Budget 2009-2010 Highlights

Highlights

Taxes

· Surcharge of 10% on personal income tax removed

· 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

· Surcharge of 10% on personal income tax removed

· Propose to phase out surcharge on Direct Taxes

· To remove Fringe Benefit Tax

· 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%

· Commodity Transaction Tax scrapped

· 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) extended by a year

· GST to be a dual regime with Central and state terms

· No Securities Transaction Tax (STT) on sale/purchase of shares by NPT

Reforms, Tax 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

· Review and aims of the budget

· It a mandate we accept with humility and will do all we can for the welfare of the nation

· Strong mandate for growth

· Sensitive to the challenges of a young India

· The govt has to sustain a growth of 9% 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

· Plan to strengthen primary health care

· Broaden inclusive growth agenda

· Our target of agricultural growth at 4%

· 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

Challenges

· To get the GDP growth to 9% at the earliest

· 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 changes 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

For revival

· 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

· Uncertainty about revival of global economy remains

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

· Fiscal stimulus at 3.5% of GDP helped economy revive

· Sensitive to the needs of young India

· Endeavour to make Budget participatory and ensure continuity

· Significant increase in capital inflows needs

· 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 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

· Fiscal deficit has widened to 6.7% of GDP

· Target agriculture credit inflows ay Rs 3.25 lakh cr

· · Focus of NCC, Gammon for highway development

· JNNURM to get more than Rs 12000 cr up 87%

· Basic amenities for urban poor to get more than 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

· Fiscal deficit has widened to 6.7% of GDP

· Target agri credit inflows ay Rs 3.25 lakh cr

· Focus of NCC, Gammon for highway development

· Rural electrification allocation up 27%

Agriculture

· Interest subvention scheme for agriculture loans to continue

· 60% population depended on agri

· 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

· Central assistance for storm-water drainage project increased to Rs 500 crore from Rs 200 crore in the interim Budget

Exports

· Market development assistance schemes allocation up by 180% to 124 cr

· Interest subvention extended to march 2010 for employment extensive export sector

· Special fund for small industries development bank of Rs 400 cr

· Focus to sustain momentum in exports

· 2% Interest subvention for exporters

· 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

· Export Credit Guarantee scheme extended till March 2010

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

· 160% hike in ADPRP

· Capital in fusion in PSU banks to keep them competitive

Inclusive development

· Creating entitlements backed by legal authority to provide basic facility to the aam aadmi

· 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

Pilot project this year

· Poverty eradication goal by 2014-15

· Interest subsidy to poor families for loans upto Rs 1 lakhs

Pension

· Substantially improve pension for armymen

· Pension benefit extended to war wounded being liberalised

· One Rank One Pension committee recommendations accepted

National Food Security

· 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%

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

Climate change

· Rs 562 cr for national river and lakes conservation

To build accountable institutions:

· RTI act an important step in ushering in accountability

· Unique ID project is major step in this regard: it also marks a beginning of the private involvement in projects of national importance

Police and security

· Rs 430 cr for police modernisation

· 1 lakh housing units for central paramilitary forces

· Borders: 2284 cr for strengthening of borders

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

Minorities

· Allocation hiked from Rs 1000 cr to 1700 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

Budget estimates

· Rs 1020838 cr total budget allocation for 09-10

· Out this more than Rs 6000 cr is planned expenditure while the rest is non-plan

· Increase in non-plan expenditure was due to pay commission and food subsidy

· Interest payment consists of 36% of non-plan expenditure

· Defence outlay up from Rs 105600 cr in 08-09 to 104703 cr in 09-10

· Total tax receipts expected at Rs 641079 cr

· 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

Others

· DEPB scheme for print media extended

· Stimulus package for print media extended to Dec 31

· Hike in allocation for management of Mumbai Floods

· New project for modernisation of employment exchange

· A national web portal for the same

· New programme for rehabilitation of those effected by cylone Alia