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(Report) Union Budget 2014 Highlights & Key Features

Union Budget 2014 Highlights & Key Features

The Current Economic Situation And The Challenges

The state of world economy has been the most decisive factor affecting the fortunes of every developing country.
The world economy has been witnessing a sliding trend in growth, from 3.9 percent in 2011 to 3.1 percent in 2012 and 3 percent in 2013.
The economic situation of major trading partners of India, who are also the major source of our foreign capital inflows, continues to be under stress. United States has just recovered from long recession, Euro zone, as a whole, is reporting a growth of 0.2
per cent, and China’s growth has also slowed down.
The economic challanges faced by our country are common to all emerging economies.Despite these challanges, we have successfully navigated through this period of crisis.
Apart from embarking on the path of fiscal consolidation, the objectives of price stability, self sufficiency in food, reviving the growth cycle, enhancing investments, promoting manufacturing, encouraging exports, quickening the phase of implementation of projects and reducing a stress on important sectors were the goals set in 2012-13.

State of Economy

Deficit and Inflation
Investment
Foreign Trade
Manufacturing
growth.
Infrastructure
Exchange Rates
GDP Growth
UPA’s record of Growth

Report Card of 2013-14

De-controlling sugar, gradual correction of diesel prices, rationalization of railway fares, were some of the courageous and long over due decisions taken by the Government.
Applications were invited for issue of new bank licences.
DISCOMS, mostly sick are being restructured with generous central assistance.
12.8 lakhs land titles covering 18.80 lakh hectare were distributed under the Scheduled Tribes and Other traditional Forest Dwellers Act.
The oppressive colonial law of 1894 was substituted with the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act.
National Food Security Act was passed assuring food to 67 percent of the population/
households.
The new companies Act replaced a law of 1956 vintage.
The PFRDA Act was passed to establish a statutory regulator for the New Pension Scheme.

Economic Initiative

Centrally Sponsered Schemes were restructured into 66 Programs for greater Synergy.
Funds under these programs will be released as Central assistance to State Plan, thus giving greater authority and responsibility. As a result, Central assistance to plans of States & UTs will rise substantially from `136,254 crore in BE 2013-14 to `338,562 crore in 2014-15.
Record Capital expenditure of ` 257,641 crores in 2013-14 by public sector enterprises.
About 50,000 MW of Thermal and Hydel Power capacity is under construction after receiving all clearances and approvals. 78,000 MW of power capacity have been assured coal supply.
Liberalised FDI policy in tele-communication, pharmaceuticals, civil aviation, power trading exchange, and multi brand retail to attract large investment.
Approval to establish 2 semi conductor wafer fab units.
Approval of IT modernization project of Department of Post.
Kudankulam Nuclear Power Plant Unit-I achieved criticality and is generating 180 Milliion Units of power.
Fast breeder Reactor at Kalpakkam and 7 Nuclear Power Reactors under construction.
National Solar Mission to add 4 Ultra Mega Solar Power Projects each with the capacity of over 500 MW in 2014-15.
Ministry of MSME will create the ‘India Inclusive Innovation Fund’ to promote grass root innovations with social returns to support enterprises in the MSME sector with an initial contribution of `100 crore to the corpus of the fund.

Social Sector Initiative

A Venture Capital Fund to provide concessional finance to Scheduled Caste will be set up by IFCI with an initial capital of ` 200 crore which can be supplemented every year.
The restructured ICDS, under implementation in 400 districts, will be rolled out in remaining districts from 1.4.2014.
A National Agro-Forestry Policy 2014 has been approved.
A mechanism for marketing minor Forest produce has been introduced and an allocation of ` 444.59 crore has been made to continue the Scheme in 2014-15.
A new Plan Scheme with an allocation of `100 crore has been approved to promote
community radio station
New technologies such as JE vaccine, a diagnostic test for Thalassaemia and Magnivisualizer for detection of Cervical cancer have been delivered to people.
Additional Central Assistance to some States
A sum of `1200 crore as additional central assistance to North Eastern states, Himachal Pradesh and Uttarakhand in this financial year.

Overview of The Interim Budget

In order to sustain the pace of plan expenditure, it has been kept at the same level in
2014-15 at which, it was budgeted in 2013-14.
Ministries/Departments which run key flagship programmes have been provided adequate funds in 2014-15 either equal to or higher than in the BE 2013-14. These include Ministries namely, Minority Affairs, Tribal Affairs, Housing & Poverty Alleviation, Social Justice & Empowerment, Panchayat Raj, Driniking Water and Sanitation, Women & Child Development, Health & Family Welfare, Human Resource Development and Rural Development.

Railways

Budgetary support to Railways has been increased from ` 26,000 crore in BE 2013-14 to ` 29,000 crore in 2014-15.
It is proposed to indentify new instruments and new mechanisms to raise funds for Railway Projects.
SC Sub-Plan and Tribal Sub-Plan, Gender Budget and Child Budget
` 48,638 crore and ` 30,726 crore are allocated to the SC Sub-Plan and Tribal Sub- Plan respectively.
Gender Budget and Child Budget has ` 97,533 crore and ` 81,024 crore respectively. Non Plan Expenditure
Non Plan expenditure is estimated at ` 12,07,892 crore.
The expenditure on subsidies for food, fertilizer & fuel will be ` 246,472 crore slightly
higher than the revised estimates of ` 245,453 crore in 2013-14.
` 115,000 crore has been allocated for food subsidies taking in to account, Government‘s firm and irrevocable committment to implement the National Food
Security Act throughout the country.

Defence

10 per cent hike in Defence allocation has been given in comparison to BE 2013-14.
Government has accepted the principle of one rank one pension for the Defence Forces which will be implemented prospectively from the FY 2014-15. A sum of ` 500 crore is proposed to be transferred to the Defence Pension Account in the current Financial Year itself.

Central Armed Police Forces

A modernization Plan at a cost of `11,009 crore has been approved to strengthen the capacity of Central Armed Police Forces and to provide them the state-of-art, equipment and technology.

Financial Sector

All the announcements concerning the Financial sector made in the Budget Speech of February 2013 have been implemented.
` 11,300 crore is proposed to be provided for Capital infusion in Public Sector Banks.
5,207 new branches have been opened against the target of 8,023.
Bhartia Mahila Bank has been established.
` 6,000 crore and ` 2,000 crore have been provided to Rural and Urban Housing Funds respectively.
The target of ` 700,000 crore of Agricultural Credit is likely to be exceeded by the Banks. The target for 2014-15 is ` 800,000 Crore.
` 23,924 crore has been released under the Interest Subvention Scheme on farm loans, with effective rate of interest on farm loans at 4 percent including subvention of 2 percent and incentive of 3 percent for prompt payment.

Off-shore Accounts

The Government has succeeded in obtaining information on illegal off-shore accounts held by indians in 67 cases and action is under way. Prosecution for willful tax evasion have also been launched in 17 other cases. More enquiries have been initiated in to accounts reportedly held by Indian entities in no tax or low tax jurisdictions.Changes in Tax Rates

Budget Estimate

Fiscal Deficit in 2014-15 estimated to be 4.1 percent which will be below the target set by new Fiscal Consolidation Path and Revenue Deficit is estimated at 3.0 percent.
The estimate of Plan Expenditure is `555,322 crore. Non Plan expenditure is estimated at `12,07,892 crore.