Krishi Kalyan Cess introduced to fund agriculture initiatives, affecting taxable services and compliance for service providers.
A Krishi Kalyan Cess will be levied on taxable services with proceeds exclusively for agriculture and farmer welfare effective 1 June 2016; new withholding rules will capture payments to non-resident suppliers of online advertising lacking a permanent establishment, and tax collection at source will apply to certain high-value cash and luxury vehicle purchases. Dividend recipient taxation, surcharge and securities transaction tax on options were adjusted, excise rates on tobacco increased, tiered infrastructure cess on motor vehicles introduced, the clean energy cess renamed and increased, and assignment of radio-frequency spectrum declared a service taxable under the Finance Act.

Plan expenditure increase prioritizes allocations to agriculture, irrigation, social sector, welfare groups and infrastructure.
Plan expenditure in the Union General Budget for 2016-17 is projected to increase over the current year's budget estimate, with Plan allocations directed to agriculture, irrigation, health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities and infrastructure, reflecting a targeted fiscal emphasis within the overall budget framework.

Tax simplification: Budget proposes abolition of minor cesses and easing TDS and customs compliance measures.
Budget proposals simplify taxation by abolishing low yield cesses to reduce cascading and collection costs; rationalizing TDS to improve small taxpayers' cash flow and to avoid higher withholding on non residents without PAN when alternative documents are furnished; extending revision of return to central excise assesses; permitting additional methods for reversal of input tax credits for banks, financial institutions and NBFCs; and amending customs law to allow deferred duty payment for compliant traders while implementing a Customs Single Window and narrowing baggage declaration obligations.

Interstate cultural exchange programme to create structured state and district partnerships for language, culture, travel and trade.
The statement announces the Ek Bharat Shreshtha Bharat programme as a centrally promoted annual initiative to establish structured linkages between States and Districts through bilateral and multilateral exchanges in language, trade, culture, travel and tourism to strengthen mutual understanding, social integration and promote travel and trade connections.

Agriculture and farmers' welfare prioritised with expanded irrigation, insurance and credit measures to double farmer incomes.
The Budget emphasises fiscal consolidation while reallocating resources to a nine pillar transformative agenda prioritising Agriculture and Farmers' Welfare, Rural Sector, Social Sector including Healthcare, Infrastructure and Financial Sector Reforms. Key operative measures include mission mode irrigation expansion supported by a Long Term Irrigation Fund, enlarged agricultural credit targets with interest subvention, rollout of Pradhan Mantri Fasal Bima Yojana, a health protection scheme for vulnerable families, subsidised LPG connections for poor households, increased rural grants and infrastructure allocations, banking recapitalisation and statutory reforms including backing for the AADHAR platform and a Code for resolution of financial firms.

Code on Resolution of Financial Firms to establish a statutory resolution framework alongside insolvency law, strengthening bank recovery measures.
A statutory Code on Resolution of Financial Firms will be enacted to create a comprehensive resolution framework alongside the insolvency law. Complementary measures include statutory provision for a Monetary Policy framework and Monetary Policy Committee, establishment of a Financial Data Management Centre, development of new commodity derivative products, amendment of the SARFAESI Act to strengthen Asset Reconstruction Companies, strengthening computerized Debt Recovery Tribunals, and recapitalisation and consolidation measures for Public Sector Banks.

Price stabilisation fund to support market interventions and enable buffer procurement of pulses under MSP and market price.
Provision of a dedicated Price Stabilisation Fund with a specified corpus enables targeted market interventions and institutionalises active price monitoring. The policy provides for creation of a buffer stock of pulses through procurement at the Minimum Support Price and at prevailing market prices using the Fund to support price stabilisation measures.

Doubling farmers' income through irrigation, soil health, and unified agricultural market reforms to improve farmer access and returns.
The Budget advances a package to raise agricultural incomes by expanding irrigation through Pradhan Mantri Sinchai Yojana, fast tracking AIBP projects and constituting a Long Term Irrigation Fund in NABARD; scaling soil health diagnostics and farm water measures funded through MGNREGA; and improving market access via a Unified Agricultural Marketing E Platform, decentralized procurement, and online procurement by the Food Corporation of India.

Tax reforms introduce reduced corporate rate for new manufacturers and expanded presumptive limits, altering capital gains and deduction rules.
Budget 2016 announces large sectoral allocations for roads, rural development, agriculture and infrastructure financing, administrative reforms for start ups and appellate capacity, and detailed tax measures including a 25% corporate rate for new manufacturers, increased presumptive taxation limits, limits on accelerated depreciation, long term capital gains treatment for unlisted securities, housing related deductions and modified penalty, TDS/TCS and dispute resolution provisions.

Corporate tax incentives expand benefits for new manufacturers and commit to implementing GAAR from next fiscal year onwards.
Budget 2016 provides housing incentives for first time buyers and urban affordable housing projects (subject to MAT), corporate tax incentives for new manufacturing and smaller enterprises, extension of a presumptive tax scheme to higher earning professionals, limits on accelerated depreciation, and a commitment to implement GAAR. It sets fiscal targets within a medium term consolidation framework and advances financial sector reforms including bank recapitalisation, amendments to the RBI Act for a statutory monetary policy framework, a Financial Data Management Centre, and measures to deepen corporate bond markets.

Companies Act amendment to streamline company registration, enabling one-day incorporation and improving start-up procedures.
A Bill to amend the Companies Act 2013 is proposed to remove procedural difficulties, improve the enabling environment for start-ups, and expedite company formation, including an objective of completing company registration in one day and broader regulatory simplification to reduce administrative burdens.

Tax relief for small taxpayers expanded with higher rent deduction, broader presumptive taxation and startup incentives.
The budget increases tax-relief measures and thresholds: higher rebate and a substantially raised rent deduction limit, expanded presumptive taxation for businesses and professionals, time-bound full-profit deductions for qualifying start-ups, and preferential patent income taxation. It provides tax-free partial withdrawal of pension corpus at retirement and caps employer contribution benefits. Affordable housing receives targeted tax incentives including full profit deduction for specified projects, additional interest deduction for first-time buyers, and service tax exemptions. Administrative reforms include a New Dispute Resolution Scheme with concessional settlements and immunity provisions, strengthened penalty rules, tribunal limit adjustments, abolition of low-revenue cesses, and expanded e-Assessment and other technology-led compliance initiatives.

Affordable housing incentives expand tax deductions and service tax exemptions to boost small-unit residential construction.
The Budget offers a 100% profit deduction for undertakings carrying out qualifying affordable housing projects subject to completion and approval conditions, while applying Minimum Alternate Tax. It exempts SPV distributions to qualifying REITs/INVITs from Dividend Distribution Tax, grants an additional interest deduction to first-time home buyers under specified loan and value limits, and provides service tax exemption for affordable housing construction under government schemes; it also extends excise exemption for site-use concrete mix to Ready Mix Concrete.

Fiscal deficit target seen achievable as revenue gains and spending restraint support fiscal consolidation despite growth headwinds.
The fiscal deficit target for 2015-16 appears achievable due to stronger revenue-particularly buoyant indirect taxes and excise measures-higher capital plan expenditure, lower subsidies led by a fall in petroleum subsidy, and increased untied transfers to states, while risks from slower nominal growth and added expenditure pressures require improved tax compliance, subsidy targeting, and quality-focused expenditure management to sustain fiscal consolidation.

Subsidy distribution distortions lead to fiscal leakage; reform recommended to improve targeting and fiscal efficiency.
Economic Survey 2015-16 finds substantial public transfers flowing disproportionately to better-off households through a narrow set of instruments (gold, LPG, kerosene, electricity, railway fares, aviation turbine fuel and small savings schemes), notes measurement underestimation that increases the apparent leakage when including public provident and similar schemes, and recommends targeted interventions to rectify anomalies to improve fiscal efficiency, welfare targeting and the credibility of market-oriented reforms.

Services sector dominance: FDI and export growth drive policy focus on IT BPM, tourism, ports and digital trade.
The Survey identifies the services sector as the dominant driver of economic growth, net foreign exchange earnings and FDI attraction, emphasising strong recent growth in services output, rising services exports and increased FDI inflows. It highlights policy measures to promote exports and start ups and outlines sectoral priorities-tourism, maritime and ports, IT BPM and e commerce, R&D and consultancy, real estate and internal trade, media and postal services-where liberalisation, targeted programmes and infrastructure investment are the principal mechanisms to sustain services led growth.

Current account deficit remains low, supporting external stability despite export slowdown and falling imports this year.
Trade improved in April-January 2015-16 as exports fell by 17.6% to 217.7 billion US dollars and imports fell by 15.5% to 324.5 billion US dollars, reducing the trade deficit to 106.8 billion US dollars from 119.6 billion. Continued low global commodity prices support lower trade and current account deficits. The Current Account Deficit is projected in the low range of one to one and a half percent of GDP. Foreign exchange reserves rose to 351.5 billion US dollars, boosting import coverage and reflecting comfortable external debt metrics.

Progressive tariff reform: simplify electricity pricing to protect poorer consumers while enabling market integration and industry competitiveness.
The Survey identifies electricity pricing and market integration as central reforms: current complex end use tariffs, below cost average tariffs in some cases, and high industrial rates distort price signals and hinder open access. Cross subsidy surcharges and non price measures balance DISCOM equity and access but impede a nationwide market. There is scope for progressive tariff design to lower charges for poorer households while raising revenue from wealthier ones, and for simplifying tariffs. State regulators and governments must implement these reforms with central facilitation to achieve market integration, reduce industry burdens, and support renewable expansion.

Barriers to exit undermine economic efficiency and require legal, institutional and transparency reforms to expedite restructuring.
Barriers to exit generate fiscal, economic and political costs by sustaining inefficient, low productivity firms; vested interests, weak or inflexible institutions, and enduring ideology impede removal of entitlements and effective enforcement. Recommended responses include promoting competition via private entry, legal and procedural reforms to expedite exit, strengthening institutions with flexibility, leveraging technology to reduce discretion, increasing transparency on scheme costs and benefits, and presenting exit as an opportunity for renewal.

Ease of Doing Business reforms drive increased industrial growth and FDI inflows, supporting infrastructure transformation and jobs.
The document outlines a coordinated policy package-regulatory simplification, investment liberalisation, and targeted programmes-to improve the business environment, attract increased foreign direct investment, and catalyse manufacturing led industrial growth. It details sectoral interventions in power, coal, petroleum, renewables, roads, telecommunications and urban infrastructure, and complementary measures for MSMEs, start ups and skills to address supply side constraints and enable infrastructure transformation for sustained economic expansion.