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Budget 2016-17: No change in I-T slabs

Union Finance Minister Arun Jaitley unveiled a budget for the poor on Monday, announcing new rural aid and health programmes in a strategy that could improve BJP's winning chances in coming state elections.

The total expenditure in the budget for 2016-17 has been projected at Rs 19.78 lakh crore, consisting of Rs 5.50 lakh crore under Plan and Rs 14.28 lakh crore under Non-Plan.

Major focus on agriculture and farmers' welfare, a new health protection scheme, increased outlay for infrastructure, massive mission to provide LPG connection to poor households, Rs 2.87 lakh crore grant in aid to municipalities and gram panchayats, setting up of 1500 multi skill training institutes and incentives for jobs creation are major highlights of the budget.

Jaitley announced a sum of Rs 2.87 lakh crore which will be given as grant to gram panchayats and municipalities. It will translate to an average assistance of over Rs 80 lakh per gram panchayat and over Rs 21 crore per urban local body.

The finance minister emphasized that the government is firm on its course towards fiscal consolidation without compromising on its development agenda. He said 3.5 percent fiscal deficit is targeted for FY 2016- 17.

The financial years 2015-16 and 2016-17 will be challenging for government expenditure. The next financial year will cast an additional burden on account of the implementation of Defence OROP and recommendations of the 7th Central Pay Commission.

The government will undertake 3 major programs to assist the weaker sections. While it has launched Pradhan Mantri Fasal Bima Yojana, this budget has proposed a health insurance scheme aimed at protecting one-third of India's population against hospitalization expenditure and an initiative to ensure that the BPL families are provided with a cooking gas connection, supported by a government subsidy, Jaitley said.

Jaitley said allocation under Sarva Shiksha Abhiyan will be increased and a Higher Education Financing Agency (HEFA) will be set up with initial capital base of Rs 1,000 crore.

The finance minister has allocated Rs 55,000 crore for highways and roads which will be further increased by additional Rs 15,000 crore to be raised by NHAI through bonds. The total investment in the road sector including PMGSY allocation would be 97,000 crore during 2016-17.

He further added that together with capital expenditure of the railways, the total outlay on railways and roads will be Rs 2,18,000 crore. The government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment.

Jaitley said that the government is preparing a comprehensive plan, spanning next 15-20 years to increase the investment in nuclear power generation. The govt. will allow mobilization of additional finances to the extent of Rs 31,300 crore by IREDA, NHAI, PFC, REC, NABARD and Inland Water Authority through raising of Bonds.

While making no change in personal income tax slabs in the Union Budget, Jaitley announced deduction for additional interests of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17 for first time home buyers, where house costs does not exceed Rs 50 lakh.

The tax exemption for house rent allowance will be raised to Rs 60,000 from the current Rs 24,000-level. The move is likely to bring in relief to the common man, Jaitley said.