Union Finance Minister P. Chidambaram presented his much anticipated budget proposals for the year 2013-14, bringing a partial relief for the lower income groups as no changes were made in Income Tax rates or slabs. His budget could be lauded for certain proposals like set up of a first women’s bank, Rs 1 lakh deduction for home loans and more focus on health, education, HRD and rural development.
However, most of the commodities and articles get costlier in the budget proposals. Smartphones, Cigarettes, watching movies and eating out in AC restaurants will be more expensive in the coming days. Even though, Chidambaram called “higher growth leading to inclusive, sustainable development” as his government’s mantra, he failed to satisfy middle class society presenting the budget today. The government expected to get Rs 13,300 crore from change in direct tax and indirect tax proposal to yield Rs 4,700 crore.
The Fiscal deficit was marginally lower than Economic Survey deficit figure of 5.3%, but it is enough to stop market decline for time being, as the minister expected.
Chidambaram looked more energetic while announcing the proposals for the fiscal 2013-14, which is the last budget before the general elections. He looked forward to change the fortunes of India, Asia’s third largest economy, after years of policy paralysis and global economic turmoil. He admitted that Indian export has been hit and global economy has slowed in the current fiscal. He said that Indian economy has slowed after 2010.
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However, he defended the government for Food inflation and price hike that put pressure on common men in India. The slow economy has affected all the nations, only China and Indonesia are growing faster than India. Hence, there was no reason for gloom or pessimism. He stressed on the encouragement of foreign investment, which should be the economic objective for a developing nation. He claimed that the government is committed to work towards development of the nation. He talked about the proposed National Food Security Bill, which is the promise of the UPA government. However, the Congress seems to have made things costlier for common citizens in India with the presentation of such budget, which announces tax hike in everything.
Here are the highlights of his proposals:
1. Rs 1630825 crore total expenditure, Rs 555322 crore plan expenditure, non-plan Rs 1199074 crore
2. Rs 41000 crore for Scheduled Caste and Rs 28500 crore for tribal welfare.
3. Rs 3,511 crore allocated to Minority Affairs Ministry which is 60% of the revised estimates.
4. Health and education for all remain priorities. Over Rs 33000 crore to health
5. Rs 4727 crore for medical research. Rs 1069 cr for the development in the ayurveda, allopathy and Homeopathy medical science
6. Rs 21,000 crore allocation for health sector
7. Allocation of Rs 65,000 crore for education sector
8. Rs 65000 crore to ministry of education, Rs 27257 crore to Sarva Shiksha Avijan
9. Rs 3983 for Rashtriya Madhyamik siksha abhiyan
10. Rs 13215 crore for mid-day meal scheme
11. Rs 17700 crore for ministry of children
12. Rs 110 crore to dept of disability affairs under specific scheme
13. Rs 1400 crore for water purification
14. Rs 65,867 cr allocated to ministry of human resources, 17% increase in budgetary support.
15. Rs 33000 crore for MNREGA
16. Rs 3400 crore for agricultural research
17. Rs 700000 crore for agricultural credit schemes.
18. Rs 1000 crore to support increased rice production in Eastern Indian states.
19. Rs 9954 crore and Rs 2250 crore for crop diversification under different schemes.
20. Rs 500 crore for crop diversification
21. Rs 15269 crore for water and sanitation
22. Rs 14,800 crore under JNNURM. Positive for Ashok Leyland, Tata Motors
23. National Livestock Mission launched with Rs 307 crore
24. Rs 10000 crore set apart for National Food Security Bill (if passed)
25. Rs 1650 crore for six more AIIMS-like medical institutes, which will start functioning this year.
26. All flagship programmes fully funded
27. Indian Institute of BioTechnology to be set up at Ranchi
28. Flagship Education scheme, Sarva Shiksha Abhiyan will receive 27,258 crore
29. Rs 5000 crore to NABARD to build cold storages and godowns
30. Rs 25000 crore to be raised from four infrastructure bonds
31. Rs 100 crore in machinery investment can avail an extra 15 per cent exemption over and above existing relaxations
32. Infra debt fund to be encouraged
33. First home loan up to Rs 25 lakh during 2013-14 will get an additional Rs 1 lakh interest deduction.
34. Income level for Rajiv Gandhi Equity Scheme raised by Rs 2 lakh
35. Zero custom duty for electrical machinery
36. Foodgrain production in 2013-14 will be over 250 million tonnes
37. RGESS to be liberalised to enable first time investor, income limit to be raised to Rs 10 lakh
38. Inflation indexed bonds and NSCs to be introduced
39. Coal imports to rise to 185 million tonnes from 100 million in four years.
40. A PPP project with Coal India in the pipeline to stem the outflow of forex.
41. New regulatory authority for road sector
42. Technology Upgrade scheme for textile sector to get Rs 2400 crore
43. Cabinet Committee on Investment formed to look into investments in various sectors
44. Work has started on the Bengaluru-Mumbai industrial corridor
45. RG Equity Saving Scheme to be liberalised to enable first time investor, income limit to be raised to Rs 12 lakh
46. Handloom sector to get an additional Rs 96 crore
47. Rs 80194 crore for rural development projects
48. To Introduce Inflation Indexed Bonds for two new ports in West Bengal and Andhra Pradesh.
49. 13 Public Sector Banks to get Rs 14000 crore
50. All Public Sector bank branches to have ATMs by end of 2014.
51. Proposal to set up first women’s public sector bank with Rs 1,000 crore by October 2013.
52. Rural housing to get Rs 6000 crore, urban housing Rs 2000 crore
53. NHB to set up Urban Housing bank
54. Banks permitted to act as insurance brokers; public sector banks can now set up ‘adalats’ and settle disputes over claims
55. Domestic workers, Anganwadi workers, etc to get group insurance
56. to review natural gas pricing policy
57. Comprehensive social security package for the most down-trodden and poor in the anvil
58. KYC of banks enough to get insurance
59. 17 per cent hike in education, 22 per cent in agriculture, 46 per cent for rural development
60. All towns of India with a population of over 10000 to have an LIC office
61. Rs 11500 crore for backward areas
62. National Skill Development Corporation to train 5 crore people in current plan period.
63. Rs 11,500 cr allocated as Backward Regions Grant Fund for Bihar, Bundelkhand and KBK region of Odisha
64. Defence gets Rs 2,20,000 crore (additional funds to be provided if needed), 86721 crore for capital expenditure.
65. Rs 5400 crore to department of space and Rs 5600 crore to department of atomic energy.
66. National Institute of Sports Coaching to be set up in Patiala at a cost of Rs 253 crore
67. Rashtriya Swasthya Bima Yojana to include rickshaw pullers, taxi drivers and ragpickers.
68. Rs 5,80,000 crore to states and Union Territories
69. Rs 1,000 crore for Nirbhaya Fund proposed for safety of women
70. Women, youth and poor are priority for the Government
Tax Proposals:
1. No changes in Income Tax rates or slabs
2. Relief for Rs 2-5 lakh income group. Rs 2000 tax credit for those earning up to Rs 5 lakh per annum.
3. Surcharge of 10% on income above Rs 1 crore per annum. Additional surcharge is only for a year
4. Surcharge on corporate taxes increased.
5. Slabs of 30%, 20% and 10% will continue.
6. DDT surcharge raised to 10% for 1 Year.
7. The educational cess for all taxpayers shall continue for one year
8. Education cess to continue at 3 per cent
9. 10 pc tax deduction for donations to National Children’s fund
10. TDS at 1 per cent on value of transfer of immovable property of over Rs 50 lakh
11. Introduces commodity transaction tax
12. proposes cut in STT rate
13. Agricultural commodity exempt from CTT
14. No change in basic rates in customs and excise duty
15. 1 per cent TDS on sale of immovable property over Rs. 50 lakh, not applicable to agricultural land.
16. Lower securities transaction tax on mutual fund payouts
17. Cigarettes and SUVs get costlier. 100 per cent Customs Duty on luxury cars. Specific excise duty on cigarettes increased by 18 per cent
18. Import duty on raw silk hiked to 15%
19. Six per cent duty on mobiles worth more than Rs 2,000.
20. Tax on motor vehicles up from 75 per cent to 100 per cent. Excise duty on certain SUVs hiked to 30 per cent
21. Set Top box import duty raised
22. Gold duty free limit raised to Rs 50,000 for men and to Rs 1 lakh for women travellers
23. Service tax to now apply on all A/C restaurants. All AC restaurants will have to pay service tax whether or not they serve alcohol.