NEW DELHI Prime Minister Narendra Modi's new government on Thursday unveiled a first budget of structural reforms that seek to revive growth, while spurning the temptation to resort to higher borrowing.
Here are the highlights of the budget presented by Finance Minister Arun Jaitley.
* Accepts fiscal deficit target of 4.1 percent of GDP for 2014/15
* Fiscal deficit seen at 3.6 percent of GDP in 2015/16
* Finance Minister says: "We cannot spend beyond our means"
* Tax-to-GDP ratio must be raised
* Aims for sustained growth of 7-8 percent in the next 3-4 years
* Finance minister says he is bound to usher in policies for higher growth, lower inflation
* Jaitley vows to maintain a stable tax environment but stops short of scrapping rules on retrospective tax
* All pending cases of retrospective tax for indirect transfers to be examined by committee before action is taken
* Government will not ordinarily bring any change retrospectively that creates a new liability, Jaitley says
* Aims to approve goods and services tax by end of this year
* Extends 5 percent withholding tax on corporate bonds until June 30 2017
* To provide necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts
* Extends 10-year tax holiday for power generation companies
REVENUES and EXPENDITURE
* Estimates that total expenditure will be 17.95 trillion rupees in 2014/15
* Revenue deficit seen at 2.9 percent of GDP in 2014/15
* Capital receipts seen at 739.5 billion rupees in 2014/15
* Retains tax collection targets and makes no major changes to direct tax rates
* Allocates 2.29 trillion rupees for defence spending in 2014/15; capital outlay raised by 50 billion rupees over interim budget
* Earmarks 70.6 billion rupees to create 100 "smart cities"
* Proposes 50 billion rupees for warehousing capacity; 100 billion rupees of private capital for start-up companies; and 378 billion rupees of investment in national and state highways
* 40 billion rupees for affordable housing proposed through national housing bank; 80 billion rupees proposed for rural housing scheme
FOREIGN DIRECT INVESTMENT
* Raises limit on foreign direct investment in defence sector from 26 percent to 49 percent
* Raises FDI limit in insurance sector from 26 percent to 49 percent
* Plans to make food and petroleum subsidies more targeted
* Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become more focused on asset creation
* Will focus on acheiving 4 percent growth per year in agriculture
* Sets farm credit target at 8 trillion rupees for 2014/15
* Proposes a long-term rural credit fund with an initial corpus of 50 billion rupees
FINANCE MINISTER COMMENTS
* "The fiscal deficit target of 4.1 percent put out by my predecessor is indeed daunting. But I have decided to accept the target."
* "The task before me is challenging because we need to revive growth in manufacturing and infrastructure. We need to introduce fiscal prudence and cannot spend beyond our means. For this, the tax-GDP ratio must be improved."
* "A high-level committee will scrutinize retrospective tax cases. We are committed to providing a stable tax regime."
* "We have no option but to take some bold steps to spurt economy; these are only the first steps and are directional."
* "[India's farming sector] has risen to the challenge of making India largely self sufficient in providing food for growing population" but there is "an urgent need to set up investment, both public and private"
(Compiled by Tommy Wilkes & Shyamantha Asokan)