Railway Budget - II

Budget Estimates for 2015-16

Targeted operating ratio for 2015-16 at 88.5% against 91.8%in 2014-15: best in the last 9 years.

NOTE : 91.8% operating ratio signifies that IR spends Rs. 91.8 to earn Rs. 100.

S. No.	Head	Estimates (Rs. In crores)	growth (in %)
1	Passenger Earnings	50,175	16.7
2	Goods Earnings	1,21,423	incremental traffic of 85 million tonnes
3	other coaching	4,612
4	sundries	7,318
5	Gross Traffic Receipts	1,83,578	15.3
6	Appropriation to pension fund	35,260
7	Appropriation to Depreciation Reserve Fund	8,100
8	Appropriation to capital fund	7,616

 

Plan outlay

The fund under plan outlay is used for asset creation, mostly allocating large amounts towards Doubling, Traffic Facilities, Electrification and Passenger Amenities.

1)      Gross Budgetary Support (GBS) of Rs 40,000 crore. GBS is loan provided by central government to Railways on very less interest but Railways has to pay dividend (interest) for perpetuity.

2)      Rs 1,645.60 crore has also been provided as Railway’s share of diesel cess from the Central Road Fund.

3)      Market borrowing under EBR (Extra Budgetary Resource) projected at Rs 17,655 crore, an increase of about 46.5%.

4)      Rs 17,793 crore from Internal Resources.

5)      Rs. 5781 crore from PPP.

6)      Plan Outlay is Rs 1,00,011 crore, an increase of 52%.

Railway Budget - I

Five Year Action Plan (2015-19) to transform the Railways

Railway budget, part of trilogy of documents viz. the White Paper, Budget 2015-16 & a Vision-2030 document, has set four goals for Indian Railways to transform over next five years.

1)      To deliver a sustained and measurable improvement in customer experience.

2)      To make Rail a safer means of travel.

3)      To expand Indian Railways capacity substantially and modernise infrastructure :

                                 i.            increase daily passenger carrying capacity from 21million to 30 million

                               ii.            increase track length by 20% from 1,14,000 km to 1,38,000 km

                             iii.            grow annual freight carrying capacity from 1 billion to 1.5 billion tonnes

4)      To make Railways  financially self-sustainable. Generate large surpluses from operations.

Execution strategy to have five drivers:

1)    Adopting a medium-term perspective : investment of Rs. 8.5 lakh crore in next five years

2)   Building Partnerships: partnering with key stakeholders : States, PSU’s, partner with multilateral and bi-lateral organizations & other governments to gain access to long term financing.

3)   Leveraging additional resources : IR envisages investment of Rs. 8.5 lakh crore in next five years to be mobilized from multiple sources to cater to funding i.e Multilateral development banks, pension funds.

4)   Revamping management practices, systems, processes, and re-tooling of human resources :

Ø  Targeted operating ratio for 2015-16 at 88.5% against 91.8%in 2014-15: best in the last 9 years.

Ø   IR to speed up decision making, tighten accountability, improve management information systems: training and development of human resource.

5)   To set standards for Governance and Transparency

Eleven major thrust areas of Action Plan:

1)      Cleanliness : Swachh Rail Swachh Bharat and  new department for cleanliness

2)      Bed linen : NIFT to design; online booking of disposable bed rolls

3)      Help-line : 24X7 helpline number 138;toll-free number 182 for security related complaints

4)      Ticketing

5)      Catering

6)      Leveraging technology: Hand-held terminals to Travelling Ticket Examiners (TTEs) and SMS alerts

7)      Surveillance

8)      Entertainment

9)      Station facilities : Wi-Fi, online booking of wheel chairs

10)  Train capacity : capacity in identified trains be augmented to run with 26 coaches; more General class coaches be added in identified trains

11)  Comfortable travel

Ease of doing business – Minimum Government Maximum Governance

The following are the measures announced by government in the budget to achieve the goal of "ease of doing business - minimum government, maximum governance" :-

1)      Simplification of tax procedures.

2)      Monetary limit for a case to be heard by a single member bench of ITAT increase from INR 5 lakh to INR 15 lakh.

3)      Penalty provision in indirect taxes are being rationalised to encourage compliance and
early dispute resolution.

4)      Central excise/Service tax assesses to be allowed to use digitally signed invoices and
maintain record electronically.

5)      Wealth-tax replaced with additional surcharge of 2 per cent on super rich with a taxable
income of over INR 1 crore annually.

6)      Domestic transfer pricing threshold limit increased from INR 5 crore to INR 20 crore.

7)      MAT (Minimum Alternate Tax) rationalised for FIIs and members of an AOP (Association of Persons).

8)      Tax Administration Reform Commission (TARC) recommendations to be appropriately
implemented during the course of the year.

9)      Education cess and the Secondary and Higher education cess to be subsumed in Central
Excise Duty.

10)  Time limit for taking CENVAT credit on inputs and input services increased from 6
months to 1 year.

11)  Service-tax plus education cesses increased from 12.36% to 14% to facilitate transition
to GST.

12)  Seized cash can be adjusted towards assessees tax liability.

Black Money

In the budget 2015-16, there is a provision of a Bill for a comprehensive new law to deal with black money parked abroad. The said bill may be introduced in current session of the Parliament.

Key features of new law on black money

1)      Evasion of tax in relation to foreign assets to have a punishment of -

                                i.            rigorous imprisonment upto 10 years

                              ii.            non-compoundable

                            iii.            penalty rate of 300%

                             iv.            the offender will not be permitted to approach the Settlement Commission.

2)      Non-filing of return/filing of return with inadequate disclosures to have a punishment of rigorous imprisonment upto 7 years.

3)      Undisclosed income from any foreign assets to be taxable at the maximum marginal rate.

4)      Mandatory filing of return in respect of foreign asset

5)      Entities, banks, financial institutions including individuals all liable for prosecution and penalty.

6)      Concealment of income/evasion of income in relation to a foreign asset to be made a predicate offence under PML Act, 2002.

NOTE : Under the PML Act, 2002, the Scheduled Offence is called Predicate Offence and the occurrence of the same is a pre requisite for initiating investigation into the offence of money laundering.

7)      PML Act, 2002 and FEMA to be amended to enable administration of new Act on black money.

Apart from the new law, the following measures are being taken by the government to curb black money :

1)    Benami Transactions (Prohibition) Bill to curb domestic black money to be introduced in the current session of Parliament.

2)    Acceptance or re-payment of an advance of ` 20,000 or more in cash for purchase of
immovable property to be prohibited.

3)    PAN being made mandatory for any purchase or sale exceeding Rupees 1 lakh

4)    Third party reporting entities would be required to furnish information about foreign
currency sales and cross border transactions.

5)    Provision to tackle splitting of reportable transactions.

6)    Leverage of technology by CBDT and CBEC to access information from either’s data
bases.

Budget 2015

Budget 2015-16 : STEAM (Science, Technology, Engineering/Education, Agriculture

                           and Medicine)

1)      The budget announced recently by the government has only let the cloud of gloom covering STEAM (Science, Technology, Engineering/ Education, Agriculture and Medicine)  thicken.

2)      The government has increased the S&T budget by 4-7 per cent, one that hardly meets the inflation rate.

3)      The budgetary increase was based on what STEAM ministries spent last year up to December 2014 and not what they would have up to March 31, 2015.

4)      Science & Technology :

                                i.            The budget provides well for mission type programmes planned by the Space and the Atomic Energy groups.

                              ii.            But the budgets of the Departments of Science & Technology, Science and Engineering Research Board, Department of Biotechnology, Earth Sciences and the Council of Scientific and Industrial Research the increase of 7 per cent hardly meets the inflation rate.

5)      Education :

                                i.            The HRD ministry (MHRD) faces a 17 per cent cut.

                              ii.            Money for school education has been cut from Rs 55,155 crores to Rs 42,210, a drop of Rs 13,000 crores.

                            iii.            In higher education, the money allotted is already down by Rs 3900 crores, and much of the MHRD budget will go to the newly born dozens of ‘central universities’, IITs and IIMs.

6)      Agriculture :

                                i.            Agriculture loses its budget by Rs 2,800 crores, from Rs 19,852 crores last year to 17,004 this year.

                              ii.            Its research arm, the Indian Council of Agricultural Research (ICAR) loses 25 crores this year.

7)      Medicine :

                                i.            The Health Ministry’s budget has been cut by 20 per cent.

                              ii.            The money for the HIV programme has been cut by 30 per cent.

                            iii.            The child health programme (India has the maximum malnourished children and nursing mothers) has also been downsized.

                             iv.            The research arm of the health ministry, Indian Council of Medical Research (ICMR), sees its outlay poorer this year.

http://www.thehindu.com/sci-tech/science/recent-budget-has-not-lifted-the-veil-of-gloom-over-steam/article6982879.ece

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