Budget 2014 : Kisan Vikas Patra (KVP) Re-Introduced

Finance Minister Arun Jaitley on Thursday announced in the Union Budget 2014-15 that his government will reintroduce the highly-popular Kisan Vikas Patra (KVP). "I plan to reintroduce the instrument to encourage people who may have banked and unbanked savings to invest in it," the finance minister said in his budget speech.

KVPs had been available in denominations ranging from Rs 100 to Rs 50,000 at post offices using cash and used to double investment in eight years and seven months. There was no upper limit on investment and KVPs were criticised by several government committees, notably a panel headed by Reserve Bank of India deputy governor Shyamala Gopinath, which recommended its closure.

The aim is to, Jaitley told Parliament, encourage people who may have banked and unbanked savings to invest in this instrument.The FM said that KVP was a very popular instrument among small savers and is being re-introduced to promote saving.

The annual ceiling of PPF (Public Provident Fund) raised to Rs 1.5 

To further increase the household savings for the common man, the Budget 2014 also hiked the PPF (Public Provident Fund) to 1.5 lakh. PPF is considered as one of the most popular and fruitful tax-saving schemes for the common man.

Highlights of Union Budget 2014

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Direct Taxes

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1. Personal income tax exemption limit raised from Rs. 2,00,000 to Rs 2,50,000.

2. Raised tax exemption for senior citizens from Rs 2.5 lakh to 3 lakh for senior citizens

3. Tax relief on interest of home loan for self-occupied houses raised to Rs 2 lakh.

4. Exemption Limit under section 80C has been enhanced to Rs. 1,50,000 from existing Rs. 1,00,000 limit.

5. Public Provident Fund (PPF) limit enhanced to Rs. 1,50,000 from existing Rs. 1,00,000, this is covered under section 80C exemption only.

6. In case of mutual funds, the capital funds held for more than a year will be taxed at 10 per cent.

7. Education cess will continue at 3%.

Indirect Taxes

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8. Excise duty on cigarettes hiked from 11 to 72%.

9. Levy an additional excise duty on aerated waters.

10. Excise duty reduction on specified food processing industries

11. CRT TVs exempted from customs duty to help poor.

12. Color pictures tubes exempt from custom duty.

13. Additional duty on imported computer components.

14. Propose to increase export duty on bauxite to conserve natural resources.

15. To encourage exports 3 forms of semi-precious stones are exempted from custom duty.

16. A concessional basic custom duty of 5% on machinery for setting up compressed bio-gas plants.

17. A concessional duty of 5 per cent will be given to setup solar energy production plant.

18. Basic custom duty reduced on LCD TV’s below 19-inches.

Other Key Highlights

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19. Budget proposes to set up agri-infrastructure fund at a cost of Rs 100 crore; two more agri-research institutes in Jharkhand and Assam.

20. Indian Depository Receipts (IDR) to be replaced with more liberal Bhartiya Depository Receipts (BDR).

21. Convergence of New Indian Accounting Standards (IAS) by F.Y. 2014-15 voluntarily and by F.Y. 2015-16 mandatorily.

22. Foreign Direct Investments in Defense enhanced to 49% (With Indian Management and Control) from existing 26%

23. Under Employee pension scheme (EPS) minimum Pension limit enhanced to Rs. 15000 from existing Rs. 6500 with minimum monthly contribution of Rs. 1000 per month.

24. Metro rail services to be launched in Lucknow and Ahmedabad; Rs 100 crore set aside for it.

25. Andaman and Nicobar islands are a crucial part of our country. To tide over communication related problems, will allocate Rs 150 crore.

26. Northeast to see development of its rail system. Will expedite rail connectivity in the region and allocate an additional sum of Rs 1000 crore over and above the interim budget.

27. Rs 500 crore for displaced Kashmiri migrants and their rehabilitation.

28. To promote leadership skills, a young leadership programme will be proposed and allocated Rs 100 crore.

29. Setting aside Rs 100 crore for training of women in Asian and Commonwealth games.

30. A sports university to be proposed in Manipal.

31. Propose to provide Rs 200 crore to upgrade indoor and outdoor stadium to international levels in Kashmir valley.

32. National sports academies for major sports.

33. Each state where there is no AIIMS will be added in the coming years.

34. Rs 2037 crore for new scheme to rejuvenate Ganga.

35. NRI fund for Ganga will be setup too.

36. Our riverfronts and ghats are not only rich historical places but sacred too. Proposed to set aside Rs 100 crore for this.

37. Budget proposes National Housing Banking programme; sets aside Rs 8,000 crore.

38. Safe drinking water in 20,000 habitations in villages facing problem of impure drinking water.

39. Effort to link rivers can give rich dividends to the country.

40. Need to develop world class convention facilities with the private sector.

41. Archaeological sites preservation requires immediate attention so allocated Rs 100 crore for this.

42. Committee will be set up to examine how unused money in postal schemes can be utilized [India Post team to note]

43. Crisis Management Centres for women to be set up at all government hospitals in NCR region

44. In order to strengthen border infra, Rs 2,250 crore has been set up. Rs 990 crores for socio-economic development of villages along the border.

45. Propose to allocate Rs 2, 29,000 crore to the Defense sector.

46. Modernization of armed forces is required. Capital out will be increased to Rs 5000 crore over and above the interim budget.

47. Government approves minimum monthly pension of Rs 1,000 per month under EPS-95 scheme run by EPFO.

48. Strengthening the regulatory framework of commodity markets.

49. Allow international settlement of Indian debt securities. Introduce a liberal Bharat Depository receipt.

50. Advise financial sector regulators to eliminate unnecessary restrictions.

51. Also essential to have a modern monetary policy to meet challenges of complex economy.

52. Deen Dayal Upadhaya Gram Jyoti Yojana to be launched to augment power supply in rural areas.

53. Rs 200 crore set aside for the Sardar Patel statue project in Gujarat.

54. Presently, 15000 km of gas pipelines in the country. An additional 15000 km are required, to develop this under appropriate PPP model, long term aim will be to reduce dependence on any one energy source.

55. Government intention to accelerate production of coal, methane.

56. Rs 200 crore for 6 textile clusters in Rae Bareli, Lucknow, Surat, Bhagalpur.

57. Expressways parallels to industrial corridors.

58. Government proposes to set up 100 smart cities. Government to provide Rs 7,060 crore for development of such cities.

59. Public sector banks need Rs 2.40 lakh crore equity to conform with Basel-III norms by 2018

60. Comprehensive policy to announce Indian ship-building industry.

61. Pashmina production unit in Jammu & Kashmir and allocated Rs 50 crore for this.

62. Definition of MSME will be revised to provide higher capital saving.

63. Bankruptcy framework for MSME’s for an easy exit.

64. SME’s account for a large proportion of economic output. Majority are run by SC/ST/OBC’s.

65. The performance of apprenticeship training is unsatisfactory, has to be suitably amended to be responsive to the industry standards.

66. Economic growth export promotion and employment generation is needed.

67. Exports cannot be exponentially increased unless states play an important role in promoting it.

68. Manufacturing units will be allowed to sell their products through retail and e-commerce.

69. Budget proposes 49 per cent FDI in insurance through FIPB route.

70. Our Banking system needs to be further strengthened. Need to infuse Rs 2.40 lakh crore in our banks.

71. Bank capital to be raised through retail sale of shares; Government to continue to hold majority in PSU banks.

72. AIIMS-like institutions in Bengal, Purvanchal and Jharkhand.

73. Rs 400 crore allocated for low-cost housing project.

74. Farmers will get 5% rebate on timely repayment on loans.

75. Rs 100 crore for ‘start up’ programme for youth.

76. Rs 500 crore allocation for price stabilization.

77. Rs 100 crore for the modernization of madrasas.

78. All future indirect transfers under the retro tax regime will be scrutinized by a high level committee of CBDT before action is taken.

79. Government to set up a high-level Committee to interact with industry to bring about changes in tax laws if required.

80. Transfer pricing regulations for residents and non-residents being done.

81. Currency notes to have Braille to help the visually impaired.

82. Rs 7,060 crore for new smart cities. 

83. Propose Beti Bachao Beti Padao Yojana which will help in generating awareness and improve efficiencies of delivery of services to women.

84. New urea policy will be formulated.

85. Government medical colleges approved, 12 more medical colleges proposed.

86. Strive to provide toilets in girl schools. Rs 4,966 crores from Rashtriya Madhyamik Shiksha Abhiyan for this.

87. MNREGA. To focus on productive, asset creating works.

88. 150 crore by home ministry to increase safety of women in larger cities.

89. Plan to achieve total sanitation by year 2019.

90. A national multi-skill programme called ‘Skill India’ will provide skill sets to the youth for employability and entrepreneurial skills.

91. We wish to achieve 7 to 8 per cent growth in next 3-4 years

92. Fiscal deficit target at 3%.

New legislation will be introduced soon to implement GST.