Budget 2015Views & Vows

Manu Antony

Manu Antony

Budget – The Indian Scenario

Fiscal Policy

Policy Reforms

NII Fund Bankruptcy Code FMC to be merged with SEBI Public Debt Management Agency Curbing Black Money

Fund Allocation Tax Policies Investment and Disinvestment Schemes New Projects Growth Projections

The working backgroundFalling Oil PricesLand Acquisition BillMake in India Campaign14th FC reports

Union Budget - Bottom-line

Manu Antony

An act of Balancing?!• Despite of financial constraints, (NR Growth rate merely 1.4% ) the FM has substantially increased capital spending in Infrastructure.• Long term objectives and Vision

• In order to create elbow room for spending, the fiscal consolidation target was rolled. (3.9% to 3.6%)• Nothing for the middle class tax payer.• Effects unclear

Manu Antony

NDCR 4%Custom

s 9%Service Tax +

9%Non Tax Revenue

10%

Union Excise Duty 10%

Income Tax 14%

Corporate Tax 20%

Borrowings and Liabilities 24%

States Share 23%

Interest Payments 20%

Central Plan 11%

Defence 11%

Other NPE 11%

Subsidies 10%

P.A 9%

NPA 5%

How

it C

omes

How

it g

oes

The Rupee Break up

Economic Growth

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GDP Projections 7.4% real growth for 2014 – 15 8.1% to 8.5% projected growth for 2015 – 16

Manu Antony

Vows Trade deficit Interest rates Struggling Industrial Production Pending Land Acquisition Bill Pending GST

Manu Antony

Confused Market – The D Day charts (28/02)

Series1

2840028600288002900029200294002960029800

2941129312

29118

29512

29102

29568

2922729018

28837

29115

29362

Manu Antony

Fiscal Deficit

2006-07 2008-09 2010-11 2012-13 2015-16012345678

3.32.89

6.83

4.913.9

Deficit Trends

As a % of GDP

Currently ranging around 4.1% of GDPExpected to reach 3.6% by the end of FY. Possible disinvestments in SUUTI, Balco and Hindustan Zinc Strengthening MSMEs Make in India Black Money Policy

Manu Antony

Vows Expected Pay Commission Report Disinvestment cant be stretched for long Telecom Spectrum, Coal Mine Auctioning Depending too much on the oil prices can turn bitter

Infrastructure

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Proposed Plans National Optical Fibre Network Project 1126 km National Highways and 4351 km roads in LWE affected areas. Raising Teledensity.

Cooperative Federalism

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Transforming Practices 14th FC recommendations Delinking Schemes Land and Labour Reforms GST

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14th Finance Commission

Tax devolution based on Area, Population, Demography etc. Boost for State’s share in Divisible pool Delinking Central Schemes Parted grants for states (Local Bodies)

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Delinking SchemesNational E-governance

Plan Backward Regions Grant

Fund Modernisation of Police

ForcesRGPSAExport Infrastructure

Development etc.

Manu Antony

GST To be implemented from 01/01/2016 Concurrent implementation Uniform Tax law across state and centreAdministrative Convenience Provision for interstate tax credits

GST

SVAT

CST ED

ST

Manu Antony

Manu Antony

The GST mechanism

Will reduce the effective tax rate The one-line GST rates will be calculated first and then divided among State and Centre. Consumer states are benefitted C.A requirements and technical glitches

Taxes

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Indirect Tax

Corpo-ra-tion Tax

; 33.05%

In-come Tax

; 20.83%

Wealth Tax; 0.07%

Customs;

14.80%

Union Ex-cise

Du-ties

; 15.18%

Service

Tax;

15.83%

Taxes of U.T; 0.24%

Contribution to the Central Tax Pool

Corporation Tax Income TaxWealth Tax CustomsUnion Excise Du-ties

Service Tax

Taxes of U.T

Excise Duty 12.36% to 12.50% Service Tax 12.36% to 14.00% Increase in CENVAT Credit time period

Manu Antony

Direct Tax Applicability of GAAR deferred by 2 years Corporate I.T proposed to be reduced to 25% over four yearsWealth Tax abolished 2% additional surcharge on super rich Personal Tax rate slabs unchanged with addl. exemptions

Manu Antony

What's in there for an Individual? Health Insurance Premium Exemption under 80D has been raised from 15,000 to 25,000. Additional exemption of Rs 50,000 under 80CCD (NPS)

Manu Antony

Particulars Pre Budget Post Budget Pre Budget Post BudgetGTI 5,00,000 5,00,000 11,30,000 11,30,000

Deduction Under 80C 1,50,000 1,50,000 1,50,000 1,50,000Deduction Under 80CCD - 50,000 - 50,000Deduction Under 80D 15,000 25,000 15,000 25,000Pre Tax Income 3,35000 2,75,000 9,65,000 9,05,000Income Tax 8500 2500 1,18,000 1,06,000Less Rebate under 87A 2000 2000 - -

6500 500 1,18,000 1,06,000Surcharge 12% 0 0 0 0

6500 500 1,18,000 1,06,000Education Cess 3% 195 15 3540 3180Total Tax, Surcharge and Cess

6695 515 1,21,540 1,09,180

Difference – Saving 6180 12,360Saving Percentage 92.31% 10.17%

Manu Antony

Expectations..

34%

Keeping the savings – investment gap in check Harvesting from the reduced commodity prices Re routing the investment pattern

In 2011-14, homes and other domestic structures made up 34% of

GFC Formation

s in the Country.

Kerala

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What’s in it? Kochi Metro NISH University Rubber, Coffee, Tea and Spices Cochin SEZ and Shipyard

Practices & Priorities

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House hold savings in Capital Formation

Skill Development

Curbing Black money

Differential Taxation for Companies

What's Next..?

Manu Antony

Its time for a makeover...!!

Manu Antony

Queries??

Manu Antony

Thank you!!