Budget 2014

11Jul

Highlights of Budget 2014 – THE CURRENT ECONOMIC SITUATION AND THE CHALLENGES – Part 3

Several Initiatives Taken By The Government To Overcome The Challenges

AGRICULTURE AND FOOD SECTOR

Agriculture

  • Government to establish two more Agricultural Research Institute of excellence in Assam and Jharkhand with an initial sum of Rs. 100 crore.
  • An amount of ` 100 crores set aside for “Agri-tech Infrastructure Fund”.
  • Rs. 200 crore provided to open Agriculture Universities in Andhra Pradesh and Rajasthan and Horticulture Universities in Telangana and Haryana.
  • A scheme to provide every farmer a soil health card in a Mission mode will be launched. Rs. 100 crore has been provided for this purpose and additional Rs. 56 crores to set up 100 Mobile Soil Testing Laboratories across the country.
  • To meet the vagaries of climate change a “National Adaptation Fund” with an initial sum an amount of Rs. 100 crore will be set up.
  • A sustainable growth of 4% in Agriculture will be achieved.
  • Technology driven second green revolution with focus on higher productivity and including “Protein revolution” will be area of major focus.
  • To mitigate the risk of Price volatility in the agriculture produce, a sum of Rs. 500 crore is provided for establishing a “Price Stabilization Fund”.
  • Central Government to work closely with the State Governments to re-orient their respective APMC Acts.
  • Sum of Rs. 50 crores provided for the development of indigenous cattle breeds and an equal amount for starting a blue revolution in inland fisheries.
  • Transformation plan to invigorate the warehousing sector and significantly improve post-harvest lending to farmers.

Agriculture Credit

  • To provide institutional finance to landless farmers, it is proposed to provide finance to 5 lakh joint farming groups of “Bhoomi Heen Kisan” through NABARD .
  • A target of Rs. 8 lakh crore has been set for agriculture credit during 2014-15.
  • Corpus of Rural Infrastructure Development Fund (RIDF) raised by an additional Rs. 5000 crores from the target given in the Interim Budget to Rs. 25000 crores .
  • Allocation of Rs. 5,000 crore provided for the Warehouse Infrastructure Fund.
  • “Long Term Rural Credit Fund” to set up for the purpose of providing refinance support to Cooperative Banks and Regional Rural Banks with an initial corpus of Rs. 5,000 crore.
  • Amount of Rs. 50,000 crore allocated for Short Term Cooperative Rural Credit .
  • Sum of Rs. 200 crore for NABARD’s Producers Development and Upliftment Corpus (PRODUCE) for building 2,000 producers organizations over the next two years.

Food Security

  • Restructuring FCI, reducing transportation and distribution losses and efficacy of PDS to be taken up on priority.
  • Government committed to provide wheat and rice at reasonable prices to the weaker sections of the society.
  • Government when required will undertake open market sales to keep prices under control.
11Jul

Highlights of Budget 2014 – THE CURRENT ECONOMIC SITUATION AND THE CHALLENGES – Part 2

Several Initiatives Taken By The Government To Overcome The Challenges

EDUCATIONAL SECTOR

School Education

  • Government would strive to provide toilets and drinking water in all the girls school in first phase. An amount of Rs. 28635 crore is being funded for Sarv Shiksha Abhiyan(SSA) and Rs. 4966 crore for Rashtriya madhyamic Shiksha Abhiyan (RMSA).
  • A School Assessment Programme is being initiated at a cost of Rs. 30 crore.
  • Rs. 500 crore provided for “Pandit Madan Mohan Malviya New Teachers Training Programme” to infuse new training tools and motivate teachers.
  • Rs. 100 crore provided for setting up virtual classrooms as Communication Linked Interface for Cultivating Knowledge (CLICK) and online courses.

Higher Education

  • Jai Prakash Narayan National Centre for Excellence in Humanities to be set up in MP.
  • Rs. 500 crore provided for setting up 5 more IITs in the Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
  • 5 IIMs in the States of HP, Punjab, Bihar, Odisha and Rajasthan.
  • Simplification of norms to facilitate education loans for higher studies.

IT SECTOR

Information Technology

  • Pan India programme “Digital India” to with an outlay of Rs. 500 crore to be launched.
  • Programme for promoting “Good Governance” to be launched .A sum of Rs. 100 crore provided.

Information and Broadcasting

  • Rs. 100 crore allocated for 600 new and existing Community Radio Stations.
  • Film & Television Institute, Pune and Satyajit Ray Film & Television Institute, Kolkata are proposed to be accorded status of Institutes of national importance and a “National Centre for Excellence in Animation, Gaming and Special Effects to be set up.
  • Rs. 100 crore is provided for Kisan TV, to disseminate real time information to the farmers on issues such as new farming techniques, water conservation, organic farming etc.

Urban Development

  • Vision of the Government is that 500 urban habitations to be provided support for renewal of infrastructure and services in next 10 years through PPPs
  • Present corpus of Pooled Municipal Debt Obligation Facility facility to be enlarged to Rs. 50,000 Crore from Rs. 5000 crore.
  • Rs. 100 crore provided for Metro Projects in Lucknow and Ahemdabad.

Housing

  • Extended additional tax incentive on home loans shall be provided to encourage people, especially the young, to own houses.
  • Mission on Low Cost Affordable Housing anchored in the National Housing Bank to be set up.
  • A sum of Rs.4000 crores for NHB from the priority sector lending shortfall with a view to increase the flow of cheaper credit for affordable housing to urban poor/EWS/LIG segment is provided.
  • Slum development to be included in the list of Corporate Social Responsibility (CSR) activities to encourage the private sector to contribute more.

Minorities

  • A programme for the up gradation of skills and training in ancestral arts for development for the minorities “Up gradation of Traditional Skills in Arts, Resources and Goods” to be launched.
  • An additional amount of Rs. 100 crores for Modernization of Madarsas.
11Jul

Highlights of Budget 2014 – Several Initiatives Taken By The Government To Overcome The Challenges – Part 1

Several Initiatives Taken By The Government To Overcome The Challenges

ADMINISTRATIVE AND ECONOMIC INITIATIVES

Administrative Initiatives

* Sovereign right of the Government to undertake retrospective legislation to be exercised with extreme caution and judiciousness keeping in mind the impact of each such measure on the economy and the overall investment climate.

* A stable and predictable taxation regime which will be investor friendly and spur growth.

* Legislative and administrative changes to sort out pending tax demands of more than Rs.4 lakh crore under dispute and litigation.

* Resident tax payers enabled to obtain on advance ruling in respect of their income-tax liability above a defined threshold.

* Measures for strengthening the Authority for Advance Rulings.

* Income-tax Settlement Commission scope to be enlarged.

* National Academy for Customs & Excise at Hindupur in Andhra Pradesh.

* The subsidy regime to be made more targeted for full protection to the marginalized, poor and SC/ST.

* New Urea Policy would be formulated.

* Introduction of GST to be given thrust.

* High level committee to interact with trade and industry on regular basis to ascertain areas requiring clarity in tax laws is required to be set up.

* Convergance with International Financial Reporting Standard (IFRS) by Adoption of the new Indian Accounting Standards (2nd AS) by Indian Companies.

* Setting up of Expenditure Management Commission to look into expenditure reforms.

* Employment exchanges to be transformed into career centres. A sum of Rs.100 crore provided .

ECONOMIC INITIATIVES

Foreign Direct Investment (FDI)

* Government to promote FDI selectively in sectors.

* The composite cap of foreign investment to be raised to 49 per cent with full Indian management and control through the FIPB route.

* The composite cap in the insurance sector to be increased up to 49 % from 26 % with full Indian management and control through the FIPB route.

* Requirement of the built up area and capital conditions for FDI to be reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively for development of smart cities.

* The manufacturing units to be allowed to sell its products through retail including E-commerce platforms.

Bank Capitalization

* Requirement to infuse Rs.2,40,000 crore as equity by 2018 in our banks to be in line with Basel-III norms.

* Capital of banks to be raised by increasing the shareholding of the people in a phased manner.

PSU Capital Expenditure

* PSUs will invest through capital investment a total sum of Rs. 2,47,941 crores in the current financial year.

Smart Cities

* A sum of Rs. 7060 crore is provided in the current fiscal for the project of developing “one hundred Smart Cities’

Real Estate

* Incentives for Real Estate Investment Trusts (REITS). Complete pass through for the purpose of taxation.

* A modified REITS type structure for infrastructure projects as the Infrastructure Investment Trusts (INVITS).

* These two instruments to attract long term finance from foreign and domestic sources including the NRIs .

Irrigation

* Rs. 1000 crore provided for “Pradhan Mantri Krishi Sinchayee Yojna” for assured irrigation.

Rural Development

* Shyama Prasad Mukherji Rurban Mission for integrated project based infrastructure in the rural areas.

* Rs. 500 crore for “Deen Dayal Upadhyaya Gram Jyoti Yojana” for feeder separation to augment power supply to the rural areas.

* Rs. 14,389 crore provided for Pradhan Mantri Gram Sadak Yojna(PMGSY) .

* More productive, asset creating and with linkages to agriculture and allied activities wage employment would to be provided under MGNREGA.

* Under Ajeevika, the provision of bank loan for women SHGs at 4% to be extended to another 100 districts.

* Initial sum of Rs. 100 crore for “Start Up Village Entrepreneurship Programme” for encouraging rural youth to take up local entrepreneurship programs .

* Allocation for National Housing Bank increased to Rs. 8000 crore to support Rural housing.

* New programme “Neeranchal” to give impetus to watershed development in the country with an initial outlay of Rs. 2142 crores.

* Backward Region Grant Fund (BRGF) to be restructured to address intra-district inequalities.

Scheduled Caste/Scheduled Tribe

* An amount of Rs. 50,548 crore is proposed under the SC Plan and Rs. 32,387 crore under TSP.

* For the welfare of the tribals “Van Bandhu Kalyan Yojna” launched with an initial allocation of Rs. 100 crore.

Senior Citizen & Differently Abled Persons

* Varishtha Pension Bima Yojana (VPBY) to be revived for a limited period from 15 August, 2014 to 14 August, 2015 for the benefit of citizens aged 60 years and above.

* A committee will to examine and recommend how unclaimed amounts with PPF, Post Office, saving schemes etc. can be used to protect and further financial interests of the senior citizens?

* Government notified a minimum pension of Rs. 1000 per month to all subscriber members of EP Scheme. Initial provision of 250 crore.

* Increase in mandatory wage ceiling of subscription to Rs. 15000. A provision of Rs. 250 crore in the current budget.

* EPFO to launch the “Uniform Account Number” Service for contributing members .

* Scheme for Assistance to Disabled Persons for purchase/fitting of Aids and Appliances (ADIP) extended to include contemporary aids and assistive devices.

* National level institutes for Universal Inclusive Design , Mental Health Rehabilitation and a Centre for Disability Sports to be established.

* Assistance to State Governments to establish fifteen new Braille Presses and modernize ten existing Braille Presses.

* Government to print currency notes with Braille like signs for visibly challenged persons.

Women & Child Development

* Outlay of Rs. 50 crores for pilot testing a scheme on “Safety for Women on Public Road Transport”.

* Sum of Rs. 150 crores on a scheme to increase the safety of women in large cities.

* “Crisis Management Centres” in all the districts of NCT of Delhi this year government and private hospitals.

* A sum of Rs. 100 crore is provided for “Beti Bachao, Beti Padhao Yojana”, a focused scheme to generate awareness and help in improving the efficiency of delivery of welfare services meant for women.

* School curriculum to have a separate chapter on gender mainstreaming.

Drinking Water & Sanitation

* 20,000 habitations affected with arsenic, fluoride, heavy/ toxic elements, pesticides/ fertilizers to be provided safe drinking water through community water purification plants in next 3 years

* “Swachh Bharat Abhiyan” to cover every household with sanitation facility by the year 2019.

Health and Family Welfare

* Free Drug Service and Free Diagnosis Service to achieve “ Health For All”

* Two National Institutes of Ageing to be set up at AIIMS, New Delhi and Madras Medical College, Chennai.

* A national level research and referral Institute for higher dental studies to be set up.

* AIIMS like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP. A provision of Rs. 500 crores made.

* 12 new government medical colleges to be set up.

* States’ Drug Regulatory and Food Regulatory Systems to be strengthened by creating new drug testing laboratories and strengthening the 31 existing State laboratories.

* 15 Model Rural Health Research Centres to be set up for research on local health issues concerning rural population.

* A national programme in Mission Mode to halt the deteriorating malnutrition situation in India to be put in place within six months.

11Jul

Highlights of Budget 2014 – THE CURRENT ECONOMIC SITUATION AND THE CHALLENGES

THE CURRENT ECONOMIC SITUATION AND THE CHALLENGES OF THE GOVERNMENT

* Decisive vote for change represents the desire of the people to grow, free themselves from the curse of poverty and use the opportunity provided by the society. Country in no mood to suffer unemployment, inadequate basic amenities, lack of infrastructure and apathetic governance.

* Challenging situation due to Sub five per cent growth and double digit inflation.

* Continued slow-down in many emerging economies a threat to sustained global recovery.

* Recovery seen with growth rate of world economy projected at 3.6 % in 2014 vis-à-vis in 2013.

* First budget of this NDA government to lay down a broad policy indicator of the direction in which we wish to take this country.

* Steps announced are only the beginning of the journey towards a sustained growth of 7-8 % or above within the next 3-4 years along with macro-economic stabilization.

* Growing aspirations of people will be reflected in the development strategy of the Government led by the Prime minister Shri Narendra Modi and its mandate of “Sab ka Saath Sab ka Vikas”.

* Need to revive growth in manufacturing and infrastructure sectors.

* Tax to GDP ratio must be improved and Non-tax revenues increased.

Deficit and Inflation

* Decline in fiscal deficit from 5.7% in 2011-12 to 4.5% in 2013-14 mainly achieved by reduction in expenditure rather than by way of realization of higher revenue.

* Improvement in current account deficit from 4.7 % in 2012-13 to year end level of 1.7% mainly achieved through restriction on non-essential import and slow-down in overall aggregate demand. Need to keep watch on CAD.

* 4.1 per cent fiscal deficit a daunting task in the backdrop of two years of low GDP growth, static industrial growth, moderate increase in indirect taxes, subsidy burden and not so encouraging tax buoyancy.

* The government is committed to achieve this target. Road map for fiscal consolidation outlines fiscal deficit of 3.6 % for 2015-16 and 3 % for 2016-17.

* Inflation has remain at elevated level with gradual moderation in WPI recently.

* The problem of black money must be fully addressed.

* Bold steps required to enhance economic activities and spur growth in the economy.

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