By SP Tulsian and Ruma Dubey

Well, after a lot of hype and hoopla the D-Day is finally over. The most awaited event of the year for the market is over and done with. And we continue to wait.

If this was the test of Modi Sarkar, the much talked about promise of achche din, well, the Budget will not go down too well with the masses. He had talked about achche din for the masses, right? In that case, this Budget has done nothing for us, we the individual tax payers. The abolition of Wealth Tax and then levying a 2% surcharge on super-rich with income above Rs.1 crore per annum – how many does it really affect? Some 45,000-odd people. That in itself seemed like a token and really, does not hold too much relevance.

For the teeming middle class of India, this Budget has nothing, zilch, nada! Let us see what they have got or rather what they did not get….

• There was no increase in the Income tax limit– what we got was only a promise that he has good things in store in the future. Now that is like pacifying a crying child with an ice-cream in the evening but what about now?
• There was no rejig in the tax slabs; everything remains status quo.  So people like you and me continue to pay more, continue to reel under high costs and more importantly, search for the elusive good days. Kahan gaye woh din?
• What the FM gave was a hike in Health Insurance exemption under Section 80D, upped from Rs.15,000 to 20,000. Seriously, whom does this benefit? How many of the masses really buy a Health Insurance of Rs.20,000? Instead, if the FM had given us a exemption on Medical Allowance which is currently at Rs.15,000, it would have gone a long way in bringing some relief. But this Health Insurance benefit is no benefit at all; it is something merely on the paper.
• The only real advantage is the Travel Allowance deduction doubling from Rs.800/month to Rs.1600/month. But in the whole picture, this is like soothing the pain with a small cube of ice when there are 95% burns on the body.
• The FM has waxed eloquent about Housing for All by 2022, aiming to build 2 crore houses in rural India and 4 crore in urban India. Again, this sounds more like very tall talk; more chest beating rhetoric than something which seems achievable.
• Then there is the Housing Loan Repayment deduction at Rs.1.50 lakh under Section 80C. Isn’t this the same limit and section we invest in PPF? It is either/or, not both. So if a person repays his loan, thinking he will be getting a benefit apart from the money invested in PPF, he is grossly mistaken. Thus in that context, for many, this benefit will also remain largely on paper, unless he/she decides to not invest in PPF. Thus due to this, it was widely expected that the Housing Loan Repayment deduction would be hiked to Rs.2.50 lakh. As this too did not come through, no new benefit or deduction for the individual on any major count.
• Also no word on Sec 80TTA limit – this provides a deduction of Rs10,000 on your income from interest on saving bank accounts.  The FM would surely have known that many sections of farmers in India are rich and even in their much tom-tommed JanDhan account, it is very routine to see balances of over Rs.3 and 5 lakh. So what benefit does even this farmer get and what benefit do we get?  The fact that he neither lowered tax rates nor reduced tax slabs, one would have expected that to boost savings, the FM should have increased this 80TTA limit to Rs.50,000. Once again, silence on that front while our savings continue to get taxed.
• The Govt does not miss a chance to lambast the UPA govt and its misdoings. So how come no word on replacing the big flop show – Rajiv Gandhi Equity Scheme with a more investor friendly version, with a cap of Rs.2.5 to 5 lakh?
• The FM, instead of helping us save better, has opened up a door to deplete it some more. Service tax has been hiked from 12.36% to 14%. Yes, this is in line with the plan to move to GST by 1st April 2016. But this service tax is borne not by companies but by me and you directly. This also means the elusive house which you wanted to buy just got costlier. The onus is now back on the RBI to prop up falling demand and markets – to reduce rates.

Even for Corporate India, this Budget is really no great shakes. The corporate tax has been reduced from 30% to 25% but it remains ambiguous as it will come down over four years… which probably means for current fiscal same rate of 30% will remain.

The FM yesterday in the Economic Survey, expressed concern that exports have plateaued due to poor global demand. This Budget was the perfect time for him to introduce some export benefits u/s 80HHC. This would have gone a long way in making ‘Make in India’ a huge success. But this too was a missed opportunity.

The FIIs would be feeling much better off than the rest of India. GAAR, which is a major bone of contention for them has been postponed by two years to 2017. MAT has been rationalized. Yet, this does not mean that all is well and rating agencies will be placated and they will improve India’s rating.

They are sure to watch where the fiscal deficit heads.  The Fiscal deficit target for FY16 at 3.9% is revised upwards from 3.6% earlier, and the target is of 3.5% for FY17 and 3% for FY18. The FM has said that fiscal deficit target of 4.1% for current fiscal will be met though there has been no downward revision while we continue to enjoy benefits of lower crude. Thus in that context, an upward revision and no correction in current fiscal irks. What happens when crude starts climbing? Surely, the rating agencies will be in no tearing hurry to upgrade India; they will wait till end of the year and when a clearer picture emerges, they will act.

All in all, it was a damp squib of a Budget. Many called it a ‘balanced’ Budget but a closer look reveals that it was all over the place, trying to do too many things, placate too many factions. Well, you can make one person happy at one time but not all at same time…..how can this Budget be sarve bhavantu sukhinaha?

Quick Budget Highlights

• FY16 non-plan expenditure seen at about Rs.13.13 lakh crore
• Plan expenditure estimated at about Rs.4.65 lakh crore
• FY16 revenue deficit estimate at 2.8%
• Govt defers roll out of anti-tax avoidance rules GAAR by 2 years, to apply GAAR prospectively from 1^st April 2017
• To abolish Wealth Tax and bring in additional surcharge of 2% for super rich where earning is more than Rs.1 crore per annum; this move to bring in Rs.9000 crore
• Increase in limit in deduction of health insurance premium from Rs.15,000 to Rs.25,000 rupees and that for senior citizens at Rs.30,000
• Transport Allowance doubled to Rs.1600/month from Rs.800/month now
• Individuals can take a further deduction of up to 50,000 rupees for money allocated to a pension program.
• Increase in tax rebate for health insurance increased from Rs.15,000 to Rs.25,000
• To increase clean energy cess to Rs 200/metric tonne of coal from Rs. 100/MT of coal
• To increase service tax rate and education cess to 14% from 12.36%
• GST to be in place by April 2016
• To allocate Rs.34,700 crore to MNERGA, to increase MNREGA allocation by Rs.5000 crore
• To bring in fresh Bankruptcy Code in current fiscal
• To utilize the vast postal network for banking
• Pradhan Mantri Suraksha Bima yojana to offer Rs 2 lakh accident insurance cover for premium of Rs 12 per year
• To create a senior citizen welfare fund to help old age pensioners
• Investment in infrastructure to go up Rs.70,000 crore in 2015-16
• Plans to set up National Investment Infrastructure Fund, allocation of Rs.20,000 in FY16
• Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects
• Ports in public sector to be encouraged to Corporatize under Companies Act
• To allocate Rs.1000 crore for Nirbhaya Fund
• To allocate Rs.1200 crore for fats track corridor between Mumbai-Ahmedabad
• Defence allocation increases to Rs.2.4 lakh crore from Rs.2.22 lakh crore
• Allocate Rs.3,31,500 crore for health sector
• Public debt management to be set up this fiscal
• To set up five UMPPs, each of 4000 MWs, to unlock investments worth Rs.1 lakh crore, all linkages to be put in place first
• Foreign Exchange Management Act to allow for seizure of foreign properties and assets
• Quoting of PAN mandatory for all purchases above Rs.1,00,000
• To establish an autonomous bank board bureau to improve management of public sector banks
• To merge FMC with SEBI
• To do away with differentiation of FII and FDI
• Six crore toilets to be built
• Sanction of 1 lakh km of roads; Roads outlay increased by Rs.14,031 crore
• 6 crore houses by 2022, biggest construction project ever
• Propose to rationalize capital gains tax regime for REITS
• To allocate Rs.5300 crore micro irrigation
• Reduction in corporate tax from 30% to 25% over four years
• To rationalise and remove exemptions for corporate tax
• Exemptions for individual tax payers to continue
• To enact new law on Black Money
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NBFCs

• NBFCs registered with RBI with assets of 5 bln rupee and above will have access to recover debt under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI).
• This will empower banks to recover NPAs without court intervention

Tourism Boost

• To extend Visa-on-arrival facility to 150 nations from the present 43
• 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 toursim scheme

Renewable Energy

• Renewable energy target increased to 1.75 lakh MW by 2022
• Rs.75 crore outlay for electric vehicle manufacturing

Education

• To set up Educational Loan scheme for higher education
• Will soon be launching a new skill development mission
• to set up AIIMS this year in J&K, Punjab, Tamil Nadu, HP and Assam
• Apprentice training institute for women in Uttarakhand
• ISM Dhanbad to get IIT status
• New IIMs in J&K and AP

Gold

• To introduce gold monetisation scheme to allow depositors to earn interest
• To  introduce Indian made gold coin with Ashok Chakra to reduce demand for foreign gold coins and help recycle gold available in country

Welfare Schemes

• 50,000 toilets constructed under Swachh Bharath Abhiyan.
• Two other programmes to be introduced- GST & JAM Trinity. GST will be implemented by April 2016.
• MUDRA bank will refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
• Housing for all by 2020.
• Upgradation 80,000 secondary schools.
• DBT will be further be expanded from 1 crore to 10.3 crore.
• For the Atal Pension Yojna, govt. will contribute 50% of the premium limited to Rs. 1000 a year.
• New scheme for physical aids and assisted living devices for people aged over 80 .
• Govt to use Rs. 9000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
• Rs. 5,000 crore additional allocation for MGNREGA.
• Govt. to create universal social security system for all Indians.