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Union budget focuses on rural economy, small tax payers

Finance Minister Arun Jaitley gave relief to small tax payers, pushed the rich to spend more while focusing on the rural economy with much higher fiscal expenditures on Monday.

Policy Pulse
Publish Date: Feb 29 2016 2:01PM | Updated Date: Feb 29 2016 2:01PM

Union budget focuses on rural economy, small tax payers

 In his third straight budget in the Parliament, Finance Minister Arun Jaitley gave relief to small tax payers, pushed the rich to spend more while focusing on the rural economy with much higher fiscal expenditures on Monday.

 
He also gave some relief for people living in rented houses  and said they will be eligible for deductions of up to Rs.60,000 from current Rs.24,000. 
 
Jaitley also said the ceiling of tax rebate for tax payers with income up to Rs.500,000 per year was being raised to Rs.5,000 from current Rs.2,000.
 
But for larger tax payers, the finance minister said, the income tax supplement of 12 percent at present was being hiked to 15 percent for incomes beyond Rs.1 crore per annum. 
 
Jaitley also said that the fiscal deficit target of 3.9 percent of GDP for the current fiscal will be met.
 
In a shift from the past, where the Centre expenditure could be defined between productive and administrative expenses, Jaitley said the classification of plan and non-plan can be done away with from next year. 
 
In his budget, that lasted for around 75 minutes, Jaitley said India's growth has expanded 7.5 percent, inspite of slowdown in exports, even as inflation had eased, bringing some respite to the public. 
 
The minister added that his budget will look at three pillars in right earnest: Raising domestic demand, carrying out reforms and A prudent fiscal policy.
 
 He also promised allocation of more money for rural sector, infrastructure, social sector and farm.
 
Jailey also sid that the Centre had targeted agriculture credit of Rs.8.5 lakh crore in 2015-16, which was being improved to Rs.9 lakh crore in the next fiscal. 
 
Rs.19,000 crore will be allocated for rural roads development programme, the minister said.
 
On the whole, Rs.87,765 crore was being allocated for rural development as a whole.
 
Jaitley also stressed on the need to spread digital literacy in rural areas. 
 
In addition, Rs.8,500 crore was being allotted towards rural electricity, targeting cent percent rural electrification by May , 2018.
 
Jaitley also assured that the government intended to double the income of farmers in five years, besides allotting Rs.35,984 crore towards welfare of farmers. The proposals also included universal coverage of cooking gas in the country, with a massive mission towards this aimed at the poor people.
 
On health sector, the minister said, a new scheme will provide medical cover up to Rs.1 lakh per family.