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The Financial Express |
Milind Kothari, Managing Partner |

29 February 2016

Arun Jaitley Union Budget 2016: Finance Minister Arun Jaitley unveiled a budget for the poor on Monday, announcing new rural aid and health programmes in a strategy shift that could boost Bharatiya Janata Party (BJP) in coming state elections. Finance Minister Arun Jaitley on Monday gave relief to small tax payers, nudged the affluent to shell out more while focusing on the rural economy with much higher fiscal outlays. Arun Jaitley also said that people living in rented houses will be eligible for deductions of up to Rs 60,000 now -- up from Rs 24,000. He also said the ceiling of tax rebate for people with income up to Rs 500,000 per annum was being raised to Rs 5,000 from the present Rs 2,000. But for larger tax payers, he said, the income tax surcharge of 12 percent at present was being hiked to 15 percent for incomes exceeding Rs 1 crore per annum. Suitable changes, Jaitley said, will also be made in customs and excise duty rates to push the "Make in India" programme. Here are the top 6 reactions by experts:

Arun Jaitley Union Budget 2016: MACRO - "It is encouraging to see that fiscal discipline has been given priority at today's budget, though we await the fine-print. Budgetary assumptions, especially nominal GDP growth will be key. Implementation of the 7th Pay Commission proposals is also unclear in the speech, so more details are also sought here. Focus on rural/ social sector spending and roads/ highways are along expected lines and positive. But less-than-expected support for banks' recapitalisation has disappointed. Services tax was left unchanged and long-term capital gains tax fears were left misplaced." RADHIKA RAO, ECONOMIST, DBS, SINGAPORE

Arun Jaitley Union Budget 2016: "Really excellent budget. The adherence to fiscal discipline, with emphasis on growth and development, increasing infrastructure spending... are key elements of this year's budget." ASHTOSH RAINA, HEAD-FX, HDFC BANK, MUMBAI

Arun Jaitley Union Budget 2016: BANKS - "The allocation for bank capitalisation of 25,000 crore rupees (250 billion rupees) is only a patch on the 1,80,000 crores that the Economic Survey has identified as the need of this vital sector. The banking sector has a major role to play in spurring private investment which is lacking and without which the all-round economic revival is not a possibility." MILIND KOTHARI, MANAGING PARTNER AND HEAD - DIRECT TAX, BDO INDIA, MUMBAI

Arun Jaitley Union Budget 2016: AGRICULTURE - "These steps will help our millions of farmers recover from the rough patch they have been going through but the government will have to raise its allocation for the crop insurance scheme, as the gap between farmers' cost on farming and their loss, if any, is huge. "Although I welcome higher allocation for irrigation, we need to see its implementation. The government has been raising its irrigation spending every year, but we've failed to bring any extra area under irrigation facility. How does higher allocation help then?" YOGINDER K ALAGH, FARM EXPERT AND FORMER MEMBER PLANNING COMMISSION

The Finance Minister Arun Jaitley proposed to hike rate of Securities Transaction Tax (STT) in case of ‘Options’ to 0.05 per cent from 0.017 per cent earlier.

Arun Jaitley Union Budget 2016: HEALTHCARE - "The comments on (health) insurance are quite welcome. While the spending on healthcare has gone up, we'll have to wait and see how many of the initiatives announced actually see the light of the day ... that's a question mark right now." VRINDA MATHUR, PARTNER, GRANT THORNTON INDIA LLP, NOIDA