Union Budget
NEW DELHI: Here are the highlights of Union Budget 2014 tabled by finance minister Arun Jaitley
on Thursday:
* Tax proposals on indirect tax front would yield Rs 7,525 crore.
* Indian Custom Single Window Project to be taken up for facilitating trade.
* Clean energy cess increased from Rs 50/ tonne to Rs 100/tonne.
* Additional 5% excise tax to be levied on aerated drinks with added sugar (cold drinks). Tobacco
products also to get costly as excise duty hiked to 72%
* Government announces reduction in excise duty for specified food package industry from 10%
to 6%.
* Excise duty on footwear reduced from 12% to 6%
* Government announces measures to encourage manufacture of LCD/LED panels of TVs.
* Housing loan rebate to raised from Rs 1.5 lakh to Rs 2 lakh.
* Net effect of direct tax proposals is revenue loss of Rs 22,200 crore.
* Government proposes to increase investment limit under Section 80C from Rs 1 lakh to Rs 1.5
lakh. (Read story here)
* Tax exemption limit for small and marginal, and senior tax payers changed from Rs 2.0 to Rs
2.5 lakh. For senior citizens, no tax for income up to Rs 3 lakh per annum.
* No changes in tax rate.
* PPF limit to be raised to Rs 1.5 lakh: Jaitley
* Rs 100 crore for training of sportspersons for upcoming Asian Games. (Read story here)
* Government announces Rs 150 crore for communication needs of Andaman and Nicobar islands.
* Government announces Arun Prabha channel for northeastern region; will be 24/7 channel.(Read
story here)
* Rs 1000 crore provided for rail connectivity in northeastern region.
* Programme for displaced Kashmiri migrants with Rs 500 crore to be started.
* Rs 100 crore set aside for project to link rivers.
* Government announces Rs 100 crore for development of Archaeological sites. Gaya to be
developed as world class tourism spot.
* Rs 5000 crore set aside for defence outlay over and above amount provided under interim budget.
* National Police Memorial to be set up. Rs 50 crore set aside for this purpose.
* Rs 100 crore set aside for development of Technology Development Fund.
* Rs 100 crore War Memorial at Princess Park, India Gate.
* Policy of One Rank One Pension to be adopted for defence personnel.
* RBI will create framework for licenses of small banks.
* Government aims to provide all households with banking facilities to empower the weaker
sections; there should be atleast 2 bank accounts in each household.
* Urgent need to converge current Indian standard with international accounting standards: Jaitley
* Rs 37, 800 crore allotted for National Highways.
* Revision of rate of royalty on minerals to be taken up on request from the states.
* In order to complete gas grid, 15000 km of additional pipeline to be developed through PPP
mode.
* New and renewable energy deserves high priority; ultra modern power projects to be taken up in
Rajasthan, Tamil Nadu, Ladakh with Rs 500 crore.
* Rs 4200 crore set aside for Jal Marg Vikas project on river Ganga connecting Allahabad to
Haldia , over 1620 km.
* Scheme for development of new airports at tier II and III cities through PPP mode. (Read
story here)
* Rs 200 crore set aside for 6 more textile clusters in Rae Bareily, Lucknow, Surat, Bhagalpur. Rs 50
crore set aside for Pashmina Production program in J&K
* MSMEs are the backbone of the economy; to be revived through a Committee to examine and
report in three months.
* 6 more textile clusters to be set up.
* Industrial Smart Cities to come up at 7 cities.
* All govt departments and ministries to be integrated through E-platform by 31 December this year.
* Rs 100 crore set aside for Kisan Television to provide real time information on various farming
and agriculture issues. (Read story here)
* National Industrial Corridor to be set up. Rs 1000 crore set aside for this.
* Rs 5000 crore short time rural credit refinance fund for 2014-15.
* Rs 50 core set aside for indigenous cattle breed and blue revolution for inland fisheries.
* Propose to provide finance to 5 lakh landless farmers through NABARD.
* Govt will initiate scheme to provide a soil health card; Rs 100 crore set aside. Rs 56 crore for soil
testing labs across the country.
* Agriculture University in Andhra Pradesh and Rajasthan, and Horticulture University in
Haryana, Telangana; Rs. 200 cr set aside by the government.
* Slum development to be included in Corporate Social Responsibility activities.
* Govt announces Rs 100 crore for modernization of madrassas.
* Govt announces development of Metro rails in PPP mode; Rs 100 crore set aside for metro scheme
in Ahmedabad and Lucknow.
* Rs 100 crore set aside for Community Radio Centres; 600 new and existing ones will be
supported.
* National Rural Internet and Technology Mission; Rs 500 crore set aside. (Read story here)
* Govt proposes to set up Center of Excellence in MP named after Lok Nayak Jai Prakash Narayan.
* 5 more IITs and 5 IIMs to be set up .
* Propose to set up four more AIIMS; Rs. 500 crore set aside for this. Six new AIIMS started
recently have become functional. Four new AIIMS will be set up in Andhra Pradesh, West
Bengal, Vidarbha and Purvanchal. (Read story here)
* Govt proposes National Housing Banking programme; sets aside Rs 8000 crore for this
program.
Union Budget 2014 through infographics
* Pradhan Mantri Gram Sadak Yojana has a massive impact on rural development; Govt sets aside
Rs 14,389 crore for this scheme.
* Crisis Management Center for women at Delhi; money to be provided from Nirbhaya fund.
* Govt announces Beti Padhao, Beti Badhao Yojana; sets aside Rs 100 crore for this. (Read
story here)
* Safety of women of prime importance.
* EPFO will launch a unified account scheme for portability of Provident Fund accounts.
* Schemes for disabled persons in the country. 15 new Brail presses to be established and revival of
10 existing.
* Rs 50,548 crore proposed for Schedule Caste development.
* Govt committed to providing 24/7 power supply to all homes. Deen Dayal Upadhyay Gram Jyoti
Yojna for electricity supply to rural areas.
* Rs 200 crore for 'Statue of Unity' of Sardar Vallabh Patel.
* Pradhan Mantri Krishi Sichayin Yojana to be started for irrigation.
* We will examine proposal to give additional autonomy to banks and make them more responsible:
Jaitley
* E-visas to be introduced at nine airports in India in phased manner. (Read storyhere)
* FDI in insurance to be increased to 49%
* FM announces FDI in defence up from 26 to 49 % with Indian management and control
FOR TAXPAYERS
SMOOTH | I-T exemption limit up from 2L to 2.5L, top bracket saves 5,665 in tax Exemption
limit for those aged above 60 but below 80 also increased from 2.5 lakh to 3 lakh Deduction limit
under Section 80C up from 1L to 1.5L, resulting in a maximum possible tax saving of 16,995 a
year Deduction limit on interest for home loan increased from 1.5L to 2L, resulting in maximum
tax saving of 16,995
ROUGH | 3% education cess to continue10% surcharge continues for individuals with income over
1 crore
FOR INVESTORS
SMOOTH |Annual limit for PPF investment up from 1L to 1.5L Deduction for investment in New
Pension Scheme available to all pvt sector employees Minimum pension limit under employees pension
scheme set at 1,000 per month
ROUGH | Lock-in for long-term capital gains tax on sale of listed non-equity MFs raised to 3 years, tax
rate up from 10% to 20%
FOR CONSUMERS
SMOOTH | Free baggage allowance increased from 35,000 to 45,000 Customs duty on inputs for
durables like PCs, TVs and LED lights reduced Excise duty on footwear priced at 500- 1,000 halved to
6%
ROUGH | Cut & polished diamonds, coloured gemstones to attract 2% customs duty Radio taxis brought
under service tax net Excise duty on cigarettes, cigars, cheroots and cigarillos increased by 11%-72%;
excise duty on pan masala raised from 12% to 16% Prices of zzy drinks, avoured water, juices &
energy drinks to increase by 5%
OIL & GAS
STATE OF THE INDUSTRY Crude oil prices are expected to remain high at $105-110/ba r rel in
2014 owing to tensions in Iraq, Libya and Ukraine. Profitability of oil PSUs will improve, as underrecoveries fall by a third to Rs 90,000-1,00,000 crore, aided by regular diesel price hikes. Natural gas
demand is seen flat owing to low domestic output and high LNG prices. Gas prices could be hiked,
benefiting upstream companies but hitting city gas distributors.
BUDGET IMPACT
Overall under-recoveries are seen reducing to Rs 90,000-1,00,000 crore in 2014-15 from Rs 1,40,000
crore in 2013-14, due to a hike in retail diesel prices, stronger rupee and stable crude prices year-on-year.
The government is expected to share 50% of under-recovery burden. The total subsidy burden works out
to Rs 79,500-84,500 crore. Central excise duty on branded petrol is reduced to Rs 2.35 per litre. This is
unlikely to impact oil marketing companies majorly as branded petrol accounts for less than 5% of sales.
Overall impact is marginally positive for OMCs.
Cabinet nod for labour law reforms
New Delhi: The Union Cabinet on Wednesday approved amendments to three archaic labour laws aimed
at easing regulations which have acted as an obstacle to faster growth and hurt employee interests.
Sources said the Cabinet had approved amendments to the FactoriesAct, 1948, the Apprenticeship Act,
1961, Labour Laws ( Exemption from furnishing returns and maintaining of registers by certain
establishments 1988), a bold reform move expected to help attract investmentsand improve the ease of
doing business in the country.
The amendments to the FactoriesAct, 1948, is expected allow womenfor night duty with adequate safety
and provision for transport after work. This is expected to help several sectors such as textiles and
[Link] also aimed to raise the overtime hours from the current ceiling of 50hours per quarter to 100
hours per quarter. The amendment also proposes this limit to be increased to a maximum of 125 hours per
quarter in public interest with the approval of state government.
The amendments also seeks to ensure safer work environment for employees in hazardous environment
as well as provision of canteen facilities in respect of factories employing200 or more workers instead of
the present stipulation of 250 [Link] also provides for shelters or restrooms and lunchrooms in
factories employing 75 or more workers instead of the present stipulation of 150workers.
The amendments to the Apprenticeship Act, 1961, is expected to helpin skill development and training.
The move is aimed at providing flexibility to firms on hiring apprentices and removing restrictive clauses
for employers.