Always Seek Knowledge, ASK @ ASIBAS

(strictly for knowledge sharing)

An initiative under Banking and Insurance beyond classroom..Volume 2.3
February 2016

A CLOUD NINE BUDGET 2016 FOR THE AGRICULTURE

SECTOR

Aim of the budget

1. To ensure macro-economic stability and prudent management
2. Boosting domestic demand
3. Continuing with the pace of economic reforms and policy initiatves to
change the lives of our people for the better.
4. Enhance expenditure in priority sector areas.
5. Create smooth path for GST and Insolvency and Bankruptcy law

Important reforms
a) Provide statutory back to AADHAR card to ensure benefits reach the
deserving.
b) Incentivising gas discovery and exploration by providing calibrated marketing
freedom.
c) Introduce comprehensive law to deal with resolution of financial firms.
d) Provide legal framework for dispute resolution and negotiations.
MAJOR REFORMS IN INSURANCE AND BANKING
1. A long term irrigation fund of Rs 20,000 cr to be created in NABARD.
2. Increased allocation to Rs. 19,000 cr under Pradhan Mantri Gram Sadal
Yajana and Rs. 5,500 cr under Pradhan Mantri Fasal Bima Yojana.
3. Concept of Soil Health Cards to cover 14cr farm holdings by March 2017

Always Seek Knowledge, ASK @ ASIBAS

(strictly for knowledge sharing)
An initiative under Banking and Insurance beyond classroom..Volume 2.3
February 2016
4. New health scheme to cover Rs 1 lakh per family with top-up Rs.30,000
5. Pradhan Mantri Jan Aushadhi Yojana to open by end of 2017
6. GOI will pay contribution of 8.33% for all new employees enrolling in EPFO
for the first 3 yes of their employment.
7. Senior citizens will get additional health care cover of Rs 30,000 under the
new sheme.
8. Motor vehicles act to be amended to open road transport sector in passenger
segment.
9. Reforms in FDI policy in insurance, pension , ARC.
10. RBI to facilitate retail participation in government securities.
11. Amendment in SARFAESI act to enable sponsor of ARC to hold upto 100%
stake.
12. Allocation of Rs 25,000cr for recapitalization of PSBs and increased
sanctioned amount under Pradhan Mantri Mudra Yojana.
13. General insurers owned by GOI to be listed in stock exchanges
AGRICULTURE & RURAL SECTOR
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.

Pradhan mantra Krishi Sinchai Yojana has been implemented to bring in

28.5 hectares under irrigation.
Programme for sustainable management of Groundwater resources with
an estimated cost of Rs 6000 crores.
Increased allocation for production of organic manure in agriculture farms
and for rural development under MGNREGA.
Unified e-platform to provide common e-portal to market agri-produce.
Develop 300 rurban clusters under Shyama Prasad Mukherjee Rurban
Mission.
100% electrification by 1 May 2018
Introduction of Rashtriya Gram Swaraj Abhiyan with funds Rs. 655cr.
New digital literacy mission scheme to cover 6cr rural India in next 3yr.

SOCIAL SECTOR
DEVELOPMENT
i.
ii.
iii.
iv.
v.

INCLUDING

HEALTH

CARE

&

SKILLS

National Dialysis Services Programme to start under National Health

Mission.
Stand up India scheme to facilitate atleast 2 projects per bank branch.
62 Navodaya Vidyalayas to be opened
Digital depository for all school related documents to be set-up.
1500 multi skill training institutes to be set up and promote open online
courses for entrepreneur education.

Always Seek Knowledge, ASK @ ASIBAS

(strictly for knowledge sharing)
An initiative under Banking and Insurance beyond classroom..Volume 2.3
February
2016
vi. 100 model career centres
to be operational
by the end of 2016-17
vii. 15% surcharge on income above Rs. 1 crore on persons, other than
companies, firms and co-operative societies.
viii. Allocation for social sector including Education and Health Care pegged
at Rs1,51,581crore
ix. Rs 2000crores allocated for intial cost of providing LPG connections to
BPL families.
INFRASTRUCTURE AND INVESTMENT
i.
ii.
iii.
iv.
v.
vi.
vii.

Additional Rs.15,000cr to be raised by NHAI through bonds.

Plans to be worked out on revival of unserved and undeserved airports.
New credit rating system for infrastructure projects to be introduced.
100% FDI to be allowed in marketing of food & products produced in
India.
The total investment in the road sector, including PMGSY
allocation, to be Rs 97000crores during 2016-17.
Total outlay of infrastructure in budget 2016 now stands at
Rs2,21,246crore.

FINANCIAL SECTOR

i.
ii.
iii.

Setting up of financial data management centre.

Mobilization of additional finances to the extent of Rs 31,300crores by
NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by
raising bonds
New derivative products will be developed by SEBI in the Commodity
Derivatives Market.

FISCAL DISCIPLINE
i.
ii.
iii.

Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.

Revenue Deficit target from 2.8% to 2.5% in RE 2015-16
Total expenditure projected at Rs 19.78lakhcrore.

Always Seek Knowledge, ASK @ ASIBAS

(strictly for knowledge sharing)
An initiative under Banking and Insurance beyond classroom..Volume 2.3
February 2016
TAX REFORMS
i.
ii.

Raise the ceiling of tax rebate under section 87A from Rs 2000 to Rs
5000 to lessen tax burden on individuals with income upto Rs 5lakhs.
Increase the limit of deduction of rent paid under section 80GG from Rs
24000 per annum to Rs 60000, to provide relief to those who live in
rented houses.

iii.

Companies with revenue less than Rs. 5crores to be taxed at 29% plus
surcharge and cess
iv.
Addition exemption of Rs 50,000 for interest paid on housing loans up to
Rs 35lakhs, provided cost of house is not above Rs. 50lakhs.
v. Non-banking financial companies shall be eligible for deduction to
the extent of 5% of its income in respect of provision for bad and
doubtful debts.
vi.
10% tax on dividends in excess of Rs. 10lakhs received by individuals,
HUFs that will be in addition to DDT.
vii. Withdrawal up to 40% of the corpus at the time of retirement to be
tax exempt in the case of National Pension Scheme (NPS).
Annuity fund which goes to legal heir will not be taxable.
viii. Tax to be deducted at source at the rate of 1 % on purchase of
luxury cars exceeding value of Rs 10lakh and purchase of goods
and services in cash exceeding Rs 2lakh.
MAKE IN India
Changes in customs and excise duty rates on certain inputs to reduce
costs and improve competiveness of domestic industry in sectors like
Information technology hardware, capital goods, defence production,
textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper,
paperboard & newsprint, Maintenance repair and overhauling (MRO) of
aircrafts and ship repair.

Always Seek Knowledge, ASK @ ASIBAS

(strictly for knowledge sharing)
An initiative under Banking and Insurance beyond classroom..Volume 2.3
February 2016
PROMOTING AFFORDABLE HOUSING
100% deduction for profits to an undertaking in housing project for flats
upto 30 sq. metres in four metro cities and 60 sq. metres in other cities,
approved during June 2016 to March 2019 and completed in three years.
MAT to apply.
Deduction for additional interest of Rs50,000 per annum for loans up to
Rs35 lakh sactioned in 2016-17 for first time home buyers, where house
cost does not exceed Rs50 lakh.
Exemption from service tax on construction of affordable houses up to 60
square metres under any scheme of the Central or State Government
including PPP Schemes.
SIMPLIFICATION AND RATIONALIZATION OF TAXES
13 cesses, levied by various Ministries in which revenue collection
is less than Rs50 crore in a year to abolished.
For non-residents providing alternative documents to PAN card,
higher TDS not to apply.
Revision of return extended to Central Excise assesses.
Increase in free baggage allowance for international passengers.
Filling of baggage only for those carrying dutiable goods.

A students driven initiative guided by

Prof. R.C. Bhatnagar, Banking
Mr. J. L. Kapur, Advisor Insurance
abily assistated by:
Prathibha (ABYB Batch 2015-16)
Shivani gupta(MBA- I&B 2015-17) Ashima Kaushal & Trupti
Mahajan ( MBA I&B 2014-16)
ASIBAS, AMITY UNIVERSITY, NOIDA

Always Seek Knowledge, ASK @ ASIBAS

(strictly for knowledge sharing)
An initiative under Banking and Insurance beyond classroom..Volume 2.3
February 2016