Union Budget 2015-16: Highlights
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The Union Budget 2015-16 was presented by Finance Minister, Arun Jaitley, on 28 Feb 2015. The speech chalked out an optimistic view towards the Indian economy, with an estimated GDP growth of 7.4 per cent for 2014-15 and 8-8.5 per cent for 2015-16, making India the fastest growing large economy in the world. The infrastructure sector, along with flagship projects like Make In India, Digital India, Skill India, Green India etc, were the major thrust areas.
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INFRASTRUCTURE
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Investment in infrastructure to go up by Rs 70,000 crore in 2015-16
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Increased outlays on roads and gross budgetary support to the railways, by Rs 14,031 crore, and Rs 10,050 crore respectively
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Capex of public sector units expected to be Rs 3,17,889 crore; an increase of approximately Rs 80,844 crore over RE 2014-15
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A National Investment and Infrastructure Fund (NIIF) to be set up with an annual flow of Rs 20,000 crore to it, to raise debt and invest as equity, in infrastructure finance companies such as the IRFC and NHB
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To permit tax free infrastructure bonds for the projects in the rail, road and irrigation sectors
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Ports in public sector to be encouraged to corporatize and become companies under the Companies Act
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Exemptions on service tax when provided to the government for a historical monument, archaeological site; canal, dam or other irrigation work; pipeline, conduit or plant for water supply; water treatment; sewerage treatment or disposal
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Connecting each of the 1,78,000 unconnected habitations by all weather roads by completing 1,00,000 km of roads presently under construction plus building another 1,00,000 km of road
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Rs 1,200 crore earmarked for DMIC project
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All India Institutes of Medical Sciences (AIIMS) to be set up in J&K, Punjab, Tamil Nadu, Himachal Pradesh and Assam; IIT in Karnataka; IIMs in J&K and Andhra Pradesh; three new National Institutes of Pharmaceutical Education and Research in Maharashtra, Rajasthan, and Chhattisgarh; Institutes of Science and Education Research in Nagaland and Odisha; a Centre for Film Production, Animation and Gaming in Arunachal Pradesh, for the North-Eastern States; and Apprenticeship Training Institute for Women in Haryana and Uttrakhand
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Rail Budget for 2015-16 has gone up from Rs 65,798 crore in 2014-15 to Rs 1,00,011 crore
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REAL ESTATE
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In respect of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INViTs), it is proposed that the sponsor will be given the same treatment on offloading of units at the time of listing as would have been available to him if he had offloaded his shareholding of special purpose vehicle (SPV) at the stage of direct listing. Further, the rental income arising from real estate assets directly held by the REIT is also proposed to be allowed to pass through and to be taxed in the hands of the unit holders of the REIT.
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POWER
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To set up five new Ultra Mega Power Projects (UMPPs), each of 4,000 MW in the plug-and-play mode. All clearances and linkages will be in place before the project is awarded by a transparent auction system to unlock investments to the extent of Rs one lakh crore
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Electrification of the remaining 20,000 villages by 2020
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The Ministry of New Renewable Energy has revised its target of renewable energy capacity to 1,75,000 MW till 2022, comprising 1,00,000 MW Solar, 60,000 MW Wind, 10,000 MW Biomass and 5,000 MW Small Hydro
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MANUFACTURING:
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GST to be put in place by 1 April, 2016
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An additional investment allowance (@15 per cent) and additional depreciation (@15 per cent) to new manufacturing units set up during the period 01.04.2015 to 31.03.2020 in notified areas of Andhra Pradesh and Telangana
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A Scheme for Faster Adoption and manufacturing of Electric Vehicles (FAME) with an initial outlay of Rs 75 crore for this scheme in 2015-16
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A Project Development Company to be set up manufacturing hubs in CMLV countries, namely, Cambodia, Myanmar, Laos and Vietnam, through separate SPVs
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Additional depreciation @ 20 per cent is allowed on new plant and machinery installed by a manufacturing unit or a unit engaged in generation and distribution of power. However, if the asset is installed after 30 September of the previous year, only 10 per cent of the additional depreciation is allowed. It is proposed to allow the remaining 10 per cent of the additional depreciation in the subsequent year
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Quote of the week:
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"The investment sentiment in the country has now turned positive and we need to accelerate this momentum.."
- Arun Jaitley, Minster of Finance
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