Highlights of Union Budget 2014

Here are the highlights of Union Budget 2014 tabled by finance minister Arun Jaitley on Thursday:


* ​Indian Custom Single Window Project to be taken up for facilitating trade. 
* Clean energy cess increased from Rs 50/ tonne to Rs 100/tonne. 

* Additional 5% excise tax to be levied on aerated drinks with added sugar (cold drinks). Tobacco products also to get costly as excise duty hiked to 72%

* Government announces reduction in excise duty for specified food package industry from 10% to 6%.

*​ Excise duty on footwear reduced from 12% to 6%

* Basic custom duty on LED panel below 19 inch made nil.

* Government announces measures to encourage manufacture of LCD/LED panels of TVs. 

* Housing loan rebate to raised from Rs 1.5 lakh to Rs 2 lakh.

* Net effect of direct tax proposals is revenue loss of Rs 22,200 crore.

* Government proposes to increase investment limit under Section 80C from Rs 1 lakh to Rs 1.5 lakh. 

* Tax exemption limit for small and marginal, and senior tax payers changed from Rs 2.0 to Rs 2.5 lakh. For senior citizens, no tax for income up to Rs 3 lakh per annum. 

* No changes in tax rate. 

* PPF limit to be raised to Rs 1.5 lakh: Jaitley

* Rs 100 crore for training of sportspersons for upcoming Asian Games.

* Government announces Rs 150 crore for communication needs of Andaman and Nicobar islands.

* Government announces Arun Prabha channel for northeastern region; will be 24/7 channel.

* Rs 1000 crore provided for rail connectivity in northeastern region.

* Programme for displaced Kashmiri migrants with Rs 500 crore to be started.

* Rs 100 crore set aside for project to link rivers.

* Government announces Rs 100 crore for development of Archaeological sites. Gaya to be developed as world class tourism spot.

* Rs 5000 crore set aside for defence outlay over and above amount provided under interim budget.

* National Police Memorial to be set up. Rs 50 crore set aside for this purpose.

* Rs 100 crore set aside for development of Technology Development Fund.

* Rs 100 crore War Memorial at Princess Park, India Gate. 

* Policy of One Rank One Pension to be adopted for defence personnel.

* RBI will create framework for licenses of small banks.

* Government aims to provide all households with banking facilities to empower the weaker sections; there should be atleast 2 bank a/cs in each household.

* Urgent need to converge current Indian standard with international accounting standards: Jaitley

* Rs 37, 800 crore allotted for National Highways.

* Revision of rate of royalty on minerals to be taken up on request from the states.

* In order to complete gas grid, 15000 km of additional pipeline to be developed through PPP mode.

* ​New and renewable energy deserves high priority; ultra modern power projects to be taken up in Rajasthan, Tamil Nadu, Ladakh with Rs 500 crore.

* Rs 4200 crore set aside for Jal Marg Vikas project on river Ganga connecting Allahabad to Haldia , over 1620 km.

* Scheme for development of new airports at tier II and III cities through PPP mode.

* Rs 200 crore set aside for 6 more textile clusters in Rae Bareily, Lucknow, Surat, Bhagalpur. Rs 50 crore set aside for Pashmina Production program in J&K.

* MSMEs are the backbone of the economy; to be revived through a Committee to examine and report in three months.

* 6 more textile clusters to be set up.

* Industrial Smart Cities to come up at 7 cities.

* All govt departments and ministries to be integrated through E-platform by 31 December this year.

* Rs 100 crore set aside for Kisan Television to provide real time information on various farming and agriculture issues. (Read story here)

* National Industrial Corridor to be set up. Rs 1000 crore set aside for this.

* Rs 5000 crore short time rural credit refinance fund for 2014-15.

* Rs 50 core set aside for indigenous cattle breed and blue revolution for inland fisheries.

* Propose to provide finance to 5 lakh landless farmers through NABARD.

* Govt will initiate scheme to provide a soil health card; Rs 100 crore set aside. Rs 56 crore for soil testing labs across the country.

* Agriculture University in Andhra Pradesh and Rajasthan, and Horticulture University in Haryana, Telangana; Rs. 200 cr set aside by the government.

* Slum development to be included in Corporate Social Responsibility activities.

* Govt announces Rs 100 crore for modernization of madrassas.

* Govt announces development of Metro rails in PPP mode; Rs 100 crore set aside for metro scheme in Ahmedabad and Lucknow.

* Rs 100 crore set aside for Community Radio Centres; 600 new and existing ones will be supported.

* National Rural Internet and Technology Mission; Rs 500 crore set aside.

* Govt proposes to set up Center of Excellence in MP named after Lok Nayak Jai Prakash Narayan.

* 5 more IITs and 5 IIMs to be set up .

* Propose to set up four more AIIMS; Rs. 500 crore set aside for this. Six new AIIMS started recently have become functional. Four new AIIMS will be set up in Andhra Pradesh, West Bengal, Vidarbha and Purvanchal. (Read story here)

* Govt proposes National Housing Banking programme; sets aside Rs 8000 crore for this program.


Union Budget 2014 through infographics


* Pradhan Mantri Gram Sadak Yojana has a massive impact on rural development; Govt sets aside Rs 14,389 crore for this scheme.

* Crisis Management Center for women at Delhi; money to be provided from Nirbhaya fund.

* Govt announces Beti Padhao, Beti Badhao Yojana; sets aside Rs 100 crore for this. (Read story here)

* Safety of women of prime importance.

* EPFO will launch a unified account scheme for portability of Provident Fund accounts.

* Schemes for disabled persons in the country. 15 new Brail presses to be established and revival of 10 existing.

* Rs 50,548 crore proposed for Schedule Caste development.

​* Govt committed to providing 24/7 power supply to all homes. Deen Dayal Upadhyay Gram Jyoti Yojna for electricity supply to rural areas.

* Rs 200 crore for 'Statue of Unity' of Sardar Vallabh Patel.






* Pradhan Mantri Krishi Sichayin Yojana to be started for irrigation.

* We will examine proposal to give additional autonomy to banks and make them more responsible: Jaitley

* E-visas to be introduced at nine airports in India in phased manner. (Read storyhere)

* FDI in insurance to be increased to 49%

* FM announces FDI in defence up from 26 to 49 % with Indian management and control

* Transfer pricing is major area for litigation; proposes changes in transfer pricing regulation: Jaitley

* I propose to strengthen authority for advance ruling in tax: Jaitley

* Aim to achieve 7-8 per cent economic growth rate in next 3-4 years.

* We wish to provide an investment friendly taxation system: Jaitley

* This govt will not ordinarily change policies retrospectively which creates a fresh liability.

* GST will streamline tax administration and result in higher tax collection for center and states. (Read story here.)

* A new urea policy would be formulated.

* Considering that we had two years of low GDP growth, a large subsidy burden, target of 4.1% fiscal burden is daunting: Jaitley

* We must address the problem of black money: Jaitley

* Iraq crisis leading behind an impact. Inflation has remained at elevated level: Jaitley

* We have taken up the challenge in the right ernest; will create a vibrant and strong India: Jaitley.





* The task before me is very challenging. We need to introduce fiscal prudence. there is an urgent need for more reforms.

* The steps I will announce are only the beginning of the journey we wish to take for macro economic stabilization: Jaitley

*People below poverty line anxious to free themselves: Jaitley

* Green shoots of recovery seen in world economy.

*​ We look forward to lower inflation: Jaitley

Source: TOI

Bihar’s growth is derived from an infrastructure push and social change

Narendra Modi and Nitish Kumar are not just political foes. They also preside over two rival and disparate growth models in their respective states. There is a common thread, though, between the two warring politicians: good governance; but that is where the commonality ends. On the one hand, Modi has relied on a private sector-driven model that has made it easy for industries to find land and begin operations; and development is seen as a trickle-down effect of this process. On the other, the Bihar model works through direct government intervention, and development is defined both in terms of growth of infrastructure as well as social change.

Bihar’s inclusive double-digit growth has found resonance in the most unexpected of quarters. The World Bank, appreciating the state’s progress report, recently said it is considering doubling its soft loan to $1 billion. Onno Ruhl, World Bank country director, summed up the Bihar case succinctly when he said Kumar had made “human resources development his key priority along with law and order and infrastructure”.

In July, the state drew praise from Unicef. “Bihar is becoming polio-free, which is appreciable. The vaccination rate is higher than the national average, which is praiseworthy,” said Louis-Georges Arsenault, Unicef India head.

Double-Digit Growth
Growth figures for Bihar are reflective of the all-round optimism about the state’s performance. Despite a global slowdown and sagging domestic demand that saw the country’s gross domestic product (GDP) growth rate plunge to 5 per cent for 2012-13, Planning Commission data showed Bihar bucking the trend and posted a robust 9.48 per cent growth. “Bihar’s state gross domestic product (SGDP) is not only higher than the previous year, but we also expect it to be the highest among all states,” says Vijay Prakash, the state’s planning and development department secretary.

The sterling performance was scored on the back of a sharp increase in public and government expenditure that rose 22.6 per cent in 2012-13, and a spike in construction, communication, trade, transportation, banking and insurance sectors. Construction did particularly well, posting a 21 per cent growth, with the private sector taking the lead.

This is not a one-off. In 2011-12, Bihar posted a growth rate of 13.26 per cent and won plaudits for being the fastest growing state; for the 11th Five-year Plan period (2007-12), it grew at a stunning 11.95 per cent.

There is no doubt that the change in Bihar’s fortunes came with the election of Kumar, of the Janata Dal (United), as chief minister in 2005. He ushered in a regime committed to good governance and a vision of inclusive growth. In comparison, the earlier two decades were a period of stagnation. During 1980-90, the state grew at 4.66 per cent; over the next decade (1991-99), the SGDP growth fell to a miserable 2.88 per cent.

These figures are significant when comparing the models of Bihar and Gujarat. When Modi took over as Gujarat’s CM in 2001, the state was already on a strong growth trajectory. During 1991-1999, Gujarat recorded the highest growth rate in India, at 8.15 per cent. The poor had fallen to just 14 per cent, against 24.2 per cent in the previous decade. In comparison, Bihar had over 42 per cent of its population living in poverty in the 1990s. Also, in 1995-96, the private sector was non-existent in Bihar, with private projects contributing just 2.7 per cent to the SGDP, as opposed to 57.7 per cent in Gujarat.

Earlier this year, Avantika Bhuyan, member secretary of the Asian Development Research Institute (ADRI), put the difference between Gujarat and Bihar in a national daily thus: “It’s difficult to call development in Gujarat the ‘Narendra Modi Model’, as the spectacular economic growth can’t be attributed to an individual. Unlike other states, Gujarat has had a proper social construct and a succession of leaders who created its growth trajectory. Modi is not the initiator of the growth model. In contrast, Nitish Kumar is a stand-alone example in Bihar, who has pursued the development agenda for the first time. Unlike Modi, Kumar had to travel a long way.”

Social Change
Bihar has scored not just on economic statistics. There has also been a consistent effort to attack poverty and bring about social change. Recent data shows that Bihar, along with Orissa, has had the best positive change in below poverty line (BPL) numbers. They fell from 54.4 per cent in 2004-05 to 33.7 per cent in 2011-12. While still high, they’ve seen a significant 20 per cent drop.

The state is also a success story in terms of the health and education sectors. Though it’s at the bottom with 63.8 per cent literacy, it has managed to increase the number of male literates by 16.8 per cent and female literates by 20 per cent. In The New Bihar, author Rukmini Banerjee notes that the state has applied several unconventional ways to make schooling more accessible to rural kids. This includes providing free cycles for girls, improving the quality of teachers via new training centres, and a revamped teacher-training curriculum. For students, state-wide summer camps are organised to address problems such as lack of basic reading skills and a poor grasp of arithmetic.

As many commentators have noted, CMs have enormous power and flexibility. If the man at the helm in the state — in this case, Kumar — is serious about development, historical disadvantages such as backwardness are not major stumbling blocks. Good governance is all about the push from the top, and that’s where Kumar has done well.

Miles To Go
But a rapid growth rate should not belittle the fact that the state has miles to go. Though feudalism has been officially abolished, the state is among the most backward in terms of caste relations that often result in violence. The carving out of Jharkhand from Bihar (in November 2000) took away the bulk of the state’s wealth — an area that accounts for 40 per cent of the country’s mineral deposits. Though it has doubled its per capita income, in absolute terms, Bihar remains India’s poorest region, with an annual per capita income of Rs 14,268 in 2012-13 — a little over one-third of the national average of Rs 39,143. Agriculture, too, is facing a crisis in the state with a tepid growth of 6.27 per cent in 2012-13, half that of the previous fiscal.

The situation could get worse with the vagaries of the monsoon. This year, the rains have been 37 per cent deficient, raising the spectre of drought. With as many as 33 of the state’s 38 districts of the state declared drought-hit, the chief minister has demanded Rs 12,000 crore in central assistance.

As ADRI’s Bhuyan puts it, “the Bihar model is construction-centric — around roads and bridges”, and will, thus, need a lot more central infusion to take it out of the woods. It’s in this context that Kumar raised the demand for ‘Special Status’ for Bihar — a promise the state was made when mineral-rich Jharkand was separated. It’s also a winning card for the CM for the 2014 Lok Sabha elections.

Meanwhile, Bihar is no more the ‘Bimaru’ state dependent on the earnings of its migrant labour. Punjab is already facing the problem of the vanishing tribe of workers from Bihar who have returned home. Addressing a rally in March this year at Delhi’s Ramlila Ground, Kumar had told a cheering crowd: “The situation has changed. ‘Bimaru’ Bihar is now on the path of progress and it can present the real model for development that is equitable and sustainable.”

Source: BW