Live Updates Budget 2014 - 2015

 
Published: Thursday 10 July 2014

  • Govt sets aside Rs 2,250 crore to improve weather infrastructure

  • Excise duty on tobacco products increased from 50 per cent to 55 per cent. This means cigarettes to become costlier

  • Added excise duty of 5 per cent on adding sugar. This means that soft drinks with high sugar will be more expensive

  • Biomedical waste disposal industry to be exempted from any taxation

  • Clean energy cess increased from Rs 50 per tonne of coal to Rs 100 per tonne. Good move

  • Custom duty on import of unhealthy palm oil reduced. Apart from being a health hazard, this also harms domestic oil industry, which includes healthy oils like mustard and coconut

  • The only surprise element of the budget is the overarching and overwhelming focus on PPP. For every provision there is a PPP provision. This ranges from agriculture warehouse to handicraft to housing. This makes the budget a loose document of intent without specifics. While govt. has declared its own allocation in hope of private investments, there is no articulation of how or from where private investments will come. With this, govt. has minimised its allocation but no concrete investment vision. That's why we have many alloctions that range from Rs 100 to Rs 200 crore. Many of the allocations range around Rs 50-100 crore. Contrast this with the Rs 200 crore allocation to a statue in Gujarat or Rs 100 crore to another statue in Delhi

  • To make Delhi a model city, FM proposes Rs 200 crore for power reforms in the national capital

  • Rs 500 crore for ultra modern #solar power projects in Rajasthan, TN, Ladakh and J&K. Renewables high priority, says Jaitley

  • Science and Technology: Will develop five institutions as technical centres through PPP, says FM

  • Around 22 per cent increase in plan expenditure compared to 2013-14 budget

  •  An agro-biotechnology cluster to be developed in PPP mode at National Agri-Food Biotechnology Institute in Mohali

  • Rs 100 crore allocated to develop Northeast as organic food hub

  • Rs 100 crore for taking up detailed project report of the river-linking project. It's revival time for inter-linking of rivers

  • Rs 100 cr set aside for development of Technology Development Fund: FM 

  • Mining: Changes in MMDR rules very soon. Royalty to be revised to give greater revenue to states

  • Financial inclusion: Two account holders in every household; universal financial inclusion by 2017. This is to provide access to formal credit facilities

  • PPP: FM uses a superlative for India--'world's largest PPP market'. The seeming focus of the budget is on public-private models. Starting from handicraft to agriculture to housing, govt. seeks private investments. Less allocation from govt

  • Mining: Changes in MMDR rules very soon. Royalty to be revised, to give greater revenue to the states

  • Budget on health focused on medical education and big hospitals. Jaitley forgot primary healthcare, NCDs or communicable diseases

  • Rs 200 crore has been allocated for Sardar Patel Statue or Statue of Unity for which there is still no EIA. Because of the statue, forest land will be submerged and tribal population that inhabits the land would be displaced

  • SEZs: Operationalise the SEZs and revive them. Use the unused lands already with them. No details on this. SEZs were started during the last NDA regime

  • Food inflation: Price stabilisation fund of Rs 500 crore. This is to fight food inflation. It is a much demanded fund that has been in practice in many countries

  • Climate change: Climate Adaptation Fund declared

  • The finance minister Arun Jailtley today announced Rs 7,060 crore for setting up 100 smart cities in the current fiscal. According to the minister, the cities would have state of the art facilities. The Centre has planned collaboration with Singapore for smart cities by improving IT in management of cities, use of new technology for sewage treatment, including solid waste management, energy use of urban planning norms. Smart cities concept followed in Singapore include smart concept for generating energy savings up to 30 per cent and reducing carbon emissions and Smart Energy Grids for electricity demand and supply to interact intelligently. Smart cities are expected to improve economic efficiency, provide better quality of life and promote sustainable urban development. The finance minister also said FDI would be invited to set up low cost affordable housing in the cities. For urban development, the finance minister set aside additional Rs 5,000 crore to address issues of solid waste management, drinking water and sewarage and better connectivity. He also invited industries to take up low cost housing for urban poor has been CSR activity

  • FM announces two flagship schemes in health: free drug service and free diagnostic service. No announcement regarding budget allocation

  • New AIIMS-like institutes proposed for West Bengal, Poorvanchal and Vidarbha

  • National Programme of Malnutrition within 6 months. It will look into all aspects including technology

  • Agriculture technology and modernisation: Rs. 100 crore for agri infrastructure fund. The focus seems to be on extension and further research projects. Govt. seeks private investment as wel

  • Housing for all by 2020: Tax incentives for those building affordable houses. Rs. 4,000 crore for national housing bank for urban poor. This was been a major campaign issue

  • Rs. 150 core for women safety in city areas and roads. This will come from the Nirbhaya Fund

  • Community radio: Rs. 100 crore for existing and new community stations to strengthen them. But no declaration on whether news will be allowed

  • Money left in PPF after death of an elderly to be used for betterment of other old people. #FM to set up a committee

  • 12 more government medical colleges to be set up

  • National ageing centres to be set up at AIIMS and Madras Christian College 

  • SC/ST welfare: Rs. 50,540 crore allocated for SC-ST sub-plans 

  • Van Bandhu Kalyan programme for tribal with Rs. 100 crore

  • Allocation for Pradhan Mantri Gram Sadak Yojana decreased from Rs 22,000 crore to Rs 14,389 crore

  • RURBAN PROJECTS: Jaitley cites Gujarat 'model' to start a programme to get urban infrastructure into rural areas

  • Skill India programme introduced for building skills. This will include daily life skills--cobbler and carpenters. No details given. But it is a part of the Modi's skill building programme

  • Smart cities: This is meant for the neo-middle class. 100 cities as satellite cities to big cities. Rs 7,060 crore for the project. Seems too little an amount. Wait for further declaration under other heads

  • Smart cities for new middle class. FDI to help out. Limit reduced. This was one of the key promises of the Modi government during the election campaign. He promised 100 smart cities. 

  • Expendutre Management Commission to be set up to look at expenditure and rationalise subsides. Food and fuel and fertiliser subsidies to be reviewed. Will be targeted better. This means government may further strengthen the AADHAR and the other delivery mechanism. Wait for more declarations

  • 3.6% fiscal deficit target. This means a huge reduction in spending. A tough target given the volatility of situations like deficit monsoon and economic slowdown in economy.

  • FIRST BUDGET LIMITATION: Don't expect much from the first budget in just 48 days, says finance minister. It calls for tough decisions, but need to lift people above the poverty line. But without populism. He says that it has to be managed by high growth. This will be done through fiscal discipline and prudence. "We can't spend mindlessly and put the future at stake." Does this mean spending will be less? This may be the case as he says the last reduction in fiscal deficit is due to less expenditure. Bad news for social sector?

  • GLOBAL ECONOMY TO DECIDE RECOVERY AND POVERTY ALLEVIATION: The poor want to be the new middle class, says Finance Minister Arun Jaitley in his opening remarks during his budget speech. It comes at a time when a new estimate of poverty has increased the number of poor by over 90 million. "We need to give them the opportunity," he adds. But economic recovery depends on the global economy recovery

  • If the Economic Survey is any indication of the contour of the budget, it going to focus more on job creation; but on "quality" jobs. Does this mean the focus on manual jobs/works like the ones MGNREGA creates are out of favour? Does this mean the budget will focus too much on manufacturing and other sectors that require skills? One speculated budgetary provision is on the National Skill Mission overhaul. It may be helped out with tax incentives for manufacturing units in a big way

  • The budget may declare incentives for hybrid vehicles. Automobile sector may get incentive for local manufacturing and research and development

  • Will the budget roll out a staggered phasing out of the Planning Commission? With just three years left for the 12th Plan to end, the government may not scrap it but may start turning it into a think tank with minimal staff. This staff will help out the proposed council of advisors to the Prime Minister

  • The NDA government will present its first budget in a while. The budget is preceded by finance minister Arun Jaitley's two tenets: 'avoid mindless populism' and 'fiscal discipline'

  • The budget has an unsettling prologue: a deficit monsoon, forecast of drought in elections-bound states and an economic slowdown. The Economic Survey presented yesterday has argued for strong fiscal discipline, which, if adhered to, means cut in spending. This makes the budget a challenge, particularly for a new government, to balance both growth and spending

  • In the interim budget approved in February by then outgoing UPA government, social spending was proposed at Ôé╣5.55,322 crore. Given the overt use of the expression "fiscal discipline" by the finance minister, one may not expect more spending on this. But in a drought year this may be politically challenging decision

  • There may be a reshuffling of central schemes to retain the same rural development budget by re-allocating funds for key programmes like MGNREGA. Everyone is eagerly waiting to see how the NDA government deals with the programme. The budget will indicate how the new government approaches previous government's flagship programmes

  • The Food Security Act is another UPA flagship programme that the NDA has to deal with. It has already delayed its roll out by three months (till August). The budgetary allocation will indicate how it wants to implement the food law. BJP ruled states like Chhattisgarh and Madhya Pradesh opposed certain aspects of the law

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