Budget India : Highlights of Budget 2009-2010
admin July 6th, 2009
Highlights of Budget 2009
* Growth rate in 2008-09 dipped to 6.7 per cent from average 9 per cent growth in previous three fiscal years.
* Mukherjee intends to make pre-budget consultations with state finance ministers an annual affair
* Fiscal deficit grew from 2.7 per cent to 6.8 per cent of GDP
* We need institutional reforms to being fiscal deficit down, says the FM.
* Total fiscal stimulus during 2008-09 amounts to Rs 1,86,000 crore.
* To return to FRBM target for fiscal discipline at the earliest, says Mukherjee.
* Fiscal deficit in 2009-10 is proposed at 6.8 per cent of GDP.
Taxes
* Share of direct taxes has increased to 56 per cent in 2008-09 over 41 per cent in 2007-08.
* Direct Tax code to be released in 45 days along with discussion paper.
* Effort is to improve tax collection by eliminating distortions in tax system and expanding the base
Tax proposals
* No change in Corporate Tax.
* Ten per cent surcharge on personal income tax removed.
* I propose to raise by Rs 10,000 the exemption limit for women on income tax. For all others, Rs 10,000 up from Rs 1,50,000, says Mukherjee.
* Income Tax rates exemption limit to 2,25,000 to 2,40,000 for senior citizens.
* Fringe benefits tax abolished.
* Tax holidays extended by one more year.
* Commodities transaction tax abolished.
* Proposal to incentivise business. I propose to start Investment linked tax benefits in areas of agriculture and national grid, says Mukherjee.
* To further improve the efficiency of tax system, I propose to set up two authorities for advance ruling, says Mukherjee.
* Minimum Alternate Tax on book profits increased to 15 per cent from 10 per cent.
* New pension system trust exempted from security transaction tax and dividend distribution tax.
* Income tax incentives on education loans expanded to cover vocational studies after schooling.
* Small businesses up to Rs 40 lakh turnover exempted from filing advance tax returns.
* Presumptive Taxation of 8 per cent on businesses of turnover of up to Rs 40 lakh.
* Service Tax to be extended to lawyers on technical advice.
* Service tax exempted for exporters on select services.
* IT returns to be made simpler, says Mukherjee.
* Govt to extend tax waiver on some exports to March 2010.
New/Increased Duty
* Customs duty of 5 per cent being levied on import of set-top boxes used under Conditional Access System (CAS).
* Customs duty on gold and silver import increased.
* Customs Duty to be reduced on drugs for heart treatment.
* Proposal to restore optional 4 per cent CENVAT on cotton textiles beyond fibre stage.
* Excise duty on fibre for cheaper cloth reduced.
* Full exemption from excise duty on pre-fabricated concrete slabs to help construction industry.
* Excise duty on petrol-driven small trucks reduced to ten per cent.
* Full exemption from excise duty on branded jewellery.
Finance allocation
* Rs 2,113 crore allocated for IITs and new IITs.
* Allocation for Commonwealth Games increased to Rs 3472 crore from Rs 2112 crore.
* I propose to allocate Rs 500 crore for rehabilitation of internally displaced Tamils in Sri Lanka, says Mukherjee.
* Rs 1,000 crore for rebuilding infrastructure damaged by the recent ‘Aila’ cyclone in West Bengal.
* Total budget expenditure for 2009-10 will Rs 10,28,032 crore, crossing Rs 10 lakh crore mark for the first time since Independence.
* Plan expenditure, for both Centre and States, to go up by Rs 61,000 crore over the interim budget.
* Defence gets Rs 1,41,703 crore for 2009-10, a 34 per cent hike from 2008-09 budgetary allocation of Rs 1,05,600 crore.
Infrastructure
* Indian Infrastructure Financial Corporation Limited (IIFCL) to evolve financing mechanism for giving increased support to infrastructure projects.
* Indian Infrastructure Finance Company Limited will re-finance commercial bank loans upto 60 per cent in critical projects through public private partnership to the tune of Rs 1,00,000 crore to raise investment in the sector.
* More funds allocated to help Mumbai fight floods during rains.
* Allocations for highways being stepped up by 23 per cent.
* Allocation for urban poor for provision for housing and basic amenities to be raised to Rs 3,973 crore in the current year.
* Allocation for Jawaharlal Nehru Urban Renewal Mission increased by 87 per cent to Rs 12,887 crore.
* Central assistance for storm-water drainage project increased to Rs 500 crore from Rs 200 crore in the interim budget.
Agriculture
* Target for agriculture credit raised to Rs 3,25,000 crore in 2009-10 from Rs 2,87,000 crore.
* Incentives in interest rates to farmers to pay back agriculture loans in time.
* Additional allocation of Rs 1,000 crore for accelerated irrigation project.
* Subsidy regime for fertilisers to change to nutrient-based rather than price-based.
Growth schemes
* ‘Aam admi’ is the focus of all our programmes and schemes, says Mukherjee.
* Export Credit Guarantee scheme extended till March 2010.
* Allocation for market development assistance scheme enhanced by 148 per cent.
* Extension of interest subversion scheme extended upto March 2010 to cover sectors like handicrafts and handlooms.
* Extension of stimulus package for print media by another six months beyond June 30 in view of the economic downturn.
Rural and Social Sector Development
* An expert committee to be set up to advise on viable and sustainable pricing system for imported petroleum products.
* Government is committed to provide Rs 100 a day as wages under NREGA, says Mukherjee.
* Banks and insurance firms to remain in public sector.
* Rs 100 crore to be given as one time grant in aid to expand banks in unbanking areas.
* Work on National Food Security scheme for providing food at cheaper rates to the poor has begun, says Mukherjee.
* An allocation of Rs 39,100 crore to be made for NREGA in 2009-10, an increase of 144 per cent.
* NREGA coverage increased from 3.39 crore households in 2007-08 to 4.74 crore households in 2008-09.
* Allocation for flagship Bharat Nirman progamme is being raised by 45 per cent.
* For Indira Awas Yojana, allocation to be increased by 63 per cent in 2009-10 to touch Rs 8,800 crore.
* Rashtriya Mahila Kosh corpus to be raised from Rs 100 crore to Rs 500 crore.
* National Mission for Female Literacy with emphasis on minorities, Scheduled Castes and Scheduled Tribes to be launched. Fifty per cent of all rural women to be brought into self-help group programmes.
* Rs 2,000 crore for rural housing fund under National Housing Bank.
* Full interest subsidy for students taking courses in approved institutions. Five lakh students to benefit.
* Modernisation of national exployment exchanges to be carried out.
* Action initiated to provide social security to unorganised sector workers, says Mukherjee.
* Allocation for National Rural Health Mission to be raised by Rs 257 crore over and above the outlay in the interim budget.
* Under National Action Plan on climate change, eight national missions are being launched. For one of the missions, National Ganga Project, Government proposes to increase allocation to Rs 562 crore.
* First Unique Identification Card to citizens to roll out in 12-18 months. I propose provision of Rs 120 crore for the project, says the Finance Minister.
* New pension benefits for 12 lakh jawans and Junior Commissioned Officers from July.
* One lakh dwelling units for paramilitary forces personnel to be constructed.
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