Union Budget 2015-16 India Update : Excise hike on petrol, diesel to add Rs 20,250 cr

The government will yield an additional Rs 20,250 crore this fiscal from the excise duty hiked on petrol and diesel, said Minister of State for Finance Jayant Sinha in a written reply to the Rajya Sabha.

This is the first time the government has stated just how much it stands to gain from the excise duty hike. It has raised the excise duty on petrol and diesel four times since November, a move that prevented consumers from enjoying the full benefit of 60 percent fall in crude prices.

The basic excise duty on branded & unbranded petrol stands at Rs 8.95/litre and Rs 10.10/litre, respectively, Sinha informed Rajya Sabha.


Union Budget 2015-16 India Update : Food subsidy of Rs 8,228 cr released to 5 states under NFSA

Under the National Food Security Act, the Centre has released Rs 8,228.01 crore so far this fiscal, to five states where procurement of grains is decentralised.

In a written reply to the Lok Sabha, Minister of State for Food Raosaheb Patil Danve informed that five states — Bihar, Punjab, Madhya Pradesh, Chhattisgarh and Rajasthan — have been released Rs 8,228.01 crore as subsidy for implementation of the food security act. As of now 11 states have started implementing the food law.

Of that, five states have decentralised procurement system, where they procure grains themselves and hand over additional stock to Centre. The remaining 6 states have centralised procurement where FCI procure the entire output on behalf of Centre. The minister also informed that so far 21.38 million tonnes of foodgrains have been allocated to 11 states under the Act.

The states which have started implementing the Act are: Bihar, Chhattisgarh, Delhi, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan and Chandigarh.

In another reply, Danve said that as per the provisions of food law, identification of eligible households for receiving subsidised foodgrains under Targeted Public Distribution System (TPDS), is entrusted to state governments. While replying to another question, the minister added that there is no proposal for any amendment to the act.

Danve also said that direct transfer of cash subsidy is one of the options discussed in various fora for checking diversion of foodgrains. And it can be taken up on specific requests from states/UTs.


Union Budget 2015-16 India Suggestion : Government should give more tax sops to insurance

Union budget is the biggest opportunity for the Government to showcase its vision for the economy and industries. Life insurance industry can help channelise small savings into long term investments required for economic growth. Government should offer tax incentives to life insurance industry.

Upcoming first full year Union Budget of the Finance Minister, Arun Jaitley, would be carefully matched, as it is expected to provide directional clarity on the Modi Governments economic agenda. This is the time and the biggest opportunity for the Government to showcase its vision for the economy and industries.

The budgeted fiscal deficit of the centre is 4.1% of the GDP for the current financial year. In his last budget speech, the Finance Minister, had set the fiscal deficit target of 3.6% and 3.1% respectively for FY 16 and FY 17. Which given the need for providing growth to the current economy, may have to be revised. He may continue to reduce fiscal deficit through control on unproductive Government expenditure and increase in revenue.

A boost in the infrastructure development is critical for giving a minimum 100 bps push to the GDP growth rate. Current Account Deficit is another area the Finance Minister should focus on. During FY 15 a sharp fall in the international crude price and other commodities, decline in import of gold, helped improve trade deficit. However to further improve the status on Current Account Deficit; the Government needs to provide some boost to the exports. A competitive exchange rate of the Rupee and sharper policy focus on sector specific issues will help increase the country’s exports. A clear roadmap to support “Make in India’ will make the country an attractive destination for long term foreign capital. This will help boost the manufacturing sector which is proving to be a drag to GDP growth rate of the country. Tax reform in the coming budget is an urgent need. In this direction, push for GST is required. The GST will create a single, unified Indian market to make the economy stronger besides boosting tax collections.

In India household savings rate form a large part of the overall savings of the country. There is a need to channelize small savings for funding infrastructure development. Life insurance through its extensive retail reach and long term orientation can play a critical role as an aggregator of small savings, as separate limit in section 80CCE for deduction up to Rs. 1.5 Lacs for life insurance premium payments should be considered. We also expect the deduction limit under section 80D for health insurance premium to be increased from Rs. 15,000 to Rs. 50,000.

With growing population above the age of 60 years, and limited state supported social welfare schemes there is a need to promote private pensions in India. World over private pensions are dependent on tax incentives. The Government has made a right beginning by extending specific tax breaks under section 80 CCD(2) for NPS. It would be a reasonable ask that the same benefit be extended to IRDAI approved pension plans offered by life insurance companies.


Union Budget 2015-16 India Expectations : Over 56% polled expects a radical Budget

It’s less than six days to go for the Union Budget and expectations are running high. In an interview to CNBC-TV18, Pallavi Bakhru, director, Grant Thornton, said the euphoria quotient has never been higher.

Discussing the firm’s pre-Budget poll on India Inc’s expectations from Finance Minister Arun Jaitley, Bakhru said that 56 percent of the respondents see it to be radical Budget.

According to her, people are keen on the roadmap to GST in the indirect tax front, while on direct taxes the majority sees reduction in income tax and higher exemption in the housing loan interest.

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