Finance Minister Arun Jaitley on Monday unveiled a Rs 19.78 lakh crore budget for 2016-17, earmarking more money for health, literacy and roads. The budget focused on rural economy and infrastructure with minor relief for small taxpayers. The direct impact on taxpayers from the proposals will be a Rs 3,000 rebate, benefiting 20 million assessees. Those living in rented homes will get a higher exemption of Rs 60,000, against Rs 24,000 earlier. But the tax slabs remain unchanged. At the same time, withdrawal of provident fund and pension upon retirement are partially taxable.
The Finance Minister also announced an amnesty for those with disputed tax claims, with a waiver of penalty on amounts up to Rs 10 lakh. The FM said 300,000 such cases were pending before appellate authorities, for an amount totalling Rs 5.5 lakh crore.
His other steps include a pilot project to extend direct cash benefit transfers, currently in areas like cooking gas to the fertiliser sector, as also Rs 25,000 crore for the recapitalisation of state-run banks that are under financial stress on account of mounting bad loans. On cutting subsidies, he promised a bill soon to use Aadhaar for direct transfer of cash.
Prime Minister Narendra Modi has appreciated the budget and said its focus on development of agriculture, farmers, women and rural areas will give a major push to India’s agrarian economy. “It will also help the poor man realise the dream of owning a house,” he said.
Jaitley also enhanced the total expenditure for this fiscal to Rs 19.78 lakh crore from Rs 17.85 lakh crore in the revised estimates for this fiscal, a hike of 10.7%, while the plan expenditure component was revised upward by 15.3%.