ECONOMIC SURVEY 2014-2015

VOLUME 1                     VOLUME 2

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Gross Domestic Product (GDP)
  1. Current GDP : 7.4 %
  2. BASE YEAR : 2011-2012 with improvised GDP calculating method.
  3. 2015/16 GDP growth seen at over 8 pct y/y
  4. Double digit economic growth trajectory now a possibility
  5. Economic growth at market prices seen between 8.1 – 8.5 percent in 2015/16 on new GDP calculation formula
  6. Total stalled projects seen at about 7 percent of GDP, mostly in private sector
Current Account Deficit (CAD)
  1. CAD to drop from 6.7 % to 1 % of GDP.
  2. Estimated at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP in 2015/16
Fiscal Deficit (FD)
  1. India must meet its medium-term fiscal deficit target of 3 percent of GDP
  2. Government will adhere to fiscal deficit target of 4.1 percent of GDP in 2014/15 and targeted 3.9% in 2015-2016
  3. Govt should ensure expenditure control to reduce fiscal deficit
  4. Expenditure control and expenditure switching to investment key
Cash Reserve Ratio (CRR)
Statutory Liquidity Ratio (SLR)
Inflation
  1. Inflation shows declining trend in 2014/15 and declined by over 6 % points since late 2013.
  2. Inflation likely to be below central bank target by 0.5 – 1 percentage point
  3. Lower inflation opens up space for more monetary policy easing
  4. Govt and central bank need to conclude monetary framework pact to consolidate gains in inflation control
  5. Consumer inflation in 2015/16 likely to range between 5-5.5 percent
Subsidies

Overhauling of subsidy regime would pave the way for expenditure rationalization

Human Development Index
Gender Inequality Ratio
Rupee Liquidity
  1. Liquidity conditions expected to remain comfortable in 2015/16
Forex Reserve
Criticism on Union Budget
  1. FM Arun Jaitely is raising additional resources through indirect taxes, which are regressive as they are harsher on the poor. The middle class also unhappy that there has been no change in either the income-tax slabs or the rates.
  2. Opposition labeling the Modi govt. pro-corporate, anti-poor.
Important Persons in Circle
  1. Arun Jaitely : Finance Minister, GoI.
  2. Arvind Subramanian : Chief Economic Adviser, Ministry of Finance, GoI.
  3. John Mithai : Present First Budget after Republican.
  4. R. K. Shankutanam  Chetty : Present First Budget after Independence.
Achievement of Center
  1. प्रधानमंत्री जन धन योजना : Over 12.5 crore families have been brought into the financial mainstream across the country.
  2. Coal Auction : Coal bearing states will receive huge revenue which can be used for creation of long awaited community assets.
  3. स्वच्छ भारत: 5 Lakh toilets have already constructs in 2014-2015. the aim now is to the attain target of building six crore toilets.
Game changing Reforms
  1. Goods and service Tax (GST) : the much awaited  the state of the art indirect tax system will be launched by 1 April 2016.
  2. JAM trinity : JanDhanYojana-AdharCard-Mobile to implement direct benefit transfer in a leakage proof cash less manner.
  3. Monetary Policy Framework Agreement with RBI : the main objective of pact is to keep inflation below 6 %.
  4. नीती आयोग : Replace Planning Commission of India but this time govt. accepted recommendation of Planning Commission.
  5. पहल (प्रत्यक्षा हस्तांतरित लाभ): covers more than 9.75 crore LPG consumers and world’s largest cash transfer program
  6. MUDRA bank : refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
Important Facts about Economic Survey
  • Economic Survey is a collective effort, Economic Division of the Department of Economic Affairs and outside also.
  • Wealth tax, tax on railway passenger fee ware introduced for  first time in 1957-1958 Budget.
  • India has had 25 finance ministers since Independence in 1947 who have presented and passed in Parliament 83 Budgets — both interim and annual — so far.
  • John Mathai, in his Budget for 1950-51 proposed the setting up of the Planning Commission.
  • Arun Jaitley begins his Budget speech. “We have embraced the States as equal partners in the process of economic growth.”
  • अमृत महोत्सव 2022, 75 years of Independence completion.

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Sector-wise highlights

TAXATION

1    Wealth tax abolished.

2    Additional 2% surcharge for the super rich with income of over Rs. 1 crore.

3    Rate of corporate tax to be reduced to 25% over next four years from  30 % 2015-15

4    No change in tax slabs.

5    Yoga : Proposed to bring within charitable activities under Income tax act.

6    Total exemption of up to Rs. 4,44,200 can be achieved.

an individual tax payer can claim tax benefits for up to Rs. 4,44,200 in addition to the tax exemption.

Here is how you get there:

Deductions under 80C Rs. 1,50,000
Deductions under 80CCD for contribution to NPS Rs. 50,000
Interest on house property loan Rs. 2,00,000
Exemption with new transportation allowance of Rs. 1,600 per month Rs. 19,200
New deductible health insurance premium Rs. 25,000
Total Rs. 4,44,200

6    100% exemption for contribution to Swachch Bharat, apart from Corporate social responsibility (CSR).

7    Service tax increased to 14 per cent from present level of 12.36% to prepare for GST that is likely to result in rising costs of air travel, eating out and beauty services.

AGRICULTURE
1 Rs. 25,000 crore for Rural Infrastructure Development Bank.
2 Rs. 5,300 crore to support Micro Irrigation Programme.
3 Farmers credit – target of 8.5 lakh crore.
INFRASTRUCTURE
1 Rs. 70,000 crores to Infrastructure sector.
2 Tax-free bonds for projects in rail road and irrigation
3 PPP model for infrastructure development to be revitalized and govt. to bear majority of the risk.
4 Atal Innovation Mission to be established to draw on expertise of entrepreneurs, and researchers to foster scientific innovations; allocation of Rs. 150 crore.
5 Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.
EDUCATION
1 AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and Assam
2 IIT in Karnataka; Indian School of Mines in Dhanbad, Jharkhand  to be upgraded to IIT.
3 PG institute of Horticulture in Amritsar.
4 Kerala to have University of Disability Studies
5 Centre of film production, animation and gaming to come up in Arunachal Pradesh.
6 IIM for Jammu and Kashmir and Andhra Pradesh.
DEFENCE
1 Allocation of Rs. 2,46,726 crore; an increase of 9.87 per cent over last year.
2 Focus on Make in India for quick manufacturing of Defence equipment.
WELFARE SCHEMES
1 GST and JAM trinity (Jan DhanYojana,Aadhaar and Mobile) to improve quality of life and to pass benefits to common man.
2 Six crore toilets across the country under the Swachh Bharat Abhiyan.
3 MUDRA ( Micro Units Development Refinance Agency ) bank will refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
4 Housing for all by 2020.
5 Upgradation 80,000 secondary schools.
6 DBT will be further be expanded from 1 crore to 10.3 crore.
7 For the Atal Pension Yojana, govt. will contribute 50% of the premium limited to Rs. 1,000 a year.
8 New scheme for physical aids and assisted living devices for people aged over 80 .
9 Govt. to use Rs. 9,000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
10 Rs. 5,000 crore additional allocation for MGNREGA.
11 Govt. to create universal social security system for all Indians.
RENEWABLE ENERGY
1 Rs. 75 crore for electric cars production.
2 Renewable energy target for 2022: 100K MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro
TOURISM
1 Development schemes for churches and convents in old Goa; Hampi, Elephanta caves, Forests of Rajasthan, Leh palace, Varanasi , Jallianwala Bagh, Qutb Shahi tombs at Hyderabad to be under the new tourism scheme.
2 Visa on Arrival for 150 countries.
GOLD
1 Sovereign Gold Bond, as an alternative to purchasing metal gold.
2 New scheme for depositors of gold to earn interest and jewellers to obtain loans on their metal accounts.
3 To develop an Indian gold voin, which will carry the Ashok Chakra on its face, to reduce the demand for foreign coins and recycle the gold available in the country.
FINANCIAL SECTOR
1 Forward Markets Commission to be merged with the Securities and Exchange Board of India
2 NBFCs registered with the RBI and having asset size of Rs 500 crore and above to be considered as ‘financial institution’ under Sarfaesi Act, 2002, enabling them to fund SME and mid-corporate businesses
3 Permanent Establishment norms to be modified to that mere presence of offshore fund managers in the country does not lead to “adverse tax consequences.”
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