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Nine pillars on which the budget is

prepared
1. Agriculture and farmers welfare.
2. Rural sector with focus on employment.
3. Social sector with healthcare.
4. Educational skills and job creation.
5. Infrastructure and investment.
6. Financial sector reforms.
7. Governance and ease of doing business.
8. Fiscal discipline.
9. Tax reforms to reduce tax burden.

The CESS Issue


The Government decided to tax people with higher income (rich) and bring new

cess for retail investors.


With more than 1Crore income; the surcharge paid has gone up from 12% to

15%.
A Krishi Kalyan Cess at 0.5% on all taxable services.
Here the advice for the FM would be that it would have been easier to just raise

the service tax rate rather than bringing a new cess.


The government can always repurpose any tax collection anywhere; so to call it

a cess Krishi or Swachh Bharat is not very important if the government can
demonstrate those were the real end uses.

Duties for branded garments and additional


CESS on cars

The organized retail has grown significantly over the last few years and has
been one of the bright spots in the economy.

These duties and cess somehow will not generate much revenue but will come
under limelight for the opposition parties.

Increasing cost of electronics and digital items including those manufactured in


India due to duty structure changes is another area of concern.

On one hand the government wants to promote Digital India and on the other
hand the cost of almost all retail digital equipment goes up.

This kind of negative perception the FM could have avoided to retain the trust
with the middle class.

Dividend tax on shareholders


Upto 31st
march 2015

Subsequent
year

10% on
entire sum

DDT at
the rate of
15% of
the net
dividend
Paid by
the
company

DDT rate
unchange
d
computati
on
mechanis
m
changed
effective
rate of
DDT to
20.36%

Sharehold
ers
receiving
dividend
sum
exceeding
INR 10
lakh

Need to strengthen education and health


sector

General
education

2015-16 RE

2016-17 BE

3.8% of union
budget

3.7% of union
budget

Education being the pillar of the nation, need prior attention which is
due on NDA govts part.

Though there are schemes, but still public expenditure is considered


to be the lowest in India for education (UNESCO).

Around 4.3 crore children of 6-14 age group are still out of school,
constituting 18% of this age group (Census 2011).

Basic school infrastructure, teacher training, teacher recruitment,


community mobilisation are some of the basic factors to improve
quality of education.

Yet, the overall budget for School Education Department in 2016-17


(BE) has increased only by 3.2% as compared to 2015-16(RE).

In spite of shortage of trained and qualified teachers at school level,


the allocation for teachers training is Rs. 510 crore in 2016-17(BE),
which was Rs. 558 crore in earlier BE.

Health sector
Allocation in
MoHFW

2015-16 RE

2016-17 BE

0.25% of GDP

0.25% OF GDP

33831.6 cr of
GDP
38206.3 cr of
GDP

Again an important sector not getting the required attention.

The insurance scheme for the poor families and National Dialysis Programme in Public Private
Partnership (PPP) mode and the overall thrust of the Draft National Health Policy 2015, it is
observed that there is an increasing dependence on private sector provisioning of healthcare.

It raises a question of private dominance in healthcare in the country- are we ready for it?

Reducing the tax rate to 29%(surcharge+cess) from 30% for domestic companies
having turnover or gross receipts not exceeding 5 crore in the FY 2014-15.
This category of company is small and limited class.
There is no major tax relief for the corporates.
No tax slab change, exemptions for the personal income tax.

There was no relief for the tax payers.


Highest ever allocation for MNREGA, an act which was opposed by the PM and
the
finance minister themselves last year.

With no new changes for betterment or its implementation in more efficient


manner.
The scheme was started on 2005.

Agriculture sector

AGRICULTURE
2015-16
RE
2016-17
BE

Agriculture is a state subject.

Allocation of funds is not enough.

Despite of increased allocation for the agriculture sector, the condition of the sector
remains the same.

Since agriculture is multidimensional in nature, it requires a national strategy to


revive.

A strategy should examine public not only in agriculture but in irrigation also.

No such major announcement except PMFBY and dedicated long term irrigation fund.

Fiscal consolidation path

Sticking to the fiscal consolidation path is right for the time since the govt. is in
fiscal deficit and spending may hurt the debt dynamics more.

But it may also lead to forego high return investments by focusing on


consolidation path.

Also, there is a need to pay attention to weaker sections of society and rural
India to create new demand and market, which is impossible without allocating
huge amounts.

Also, govt. sticking to consolidation path may result in lower demand because
of raised taxations and this might result in a negative impact on growth.

References.

http://indianexpress.com/article/business/budget/live-budget-2016-income-tax-high
lights-expectations-arun-jaitley-service-tax-gst-bill-union-budget-news-2922016
/

http://indiabudget.nic.in/ub2016-17/bag/bag11.pdf

http://www.opindia.com/2016/02/the-only-summary-of-union-budget-2016-17-youneed-to-read
/

http://unionbudget2016.cbgaindia.org/

Work Cited.

http://www.opindia.com/2016/02/the-only-summary-of-union-budget-2016-17-youneed-to-read/

http://unionbudget2016.cbgaindia.org/

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