Union Budget 2016-17 Highlights - Major Developments : Focus on Panchayat and Rural Development [ Current Affairs ]


Finance Minister Arun Jaitley presented the Union Budget for 2016 - 17. And he has admit that CPI rise has come down to 5.4 % from 9 plus. Highlights of the Budget 2016 - 17 includes the following major breakthrough developments. Budget sees a slide in Share Market.


  • Infrastructure and agriculture cess to be levied.
  • Excise duty raised from 10 to 15 % on tobacco products other than beads
  • Service Charge of 1%- On purchase of luxury cars over Rs. 10 lakh and in-cash purchase of goods and services over Rs. 2 lakh.
  • SUVs, Luxury cars to be more expensive. 4 % high capacity tax for SUVs.
  • Companies with revenue less than Rs. 5 crore to be taxed at 29 % plus surcharge
  • Limited tax compliance window from Jun 1 - Sep 30 for declaring undisclosed income at 45 % incl. surcharge and penalties
  • Excise 1 % imposed on articles of Jewellery, excluding silver.
  • 0.5 % Krishi Kalyan Cess to be levied on all services.
  • Pollution cess of 1 % on small petrol, LPG and CNG cars;
  • 2.5 % on diesel cars of certain specifications;
  • 4 % on higher-end models.
  • Dividend in excess of Rs. 10 lakh per annum to be taxed at additional 10%.

Personal Finance

  • No changes have been made to existing income tax slabs
  • Rs 1, 000 crore allocated for new EPF (Employees’ Provident Fund) scheme
  • Govt. will pay EPF contribution of 8.33 % for all new employees for first three years
  • Deduction for rent paid will be raised from Rs. 20, 000 to Rs. 60, 000 to benefit those living in rented houses.
  • Additional exemption of Rs. 50, 000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
  • Service tax exempted for housing construction of houses less than 60 sq. m
  • 15 % surcharge on income above Rs. 1 crore


  • Rs. 38, 500 crore for Mahatma Gandhi MGNREGA for 2016 - 17
  • Swach Bharat Abhiyan allocated Rs. 9, 500 crores.
  • Hub to support SC/ST entrepreneurs
  • Government is launching a new initiative to provide cooking gas to BPL families with state support.
  • LPG connections to be provided under the name of women members of family: Rs. 2000 crore allocated for 5 years for BPL families.
  • 2.87 lakh crore grants to gram panchayats and municipalities - a quantum jump of 228%.
  • 300 urban clusters to be set up under Shyama Prasad Mukherji Rurban Mission
  • Four schemes for animal welfare.


  • 2.2 lakh renal patients added every year in India. Basic dialysis equipment gets some relief.
  • A new health protection scheme for health cover up to 1 lakh per family.
  • National Dialysis Service Program with funds thru PPP mode to provide dialysis at all district hospitals.
  • Senior citizens will get additional healthcare cover of Rs. 30, 000 under the new scheme
  • PM Jan Aushadhi Yojana to be strengthened, 300 generic drug store to be opened


  • Scheme to get Rs. 500 crore for promoting entrepreneurship among SC/ST
  • 10 public and 10 private educational institutions to be made world-class.
  • Digital repository for all school leaving certificates and diplomas.
  • Rs. 1, 000 crore for higher education financing.
  • Rs. 1, 700 crore for 1500 multi-skill development centres.
  • 62 new navodaya vidyalayas to provide quality education
  • Launch Digital literacy scheme to cover 6 crore additional rural households
  • Provide entrepreneurship training across schools, colleges and massive online courses.
  • Skill 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojna-FM Jaitley
  • National Skill Development Mission - training to 76 lakh youth. 1500 Multi-skill training institutes to be set up.


  • Rs. 3000 crore earmarked for nuclear power generation
  • Govt drawing comprehensive plan to be implemented in next 15 - 20 years for exploiting nuclear energy
  • Govt to provide incentive for deep-water gas exploration
  • Deepwater gas new disc to get calibrated market freedom, pre-determined ceiling price based on landed price of alternate fuels.

Investments and infrastructure

  • Rs. 27, 000 crore to be spent on roadways
  • 65 eligible habitats to be connected via 2.23 lakh kms of road. Current construction pace is 100 kms/day
  • Shops to be given option to remain open all seven days in a week across markets.
  • Rs. 55, 000 crore for roads and highways.
  • Total allocation for road construction, including PMGSY, - Rs. 97, 000 crore
  • India’s highest-ever production of motor vehicles was recorded in 2015
  • Total outlay for infrastructure in Budget 2016 now stands at Rs. 2, 21, 246 crore
  • New greenfield ports to be developed on east and west coasts
  • Revival of underserved airports.
  • Centre to Partner with States to revive small airports for regional connectivity
  • 100 % FDI in marketing of food products produced and marketed in India
  • Dept. of Disinvestment now will be called as Dept. of Investment and Public Asset Management
  • Govt will amend Motor Vehicle Act in passenger vehicle segment to allow innovation.
  • MAT will be applicable for startups that qualify for 100 % tax exemption
  • Direct tax proposals result in revenue loss of Rs. 1060 crore, indirect tax proposals result in gain of Rs. 20, 670 crore


  • Total allocation for agriculture and farmer welfare at Rs. 35984 crores
  • 28.5 lakh hectares of land will be brought under irrigation.
  • 5 lakh acres to be brought under organic farming over a three year period
  • Rs 60, 000 crore for recharging of ground water recharging as there is urgent need to focus on drought hit areas cluster development for water conservation.
  • Dedicated irrigation fund in NABARD of Rs. 20.000 crore
  • Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojna.


  • Rs 25, 000 crore towards recapitalization of public sector banks.
  • Operationalize Banking Board Bureau & stand behind public sector banks.
  • Increase Target of disbursement under MUDRA to 1, 80, 000 crore
  • Transfer of government stake in IDBI Bank below 50 % started
  • List General Insurance companies in the stock exchange
  • Increase ATMs, micro-ATMs in post offices in next three years

- Published on: February 29, 2016