What Is Good And Bad In The Budget 2014-15?

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The Budget 2014-15

The Budget 2014-15

The budget can be a joy to behold. The good part here, is that the Finance Minister has not made exaggeratedly hopeful projections, and, therefore, the scope for disappointment could be reduced.

Good:

  • Bank loans for the infra sector to be exempt from CRR and SLR. This should reduce the cost of funds for these companies, and hopefully will boost the infrastructure.

  • Financial Year 2015 fiscal deficit targeted at 4.1 percent, FY16 at 3.6 percent.

  • Foreign institutional investors’ capital gains to be taxed, and not business income.

  • Tax-pass through allowed for real estate, infrastructure investment trusts to avoid double taxation.

  • Power plants are going operational in March 2015 to get adequate coal supply.

  • Tax holiday for power generation companies extended till 2017.

  • Subsidy expenses estimated at Rs 2.5 Lakh Crore, almost the same as in the interim Budget.

  • FDI in the insurance sector insurance from 26% to 49%.

  • I-T exemption limit hiked to Rs 2.5 lakh for those below 60 years and up to Rs 3 lakh for senior citizens.

  • Divestment targets not very aggressive at Rs 43,425 crore. This means that the government is not relying heavily on divestment to bridge fiscal deficit.

  • Budgetary provision for Pooled Municipal Debt Obligation enhanced from Rs 5000 crores to Rs 50,000 crores to promote and finance infrastructure projects in urban areas on shared risk basis.

Bad:

  • No move to repeal retrospective tax amendments

  • No clear plan to reduce subsidies.

  • No clear plan to recapitalize PSU banks or tackle the NPA problem

  • No reduction in gold import duty.

  • No clear timeline for implementation of GST

  • No mention of GAAR

  • Rs.200 crores set for Sardar Patel’s Statue.

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