Mukesh Bhavsar

Why?

• Financial planning• Policy changes can have big impact on lives of common man• Because your money counts!

History• The word Budget was derived from the French word, bougette• 1860, India’s first budget was presented by James Wilson of East India Company to the British Crown• India started following the April 1- March 31 financial year from1867. Prior to 1867, the financial year would begin May 1• Independent India’s first budget was presented in November 1947 by R. K. Shanmukham Chetty (Interim Budget)• Dr.Manmohan Singh, in his annual budgets from 1992-93, liberalised the economy, encouraged foreign investments and reduced peak import duty from 300 plus per cent to 50 per cent

What is Budget?

• Annual financial report presented by the Finance Minister on last working day of February• Detailed statement of accounts, estimated receipts, expenditure for the next financial year starting April 1 • The Finance Minister seeks Parliament’s approval to collect funds for expenditure via taxes, duties and borrowings• Part A deals with general economic survey of the country while Part B relates to taxation proposals

How?

• Formulated after a detailed consultative process • All ministries and departments, states, union territories, autonomous bodies, and the defence forces present their expenditure and earning estimates to the Ministry of Finance • The Finance Ministry along with the Planning Commission (NITI) also seeks the views of various stakeholders like farmers, business bodies, foreign institutional investors and economists• Officials who are part of the Budget process are kept in isolation

Budget 2015

• Budget expenditure of 17.77 Lakh Crore• GDP projection- 8 to 8.5% • Manufacturing- • Defence- 2.46 lakh Cr. (14%)• Agriculture-• Education-• Health-• Infra- 70,000 Cr.• Black money- cash transfer limit, Penalty, Benami bills• Comparison with other countries

Budget 2015

• Corporate tax cut from 30 to 25%• Swachh Bharat, Make in India, Jan Dhan, Aadhar and Mobile (JAM) - for Direct Benefit Transfer•MUDRA bank for SC/ST- 20,000 Cr for small enterprises, loan upto 10 Lakh with 7% interest

Highlights for construction industry

•Housing for all- 2 crore houses in Urban areas and 4 crore houses in Rural areas by year 2022 (Rs. 22,407 crore)•Completion of around 1 lakh km of Roads•Tax free infrastructure bonds for the projects in the rail, road and irrigation sectors (Rs. 70,000 crore)•Target of renewable energy capacity revised to 175000 MW till 2022•Development and job creation

TAX SLABS

• Relief of tax deductions go up to Rs 4.42 lakh• Deduction on health insurance premium- Rs 15,000 to Rs 25,000 (80D)• Deduction of up to Rs 50,000 over and above the limit of Rs 1.50 lakh towards NPS

(80CCD)• Sukanya Samriddhi Scheme- 9.1% interest, 21 year age maturity

Major changes in tax saving limits

For Us?

•Limit of deduction of health insurance premium increased from Rs 15000 to Rs 25000•PF 12% of Rs.6500 or basic (780 pm), now its 12% of Rs.15000•Service tax has been raised to 14 percent from 12 percent- eating out, grooming, movies, phone bills and grocery shopping

Major Challenges?

• Agricultural income under stress (% contribution to GDP)• Increasing investment in infrastructure • Decline in manufacturing • Resource crunch in view of higher devolution in taxes to states • Fiscal target of 3.9% of GDP

Plan to meet these challenges

•More investment from public sector •Make in India programme to create jobs in manufacturing•Continue support to programmes with important national priorities such as agriculture, education, health, MGNREGA, rural infrastructure including roads•Disinvestment in loss making units, and some strategic disinvestment•Challenge of maintaining fiscal deficit of 4.1% of GDP met in 2014-15