1. TAXATION
* To abolish wealth tax
* Replaces wealth tax with additional 2 pct surcharge on super rich
* Proposes to cut to 25 percent corporate tax over next four years
* Corporate tax of 30 percent is uncompetitive
* Net gain from tax proposals seen at 150.68 billion rupees
* Jaitley proposes modification of permanent establishment norms so that the mere presence of a fund manager in India would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.
* Proposes to rationalise capital gains tax regime for real estate investment trusts
* Expects to implement goods and services tax by April 2016
* To reduce custom duty on 22 items
* Basic custom duty on commercial vehicle doubled to 20 percent
* Proposes to increase service tax rate and education cess to 14 percent from 12.36 percent
* Plans to introduce direct tax regime that is internationally competitive on rates without exemptions
* Exemptions for individual tax payers to continue
* To enact tough penalties for tax evasion in new bill
* Tax dept to clarify indirect transfer of assets and dividend paid by foreign firms
2. FISCAL DEFICIT
* Fiscal deficit seen at 3.9 percent of GDP in 2015/16
* Will meet the challenging fiscal target of 4.1 percent of GDP
* Remain committed to meeting medium term fiscal deficit target of 3 percent of GDP
* Current account deficit below 1.3 percent of GDP
* Jaitley says have to keep fiscal discipline in mind despite need for higher investment
3. GROWTH
* GDP growth seen at between 8 percent and 8.5 percent y/y
* Aiming double digit growth rate, achievable soon
4. INFLATION
* Expects consumer inflation to remain close to 5 percent by March, opening room for more monetary policy easing
* Monetary policy framework agreement with the RBI clearly states objective of keeping inflation below 6 percent
* “One of the achievements of my government has been to conquer inflation. This decline in my view represents a structural shift.”
5. REVENUES
* Revenue deficit seen at 2.8 percent of GDP
* Non tax revenue seen at 2.21 trillion rupees
* Agricultural incomes are under stress
6. DISINVESTMENT
* Government targets 410 billion rupees from stake sales in companies
* Total stake sale in 2015/16 seen at 695 billion rupees
7. MARKET REFORMS
* Propose to merge commodities regulator with SEBI
* To bring a new bankruptcy code
* Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee
* To set up public debt management agency
* Proposes to introduce a public contract resolution of disputes bill
* To establish an autonomous bank board bureau to improve management of public sector banks
8. POLICY REFORMS
* To enact a comprehensive new law on black money
* Propose to create a universal social security system for all Indians
* To launch a national skills mission soon to enhance employability of rural youth
* To raise visa-on-arrival facility to 150 countries from 43
* Allocates 346.99 billion rupees for rural employment guarantee scheme
9. BORROWING
* Gross market borrowing seen at 6 trillion rupees
* Net market borrowing seen at 4.56 trillion rupees
10. GENERAL ANTI-AVOIDANCE RULES (GAAR)
* Government defers rollout of anti-tax avoidance rules GAAR by two years
* GAAR to apply prospectively from April 1, 2017
* Retrospective tax provisions will be avoided
11. INFRASTRUCTURE
* Investment in infrastructure will go up by 700 bln rupees in 2015/16 over last year
* Plans to set up national investment infrastructure fund
* Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects
* Proposes 5 “ultra mega” power projects for 4,000 MW each
* Second unit of Kudankulam nuclear power station to be commissioned
* Will need to build additional 100,000 km of road
* Ports in public sector will be encouraged to corporatise under Companies Act
12. EXPENDITURE
* Plan expenditure estimated at about 4.65 trillion rupees
* Non-plan expenditure seen at about 13.12 trillion rupees
* Allocates 2.46 trillion rupees for defence spending
* Allocates 331.5 billion rupees for health sector
* If revenue improves, hope to raise budgeted allocations for rural job scheme by 50 billion rupees
13. INVESTMENT
* Propose to do away with different types of foreign investment caps and replace them with composite caps
* To allow foreign investment in alternative investment funds
* Public investment needed to catalyse investment
14. GOLD
* To develop a sovereign gold bond
* To introduce gold monetisation scheme to allow depositors to earn interest
* To introduce Indian-made gold coin to reduce demand for foreign gold coins
15. SUBSIDIES
* Food subsidy seen at 1.24 trillion rupees
* Fertiliser subsidy seen at 729.69 billion rupees
* Fuel subsidy seen at 300 billion rupees
* We are committed to subsidy rationalisation based on cutting leakages
FINANCE MINISTER’S COMMENTS
* “We inherited a sentiment of doom and gloom. The investment community had almost written us off. We have come a long way since then.”
* “We have turned around the economy, dramatically restoring macroeconomic stability and creating the conditions for sustainable poverty elimination, job creation, durable double digit economic growth.”
* “While being mindful of the challenges … this gives us reason to feel optimistic.”
* “Domestic and international investors are seeing us with renewed interest and hope.”