Zeenews Bureau
New Delhi, July 07: Presenting his first full Budget after 25 years, Finance Minister Pranab Mukherjee on Monday raised the tax exemption limit for senior citizen from Rs 2.25 lakh to Rs 2.4 lakh for women from Rs 1.8 lakh to Rs 1.9 lakh while for all other from Rs 1.5 lakh to Rs 1.6 lakh.
The Finance Minister partially met the demand for of the salaried classed by abolishing Fringe Benefit tax, while leaving the corporate tax unchanged. The minister promised to simplify tax and duty structure with a new direct tax code in the next 45 days.
Keeping to the theme of ‘inclusive growth’, he hiked spending in key UPA programs like NREGS and Bharat Nirman. For the NREGS the hike was as much as Rs 39,100 cr for 09-10, an increase of 144%. Bharat Nirman allocation went up by 45%.
Mukherjee also promised loans for the agriculture sector upto 3 lakh at 7% per and set an ambitious target of reducing poverty level by half by 2014, and halving female illiteracy in 3 years.
The one worry area for the govt is the ballooning of the fiscal deficit from 2.7% to a whopping 6.2%, which may further increase to 6.8% in FY10. Mukherjee promised to return to fiscal discipline, but in the medium term there seems no alternative to a rise in the deficit hole.
 Taxes
New direct tax code in the next 45 days
Surcharge of 10% on personal income tax removed
Tax benefit under Section 80dd for medical insurance increased from Rs 75,000 to Rs 100,000
Indirect Taxes changes to yield RS 2000 cr in 2009/10
Commodity Transaction Tax scrapped
No change in Corporate taxes
Increase exemption on personal income tax by Rs 15,000 to Rs 2,40,000 for senior citizens
Increase exemption on personal income tax by Rs 10,000 to Rs 1,90,000 for women
Increase in exemption on personal income tax by Rs 10,000 to Rs 1,60,000 for all others
Proposal to phase out surcharge on Direct Taxes
To remove Fringe Benefit Tax
States agree on basic structure of Goods and Services Tax
To raise Minimum Alternate Tax(MAT) TO 15 % of book profit
MAT hiked from 10% to 15%
Carry Forward Tax credit on MAT to 10 year
To exempt Pension trust from Securities Transaction Tax
To create Alternate Tax disputes resolution mechanism for foreign companies
Software Technology Parks of India (STPI) tax holiday extended by a year
GST to be a dual regime with Central and state terms
State Finance Ministers agreed on GST basic structure
GST to be implemented from April 01, 2010
No Securities Transaction Tax (STT) on sale/purchase of shares by NPT
Share of merchandise trade doubled to more than 38.9% in FY09
Tax rates can be lower if tax base is higher
Investment linked tax holiday for cold storages
Proposes new investment linked tax sops
Cos to pay minimum alternative tax of 15% to book profit vs 10%
 Financial reforms
To work on Saral 2 form to make income tax procedure simple
Tax reform system to be completed in 4 years
Balanced approach to financial de-regulation in justified
Finance commission recommendation on Fiscal likely by Oct
Tax holiday for block under NELP with retrospective effect
Maintains customs, excise, service tax structure
Market borrow calendar undergo revision
FY10 oil bonds seen Rs 103.06 bn
Duty cuts
5% custom duty on set top boxes
To extend customs exemptions to some more EoUs
Cut customs duty on LCD panel to 5% vs 10%
To reintroduce CVD exemption to some EoUs
Rough corals exempted from customs duty
Customs duty on windmill inputs cut to 5% vs 7.55
Custom duty on life saving drugs cut to 5% from 10%
Custom duty on gold bars up at Rs 200/10 gms
Customs duty form permanent magnets down to 5% from 7.5 %
8% excise duty on manmade fibre
Excise on pure cotton textiles restored to 4%
Customs duty on silver hiked to Rs 1000/kg
Hike on customs duty on silver excludes jewellery
Wool waste, cotton waste, custom duty down to 10% vs 15%
4% excise on paper, paperwood articles retained at 4%
Blended petrol to be exempt from excise duty
To scrap excise on petrol, diesel blended with biodiesel
4 % excise to stay on items of mass consumption
Custom duty on biofuel diesel cut to 2.5% from 7.5%
Biodiesel exempt from excise duty FY10
Construction sector gets some excise sops
Restores exemption on pre fabricated concrete slabs
Petrol trucks excise duty cut to 8% vs 20%
Branded jewellery fully exempt from excise duty
Over 2000cc vehicle engine surcharged flat at Rs 15000
Exporters exempt from paying service tax to transporters
Service tax levy on goods transported via rail, waterway
Good transport exporters services exempted from service tax
Lawyers to pay sevice tax
Service tax extended to legal consultancies not individuals
Direct tax proposals are revenue neutral
Specific duty of Rs 14.50 per litre on branded petrol
Govt imposes Rs 4.75 per litre specific duty on branded diesel
Ups excise duty on polyster chips to 8% vs 4%
Cuts excise duty on petrol run trucks chassis to 8%
Imposed 7.5% customs duty on concrete batching units
Aims, Fundamentals review
Fiscal deficit up from 2.7% to 6.8% of GDP
Total fiscal stimulus in 2008-09 amounts to Rs 1,86,000 cr
Target of agricultural growth at 4%
Plan expenditure, for both Centre and States, to go up by Rs 61,000 crore over the interim budget
The govt has to sustain a growth of 9%
Govt provided three stimulus package
RBI took monetary measures to meet the needs of productive sector
This led to fiscal deficit to rise to 6.2% in 08-09
We achieved a growth of 6.7% of GDP last fiscal
Signal of recovery visible in the last few months
Strong mandate for growth
Sensitive to the challenges of a young India
Create 12 mn jobs per year
Reduce poverty levels by half by 2014
Infrastructure investment to more than 9% by 2014
Focus to sustaining momentum in exports
Strengthen primary healthcare delivery
There was a large rise and fall in WPI inflation in FY09
Broaden inclusive growth agenda
Signs of revival of domestic industry
Fiscal deficit has widened from 2.7 % to 6.2% of GDP
Institutional reforms to bring the fiscal deficit under control
To deepen the process of inclusive development
To reenergise govt, govt must provide service with accountability
Growth driver in the last 5 yrs has been private investment
Structure of Indian economy has changed in last 10 yrs
Now services constitutes more than 50% of GDP
Increase investment in infrastructure to 9% by 2014
To focus on infrastructure development
Growth co-operative effort of Centre and States
Job growth rate hit by dip in GDP
Integration of Indian economy with the world has opened up new opportunities and new challenges
Aim to return to FRBM target at the earliest
Significant increase in capital inflows needs
Fiscal stimulus at 3.5% of GDP helped economy revive
Private investment in Telecom, Railways have been successful
Unorganised sector accounts for 92% employment
Excise duty on PTA, DMT raised to 8% vs 4%
Target 23 mn tn iron ore output by NMDC FY10
Target 12 mn tn nitrogen fertilizer output FY10
 Budget estimates
Govt sees disinvestment revenues at Rs 11.20 bln
Govt to divest stake in RITES, Cochin shipyard, TCIL
Govt to divest stake in manganese ore, RINL, Sutlej jal
Govt FY10 fiscal deficit at 4.01 tn
Govt sets FY11 fiscal deficit target at 5.5% of GDP
Govt FY10 revenue deficit at Rs 2.83 tn
FY10 GDP growth at 6.5%
FY10 income tax seen at Rs 1.13 tn
Rs 1020838 cr total budget allocation for 09-10
Out of this more than Rs 6000 cr is planned expenditure while the rest is non-plan
Subsidy outlay at Rs 1.11 trillion in FY10
Increase in non-plan expenditure was due to pay commission and food subsidy
Non-plan expenditure at Rs 6.97 trl
Non-plan expenditure up 37% vs FY09 budget estimate
Interest payment consists of 36% of non-plan expenditure
Interest payments for FY10 at Rs 2.25 trillion
Total tax receipts expected at Rs 641079 cr
Non Tax receipts at seen at Rs 1.4 trillion
Revenue deficit is estimated at 4.8% and 4.6 as per provisional account for 09-10
Revenue deficit as percentage of GDP is pegged at 6.8%
To spend Rs 10.20 lakh crore as total expenditure in 2009-10, crossing the Rs 10 lakh mark for the first time in history
Increase in plan expenditure 34 %, non-plan at 37 %
Revenue deficit projected at 4.8% in FY 10
Fiscal deficit projected at 6.8 % in FY 10
Plan expenditure, for both Centre and States, to go up by Rs 61,000 crore over the Interim budget
India FY10 service tax receipts at Rs 65000 cr
India FY10 customs receipts at Rs 98000 cr
India FY10 excise receipts at Rs 106000 cr
India FY10 corporate tax receipts at Rs 257000 cr
2009/10 receipts from 3G auction Rs 35000 cr
2009/10 aims to raise Rs 1120 cr from stake sales
2009/10 market stabilisation scheme bond buy back plan worth Rs 38700 cr
2009/10 defence spending Rs 142000 cr
2009/10 subsidy bill Rs 11100 cr
Food subsidy burden seen at Rs 525 bln
Oil subsidy burden seen at 31 bln
FY10 fertilizer subsidy burden at 500 bln
2009/10 net market borrowing seen at Rs 398000 cr
2009/10 gross market borrowing seen at Rs 451000 cr
Indirect taxes changes to yield Rs 2000 cr in 2009/10
Tax proposals on direct taxes are revenue-neutral
To imposes service tax on certain legal services
Fully exempting branded jewellery from excise duty
To restore exemption of duty on goods manufactured at construction sites
Basic customs duty on biodiesel cut to 2.5 % from 7.5 %
Restores 8% excise duty on manmade fibres
 Infrastructure
We had set up IFFCL to provide financial assistance to infra companies
IIFCL will be given greater flexibility
IIFCL will refinance 60% of bank loans in critical sectors
IIFCL will evolve a take-out financing schemes for incremental funding in infra
PPP to be encouraged especially in infrastructure
Need to improve and strengthen regulatory framework
To speed up Golden Quadrilateral Project
Total investment of 100000 CFR in infrastructure
Need to remove bottlenecks for speedy implementation of infra projects
Highways allocated 23% more than 08-09
Rs 15800cr for Railways
JNURM allocation increased by 80% to Rs 12887 cr
Basic amenities for urban poor to get more than Rs 3000 cr to make country slum free in 5 yrs
Provision for housing urban poor at Rs 3973 cr
Allocation to NHAI increased to 23& Y-O-Y
Focus of NCC, Gammon for highway development
Fund for the urban mission up 87% to Rs 128.9 bln FY10
FY10 home basic services amenities, allocation hiked to Rs 39.73 bln
 Agriculture
Recent agricultural growth has been over 4%
Farm credit for FY9 has been 2.87 trillion
Farm debt waiver scheme extended by 6 months to Dec 31
Interest subvention scheme on short-term crop loans of up
to Rs 3 lakh at 7% interest rate will continue
Interest subvention of 1% more for farmers repaying loans
Sustained increased in plan allocation
Target credit flow Rs 325000 cr
Loans upto 3 lakh at 7% per annum
Those who pay their loans in time will get loans at 6%
Task force set up to look into farmer suicides in Maharashtra
Rajiv Gandhi Krishi Vikas Yojana allocation up by 30%
Fertilizer subsidy to go to farmers directly
To move towards Nutrient based subsidy regime
Additional allocation of Rs 1,000 crore for accelerated
irrigation project
60% population depended on agriculture
Central assistance for storm-water drainage project
increased to Rs 500 crore from Rs 200 crore in the interim
Budget
Target Agricultural credit inflows at Rs 3.25 lakh cr
 Exports
Sops given to exporters in Dec 2008 extended to March 2010
Market development assistance schemes allocation up by 180% to 124 cr
Interest subvention extended to march 2010 for employment extensive export sector
2% Interest subvention for exporters
Special fund for small industries development bank of Rs 400 cr
Focus to sustain momentum in exports
Extension of interest subvention scheme extended upto March 2010 to cover sectors like handicrafts and handlooms
Allocation for market development assistance scheme
enhanced by 148 per cent
To set up handloom mega clusters in Rajasthan, West Bengal and Tamil Nadu
To set up mega clusters for carpet in Srinagar, Mirzapur
Export Credit Guarantee scheme extended till March 2010
Tax holiday to exporter extended to 2011
 Oil and gas
Domestic oil prices should be in sync with global crude
National gas grid to be set up
Outlay for Assam Gas Project increased
Effective interest rate is 8% for farmers with foreclosures
Expert group to be set up petro product pricing
Domestic oil prices should be in syncy with global crude
To develop National Gas Grid
PSUs, banks and Insurance
To hike promoter shareholding in PSUs
Encourage people participation in disinvestment
Banks and insurance will remain in public sector and will get all support
Banking network to be expanded
One banking centre in every block planned
Capital in fusion in PSU banks to keep them competitive
160% hike in ADPRP
Scheduled commercial banks can set up offsite ATMs
33 mln new bank accounts due to inclusive banking
Threshold for non public promoter share holding to be raised
Rs 1 bln grant to ensure banking in unbanked sectors
>
 Social schemes
Creating entitlements backed by legal authority to provide basic facility to the aam aadmi
Social spending at Rs 3.75 tn
Rs 10 bn to rebuild AILA hit areas
NREGA gave employment to 4.4 cr household
Reserve wage of RS 100 per day as an entitlement under NREGA
Rs 39100 cr for 09-10 for NREGA an increase of 140%
NREGA allocation increase at 144%
New scheme PMAGY for integrated development of under developed villages
Incentives to banks to give loans to rural micro sector
Poverty eradication goal by 2014-15
Interest subsidy to poor families for loans upto Rs 1 lakhs
BPL entitled by law for Rs 25 kg of rice/wheat at Rs 3 kilo
Bharat Niraman allocation up 45%
PM Gram Sadak Yojana allocation up to Rs 12000 cr
Indira Gandhi Awas Yojana allocation up by 63%
Draft food security bill to be made public for debate
Rs 20 bln for rural homes from banks priority sector
Rural electrification allocation up 27% to Rs 70 bln
Interest subsidy of Rs 100,000 for poor women
To launch mission for female literacy
Rural health plan to get Rs 2.5 bln above interim fund
4.6 mln BPL families to be covered under new insurance scheme
>
 Pension
Substantially improve pension for armymen
Pension benefit extended to war wounded being liberalised
One Rank One Pension committee recommendations accepted
 Women and child development
Focus on women self help groups
22 lakhs such groups of women active today, aim to link such self help groups to banks
Corpus for such schemes to be raised to Rs 500 cr in this fiscal
Aim to reduce female literacy by half in 3 years
New scheme to give interest subsidy to poor students pursue any recognised course
 Environment and Climate change
Funding for the Ministry of Environment and Forests increased from Rs 1,707 cr in to
Rs 2129 cr
Rs 562 cr for national river and lakes conservation from Rs 335 crore from last year
Approved the notification for setting up the Ganga River Basin Authority
Tiger Project to get Rs 184 crore in 2009-10 from Rs 72 crore in 2008-09
Eight national missions representing a multi pronged long term and integrated approach to be launched
Special one time grant of Rs 100 cr given to Indian council of Forestry Research and Education Dehradun
Rs 15 cr each to be allocated to Botanical Survey of India and Zoological Survey of India. An additional amount of Rs 15 crore to be allotted to Geological Survey of India
Building accountable institutions
RTI act an important step in ushering in accountability
Rs 120 crore alloted to Unique ID project. Which marks a beginning of the private involvement in projects of national importance
First set of unique identity numbers to be rolled out in 12 to 18 months
 Police and security
Rs 430 cr for police modernisation
1 lakh housing units for central paramilitary forces
2284 cr for strengthening of borders
Defence outlay up from Rs 105600 cr in 08-09 to 104703 cr in 09-10
 Education
Rs 50 crore for Chandigarh University
Interest subsidy on loans for higher education
Rs 2130 crore to set upto more IITs and IIMs
Spending on higher education raised to Rs 2010 crore
Rs 8.27 bn for central university in uncovered states
Rs 500 mn for Punjab University in FY 10
Minorities
Allocation hiked from Rs 1000 cr to 1740 cr in 09-10
Scholarships for minorities
AMU to get Rs 25 cr for each of its new campuses
Rs 1740 crore outlay for minorities
 Others
Total expenditure at Rs 10.21 trillion
DEPB scheme for print media extended
Stimulus package for print media extended to Dec 31
Ministry of Overseas
Indian Affairs has been given a total allocation of Rs
80 crore for the financial year 2009-10 against last year`s
allocation of Rs 65 crore
Hike in allocation for management of Mumbai Floods
New project for modernisation of employment exchange under PPP
A national web portal for the same
New programme for rehabilitation of those effected by cylone Alia
Sri Lankan Tamils to get Rs 500 cr for the rehabilitation of IDPs in the island nation
Commonwealth games allocation up at Rs 34.72 bn
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