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Union Budget 2014 highlights: Dissected by ELP & Link Legal

The Union Budget 2014 – the new BJP government’s first budget presented by Arun Jaitley yesterday – failed, like its predecessors, in providing a definite path and timeline for the Goods and Service Tax (GST) regime, did nothing to address the problem of retrospective amendments, or to enact the Direct Tax Code, noted Economic Laws Practice (ELP) in its budget update.

Tax rates remained unchanged but new services such as radio taxis and print media ads were brought under the negative list, and others such as educational services and amenities to public authorities were exempted from tax, noted Link Legal in its update. Income tax exemption was also raised from Rs 2 lakh to Rs 2.5 lakh.

The 10 year tax holiday for the power sector was extended by another three years.

The FDI limit in defence has been, expectedly, raised from 26 per cent to 49 per cent with FIPB approval, and same has been done for insurance.

On the budget proposal of setting up of six new benches of the Debt Recovery Tribunal (DRT), ELP commented: “It would be important to understand whether such DRTs alone would be able to address the issue of rising NPAs. It may also be considered necessary to have a considerable review of the DRT processes to allow faster resolution of such issues.”

It was proposed to establish a Rs 10,000 crore fund to attract venture capitalists providing equity, quasi equity, soft loans and other risk capital for start-up companies.

It was announced that a target of 8,500 km of national highways construction would be achieved in the current financial year. Further, it was stated that an investment of Rs 37,880 crore would be made in National Highways Authority of India (NHAI) and State Roads, of which Rs 3,000 Crore would be earmarked for the North East.

While Finance Minister senior advocate Arun Jaitley proposed five new IITs and IIMs each and four new AIIMS, no special budget allocation was made for national law universities or legal education.

Read full commentary by ELP and Link Legal

2014 Union Budget Analysis by ELP

Link Legal Budget Newsflash 2014-15

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