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Interim budget may see modest hike in spendings
New Delhi, Jan 26: The interim budget to be presented by Finance Minister Jaswant Singh on February 03 is likely to see a modest hike in government expenditure and yet contain fiscal deficit and keep the tax rate unchanged.
New Delhi, Jan 26: The interim budget to be presented by Finance Minister Jaswant Singh on February 03 is likely to see a modest hike in government expenditure and yet contain fiscal deficit and keep the tax rate unchanged.
The interim budget will have a vote-on-account for approving the Centre's expenditures for the first four months of 2004-05, besides a finance bill allowing government to levy indirect taxes beyond February 28 and direct taxes from April onward at the current rate, a senior finance ministry official said.
When the full budget is presented by the new government after the Lok Sabha elections, there would be yet another finance bill (number two) for 2004, which would incorporate any changes in tax rates.
While government is unlikely to present the pre-budget economic survey this time, the Finance Minister may give a detailed presentation of the state of the economy till December 2003 in his interim budget.
It has now become mandatory for government to present quarterly review of the economy as envisaged in the Fiscal Responsibility and Budget Management Act of 2003.
Singh would highlight the feel-good factors following a buoyant economic growth at over 7.0 per cent during the first half of 2003-04, a thriving external economy with exports logging double digit growth and burgeoning forex reserves that crossed 100 billion dollar mark in December end, sources said.
There are strong indications that fiscal deficit would be less than the budgeted 5.6 per cent during 2003-04, mainly due to higher growth in direct taxes and the economy as a whole.
The fiscal deficit will be lower despite an estimated Rs 2,500 crore revenue loss on account of the reduction of peak customs duty on non-farm goods by 5.0 per cent, abolition of special additional duties, excise cuts in various items in power, telecom, IT, electronics, health and civil aviation.
While government will try to reduce its fiscal deficit below 5.6 per cent in 2004-05, the interim budget is likely to incorporate a portion of the ambitious Rs 1,10,000 crore expenditure that Singh announced on January 08.
The break-up of the expenditure is -- Rs 50,000 crore for agriculture, Rs 50,000 crore for infrastructure and Rs 10,000 crore for small and medium scale sector.
The government would have to foot part of the bill for providing social security schemes and other welfare measures announced for agriculture and railways recently. Bureau Report
When the full budget is presented by the new government after the Lok Sabha elections, there would be yet another finance bill (number two) for 2004, which would incorporate any changes in tax rates.
While government is unlikely to present the pre-budget economic survey this time, the Finance Minister may give a detailed presentation of the state of the economy till December 2003 in his interim budget.
It has now become mandatory for government to present quarterly review of the economy as envisaged in the Fiscal Responsibility and Budget Management Act of 2003.
Singh would highlight the feel-good factors following a buoyant economic growth at over 7.0 per cent during the first half of 2003-04, a thriving external economy with exports logging double digit growth and burgeoning forex reserves that crossed 100 billion dollar mark in December end, sources said.
There are strong indications that fiscal deficit would be less than the budgeted 5.6 per cent during 2003-04, mainly due to higher growth in direct taxes and the economy as a whole.
The fiscal deficit will be lower despite an estimated Rs 2,500 crore revenue loss on account of the reduction of peak customs duty on non-farm goods by 5.0 per cent, abolition of special additional duties, excise cuts in various items in power, telecom, IT, electronics, health and civil aviation.
While government will try to reduce its fiscal deficit below 5.6 per cent in 2004-05, the interim budget is likely to incorporate a portion of the ambitious Rs 1,10,000 crore expenditure that Singh announced on January 08.
The break-up of the expenditure is -- Rs 50,000 crore for agriculture, Rs 50,000 crore for infrastructure and Rs 10,000 crore for small and medium scale sector.
The government would have to foot part of the bill for providing social security schemes and other welfare measures announced for agriculture and railways recently. Bureau Report