probably be zero or close to
zero.
What they will gain is essentially simplicity in
tax rates. This is what happens when you make
taxes lower, but eliminate complicated deducCopyright 2012 Firstpost
tions, which also lead to endless litigation on

whether the deductions claimed are right. It
also facilitates corruption.
Essentially what Chidambaram considers procorporate is actually anti-crony, and an effort to
remove discretion in tax treatment which will
eliminate the need for corruption.
Chidambaram also forgets one more thing. In
2015-16, the corporate tax rate has actually gone
up marginally. And this is the Jaitley sleightof-hand that he fails to recognise, since it goes
against his thesis of the budget being pro-corporate.
Under the guise of taxing the super-rich (those
with taxable incomes above Rs 1 crore) through
the a 2 percent additional income-tax surcharge, what Jaitley has actually done is raise
taxes for all companies earning more than Rs 1
crore of profits. He said: The rich and wealthy
must pay more tax than the less affluent ones.
I have, therefore, decided to abolish the wealth
tax and replace it with an additional surcharge
of 2 percent on the super-rich with a taxable
income of over Rs 1 crore. This will lead to tax
simplification and enable the department to
focus more on ensuring tax compliance and
widening the tax base.
This is how Jaitley managed to obtain Rs 9,000

crore of additional revenue when the total
number of individual taxpayers with taxable
incomes of over Rs 1 crore is barely more than
42,000. And this is a fact Chidambaram himself
knows, for he was the one who touted this figure
in his 2013-14 budget speech.
Chidambaram had said then: There are 42,800
persons let me repeat, only 42,800 persons
who admitted to a taxable income exceeding
Rs 1 crore per year. I propose to impose a surcharge of 10 percent on persons whose taxable
income exceeds Rs 1 crore per year. This will apply to individuals, HUFs, firms and entities with
similar tax status."
What Jaitley did was merely pull another fast
one on us a la Chidambaram. He used the idea
of soaking the rich to pinch corporates a wee bit
more.
The only way the budget is really pro-corporate
is that it promises more measures to make
doing business in India easier. Presumably,
Chidambaram is not against that.
Budget 2015: Draconian black money law
wont work without one-time amnesty

R Jagannathan, Mar 2, 2015
udget 2015-16 has a lot of things to

say on black money, and promises to
wield the big stick against black money
holders in India and abroad. Arun Jaitleys
announcements and proposed actions embed
three elements: one is to deter black money generation by disincentivising cash transactions;
the second is to improve the governments
ability to track potential black money deals by
monitoring and sharing information with the
investigative agencies; the third is about changing laws to increase punishments for holding
undeclared black money abroad or at home.
All three are needed, but are essentially draconian in nature. They will enable the taxman
and the investigating agencies to wield enormous power against citizens. The potential for
corruption and graft will escalate, not reduce
if these powers are not counter-balanced with
safeguards. Draconian laws can be justified only
if people are offered a chance to come clean. Or
else, they will not work.
For example, the Finance Bill includes a proposal to amend the Income-Tax Act to prohibit acceptance or payment of an advance of
Rs20,000 or more in cash for the purchase of
immovable property. Quoting of PAN is being
made mandatory for any purchase or sale exceeding the value of Rs 1 lakh.
This sounds innocuous, but how will any taxman know if I have paid more than Rs 20,000
in cash when I buy property when reported
transactions may anyway be undervalued to
avoid stamp duty? Will this be done by intrusive checks of bank accounts or by aggressively
querying property sellers and buyers?
Then again, the finance minister announced
that third party reporting entities would be
required to furnish information about foreign
currency sales and cross-border transactions.
Provision is also being made to tackle splitting
of reportable transactions. To improve enforcement, CBDT and CBEC will leverage technology
and have access to information in each others
database.
It is always a good idea for the Central Board
of Direct Taxes (CBDT) and the Central Board
of Excise and Customs (CBEC) to share data;
presumably, the data will also be shared with
the Enforcement Directorate which looks at the
foreign money laundering angle. One also presumes that the reference to splitting or reportable transactions includes domestic real estate,
which is where this happens often in order to
avoid higher stamp duties.
Once again, without safeguards built into the
law, citizen data will be in the hands of tax
sleuths who could misuse the information for
various reasons. Also, the mere access to data
should not be a license to launch fishing expeditions against all and sundry. The law clearly
needs to draw a balance between the need to
prevent black money generation and the citizens right to non-intrusive surveillance and
privacy.
The third issue is the draconian nature of the
penalties proposed. Just as giving rapists a
death sentence does not do much to deter rape,
laws with excessive punishments may not do
much to deter potential crooks. It is the certainty of punishment that is vital. This needs
changes in the legal system, and speeding up

court cases.
Among other things, Jaitley has proposed that
concealment of income and assets and evasion
of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment upto 10 years. Further, these offences will
not be compoundable (which means the offender will not be able to pay penalties and settle the
issue), but the penalties will nevertheless be a
hefty 300 percent tax on concealed assets and
income. Even the non-filing of returns or inadequate disclosure of foreign assets will lead to
prosecution that could lead to imprisonment up
to seven years. Jaitley also told parliament that
abettors of the above offences, whether individuals, entities, banks or financial institutions,
will be liable for prosecution and penalty.
This means HSBC Bank, which was recently
at the centre of a scam involving illegal Indian
accounts in Switzerland, could have been prosecuted in India, in case the law had been in
operation before the disclosures.
There is nothing wrong in prosecuting abettors
and the primary crooks involved. But when the
law is made so stringent, it is important also for
the government to make it prospective and
give those who concealed income and assets
abroad or in India a last chance to come clean.
This wont happen without a formal amnesty
scheme that protects identities even while earning back-taxes.
Two reasons why.
supply of black money will diminish if discretionary power in the hands of decision-makers
can be reduced dramatically or eliminated.
The last issue is being addressed partly at the
central level by holding auctions for scarce
resources (spectrum, coal), by reducing red tape
in central clearances (green nod, wildlife nod,
etc) and by eliminating inspector raj.
But at the state level, these discretionary powers remain entrenched. And the sector with the
highest potential for future generation of black
wealth (and benami ownership) is real estate,
where the sheer number of municipal and other
clearances needed ensures that more black
money is generated and stored in benami properties.
The stock issue and the flow issue are also interrelated. If I am sitting on a huge stash of black
money, I cannot use it without insisting that I
make future payments in black money. Or I will
have to send it abroad through the hawala route
and bring it back by calling it foreign investment. Excessive black money stock ensures that
black money will continue to be generated in
future too, even when the laws change to make
punishments more stringent.
The only realistic way to deal with the stock issue is to offer an amnesty scheme so that some
of the high levels of black wealth held abroad or
at home can now be tapped and put to constructive use to aid the poor and for building infrastructure.
First, black money faces both a stock issue (accumulated black wealth generated during years
of crony socialism and a controlled economy)
and a flow issue (creation of more black money
due to lopsided or high taxes, the need for
massive election funding, and the retention of
discretionary power in ministerial and bureaucratic hands.
The elimination of avenues for the deployment of black money held abroad the use of
participatory notes to invest in Indian stocks
anonymously will also have a negative impact on foreign flows, with bad consequences
for the stock markets and investor sentiment.
Once again, banning P-notes will need counterbalancing the stoppage of flows by encouraging
them through an amnesty scheme.
Second, there is both a demand issue and a

supply issue. There is a huge demand issue
because elections are funded largely through
black money. State funding of elections is thus a
prerequisite for reducing the demand for black
money at the wholesale level by politicians. The
An amnesty scheme could offer anonymity

for disclosures after payment of the requisite
tax before the new, more draconian anti-black
money laws kick in. Thus the carrot can be offered with the big stick. A stick without carrot
may not work.
As I wrote earlier, black money is as much as

economic issue as a moral and ethical one. It
gets generated when the laws allow the creation
of rent-seeking opportunities in various industries (real estate, spectrum allotment, export
and import regimes, special tax breaks for certain industries, etc). (Read that article here).
We have to end both the creation of m ore black
money and help reduce its stock accumulated in
the past.
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Decoding Indian Budget

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Table of contents

The big picture

The commons man budget

Macroeconomics and sector impact: Breaking it down

The big picture

Copyright 2012 Firstpost

Roundup: Arun Jaitley does not disappoint.

Union Budget 2015 is reformist

run Jaitley made up for his budget

follows the Economic Surveys path of creative

Last year the finance minister uttered all of

First, the budget has cleverly balanced the need

sources means that states, which have the larger

Sixth, given the slow pace of job creation, the

ance plan instead of the ESIS, and also opt out

sumer base. The FM said that if GST will put in

Copyright 2012 Firstpost

Budget 2015 sets stage for a new economic order,

gives India chance to fly

In many ways, Jaitley has presented a Budget

manufacturing and the impact of the greater

and domestic borrowings under one roof and

Budget 2015: Lets leave carping for

get all necessary clearances and then bid out

No big bang reforms but budget

inance Minister Arun Jaitley on Saturday

said his government had acted "rapidly" to right

Billed as a test of the nationalist premier's

Although Jaitley forecast that growth would

Copyright 2012 Firstpost

Jaitley forecast inflation at 5 percent by the end

In a key passage, Jaitley said he would cut the

Copyright 2012 Firstpost

The commons man budget

Copyright 2012 Firstpost

From gold bonds to cheap LCD, LED TVs:

espite no obvious mention of income

be eligible for deduction under section 80C

D. Jaitley also proposed to use the unclaimed

from your food bill to alcohol bill will get more

has also proposed to increase cover for Visa on

9. Rich will have to shell out more money

Copyright 2012 Firstpost

Budget 2015: Tablets, shoes to get cheaper but

drinks, night outs to get expensive

he national budget presented by Finance

more harder. The duty on aerated water has

Like in the past the levy on tobacco products

Jaitley has proposed to make leather footwear,

* Service tax rate increased to 14 percent and

* Cut tobacco, cigarettes

* Wafers for manufacture of integrated circuit

Copyright 2012 Firstpost

Budget 2015 finds no middle class takers

uch toh phool khilaye hai humne, kuch

the middle income group.

people from price hikes on many commonly

din, she said, After budget speech was made in

Copyright 2012 Firstpost

Jaitleys tax gimmick: Budget 2015 results in

he finance minister Arun Jaitley during

So, in the last year's budget he increased the

Copyright 2012 Firstpost