Indian shares witnessed high volatility before closing notably higher on the day Finance Minister Arun Jaitley presented his full-year Budget. While the benchmark index S&P BSE Sensex rose 141.38 points or 0.48 percent to close at 29,361.50, the broader CNX Nifty index ended up 57.25 points or 0.65 percent at 8,901.85. The stock exchanges conducted a live trading session today, despite it being a Saturday.
Jaitley laid out a progressive and pragmatic budget aimed at reigniting growth. The budget appeared wide-ranging and inclusive, but the devil may lie in the details. In the absence of big bang reforms, the Sensex slumped by over 300 points early in the session before reversing losses to end the session on a positive note.
Private sector lender Axis Bank led the gainers with a 9 percent rally, while ICICI Bank, Tata Motors, Sun Pharma, Kotak Mahindra Bank and IndusInd Bank rose 4-6 percent.
Key takeaways from the budget
• The fiscal deficit target set at 3.9 percent of GDP for 2015-16
• The deficit proposed to be cut to 3 percent by 2017/18, one year later than previously expected
• GDP growth seen at between 8 percent and 8.5 percent
• Consumer inflation expected to remain close to 5 percent by March
• Commodities market watchdog FMC to be merged with the capital market regulator
• The RBI act to be amended this year to create a monetary policy committee and target low inflation
• Public debt management agency to be set up
• The Public Contract (Resolution of Disputes) Bill to streamline institutional arrangements for resolving various disputes to be introduced
• Goods and Services Tax to be implemented from April next year
• The distinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments, to be removed and replaced with composite caps
• Foreign investment to be allowed in alternative investment funds
• Emphasis on the need to cut subsidy leakages
• An autonomous bank board bureau to improve management of public sector banks to be established
• A national skills mission soon to enhance employability of rural youth will be launched
• Visa-on-arrival facility to be raised to 150 countries from 43
• Rs. 34,699 crore allocated for rural employment guarantee scheme in 2015-16
• A national investment infrastructure fund to be set up
• Second unit of Kudankulam nuclear power station to be commissioned in 2015-16
• Corporate tax proposed to be cut from 30 percent to 25 percent over the next four years to revive investment cycle
• All exemptions proposed to be rationalized and removed to eliminate tax disputes
• Regulatory process to be streamlined and a new bankruptcy code to be brought in to help increase the ease of doing business in India
• The threshold for the application of transfer pricing rules has been raised to Rs. 200 million from the current Rs. 50 million level to boost India's global competitiveness
• NBFC's with more than Rs 500 crore to come under SARFAESI Act Impact in matters relating to recovery of non-performing assets
• Capital gains regime for real estate investment trusts to be rationalized
• Wealth tax has been abolished, but a two percent surcharge imposed on the super-rich in the Rs 1 crore plus tax bracket
• Applicability of GAAR deferred by two years
• Investment in infrastructure hiked by Rs 70,000 crore in 2015-16 over the last year
• A Rs 20,000 crore National Investment and Infrastructure Fund, which would raise equity from outside, will be created
• Tax-free bonds for projects in railways, roads and irrigation projects to be introduced
• The public-private-partnership (PPP) mode of infrastructure development will be revisited and revitalized
• Five new ultra-mega power projects of 4000 MW, entailing investments of around Rs 1 lakh crore, to be set up in the plug-and-play mode
• The 'Make in India' policy to achieve greater self-sufficiency in the area of defense equipment, including aircraft.
• An additional 100,000 km of road to be built
• Ports in the public sector will be encouraged to corporatize to improve efficiency
• New laws proposed to deal with the menace of slush funds and tax evasion
• Benami Transactions (Prohibition) Bill to curb domestic black money to be introduced in the current session of Parliament
• Steps to be taken to incentivize use of credit and debit cards
• Quoting PAN mandatory for all sale and purchase of over Rs 1 lakh
• A "universal social security system for all Indians, specially the poor and unprivileged" to be established
• No change in individual tax slabs or minimum taxable limit
• Transport allowance exemption to be increased to Rs. 1,600 per month
• Tax benefits on health insurance raised to Rs. 25,000 from Rs. 15,000
• For senior citizens, the exemption would be up to Rs. 30,000
• Those over age 80, who are not covered by health insurance, to be allowed deduction of Rs 30,000 towards medical expenditures
• Deduction limit of Rs 60,000 with respect to specified decease of serious nature enhanced to Rs 80,000 in case of senior citizen
• Additional deduction of Rs 25,000 allowed for differently abled persons
• Coverage for accidents and death to the poor at just Rs. 12 a year
• The tax incentive limit for investment in pension fund raised by Rs. 50,000 to Rs. 1.5 lakh
• Payments to the beneficiaries including interest payment on deposit in Sukanya Samriddhi scheme to be fully exempt
• Service-tax exempted on Varishtha Bima Yojana
• Additional deduction of Rs 50,000 for contribution to the new pension scheme u/s 80CCD
• A gold monetization scheme to be introduced to replace both the present gold deposit and gold metal loan schemes
• A sovereign gold bond will be launched as an alternative to buying the precious metal
• An Indian gold coin with the Ashoka Chakra to be introduced to cut demand for foreign-minted coins
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