First reaction on Union Budget 2016-17

First reaction on Union Budget 2016-17

The finance minister has proposed the budget for financial year 2016-17 in the Lok Sabha today. However, it is very early to provide reaction without reading in detail about the budget. Overall it is balance budget and truly reflects to PM Modi’s vision of India’s growth.

In this budget, it has been clearly seen that government has totally focused towards rural economy and boosting infrastructure like highway, roads. It is very good that 20,000 crore has been allocated for irrigation. Irrigation is very vital thing for our county’s farmer and I myself come from farmer background can know its importance very well. It is very good step towards improve agriculture yields which directly benefit to farmer and our economy also.

Apart from irrigation there is 2.7 lakh crore allocated for village which is highest ever allocation in Indian budget history and 288% more from last year budget provision. By May 2018 all village would be electrified and all village roads connected with states both f these are very impressive mandate in this budget.

There are insurance scheme and LPG connection scheme for poor families. It shows the seriousness of the government for social sector. There is also scheme to open 3000 generic medical shop across India to provide medicine in cheap rate for common citizen.

There are many tax reform has been introduced in this budget which would make life easier of tax payers. There is no change in tax slab but introduce additional tax rebate of Rs 3000 up to Rs 5 lakh income slab. HRA limit has been increased from Rs 24,000 to Rs 60,000 which is big relief for employees. There is also additional Rs 50,000 tax exemption for first time home buyer within Rs 35 lakh loan provided the home cost within Rs 50 lakh.

There is minor hike in service tax earlier it was 14.5% and now it would be 15%. There is increase of tax on tobacco products except Bidi. There has been hiked in surcharge up to 15% for the income of above Rs 1 crore. The above Rs 10 lakh cars would be costly now.

The most important things are that FM has been stick on fiscal deficit target and no increment in non plan expenditure. It will increase govt’s credibility among foreign , institutional and domestic investors. There are many other points in budget which we will discuss in next article.

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Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com