New Delhi: Finance minister Pranab Mukherjee began presenting the Union budget for 2010-11 in the Lok Sabha today after the Cabinet approved the document. Here are some of the highlights of his budget speech.
•The Indian economy was facing grave uncertainty. Growth had started decelerating when the interim and full budget for 2009-10 were presented.
•At home there was added uncertainty because of subnormal southwest monsoon.
•Yet, the economy now in a far better position than it was
eight years ago.
•India weathered the economic crisis well and emerged from the global slowdown faster than any other country.
•First challenge before the government is to quickly revert to
high GDP growth path of 9%.
•Expects 10% economic growth in the near future.
•Second challenge is to harness economic growth to make it more inclusive and consolidate gains.
•Third challenge is to overcome weakness in government’s public delivery mechanism; a long way to go in this.
•Impressive recovery in the past few months. Can witness
faster recovery in the coming months.
•Food security has been strengthened.
•But bottleneck of the public delivery mechanism can hold us back.
•Fiscal year 2009-10 was challenging for the economy.
•Focus shifted to non-governmental actors and an enabling government. Government now concentrates on supporting and delivering services to the poorer sections.
•Economy stabilised in the first quarter of 2009 itself.
•18.5% manufacturing growth in December was the highest in two decades.
•Figures for merchandise exports for January encouraging
after turnaround in November and December last year.
•Double digit food inflation last year due to bad monsoon
and drought-like conditions.
•Government conscious of the price rise and taking steps to tackle it.
•Erratic monsoon and drought-like conditions forced supply-side bottleneck that fuelled inflation.
•Need to review stimulus imparted to economy last year to overcome the recession.
•Need to ensure that the demand-supply imbalance is managed.
•Need to make growth more broad-based.
•Need to review public spending and mobilise resources.
•Status paper on public debt within six months.
•Government hopes to implement direct tax code from April 2011.
•Earnest endeavour to implement general sales tax in April 2011.
•Government will raise Rs25,000 crore from divestment of its stake in state-owned firms.
•Kirit Parekh report on fuel price deregulation will be taken up by petroleum minister Murli Deora in due course.
•Nutrient-based fertiliser subsidy scheme to come into force from April 1 this year.
•Nutrient-based fertiliser subsidy will reduce volatility of subsidy and also reduce it.
•Market capitalisation of five public-sector undertakings listed since October increased by 3.5 times.
•FDI inflows steady during the year. Government has taken
series of steps to simplify FDI regime. Intends to make FDI policy user friendly by compling all guidelines into one document.
•Government has decided to set up apex-level Financial
Stability and Development Council.
•RBI considering issuing banking licences to private companies. Non-banking finance companies will also be considered if they meet the criteria.
•Government to provide Rs16,500 crore to public-sector
banks to maintain tier-I capital.
•Government to continue interest subvention of 2% for one more year for exports covering handicrafts, carpets,
handlooms and small and medium enterprises.
•Government to provide Rs300 crore to organise 60,000 pulse and oilseed villages and provide integrated intervention of watershed and related programmes.
•Rs200 crore provided for climate-resilient agriculture
•Government committed to ensuring continued growth of
special economic zones.
•Need to take firm view on opening up of the retail sector.
•Deficit in foodgrains storage capacity to be met with private-sector participation.
•Period for repayment of loans by farmers extended by six months to June 30, 2010, in view of the drought and floods in some parts of the country.
•Interest subvention for timely repayment of crop loans raised from 1% to 2%, bringing the effective rate of interest to 5%.
•Road transport allocation raised by 13% to Rs19,894 crore.
•Proposal to maintain thrust of upgrading infrastructure in rural and urban areas. IIFCL authorised to refinance infrastructure projects.
•Rs1,73,552 crore provided for infrastructure development.
•Allocation for railways fixed at Rs16,752 crore, an increase of Rs950 crore over the last financial year.
•Government proposes to set up Coal Development Regulatory Authority.
•Mega power plant policy modified to lower cost of generation; allocation to power sector more than doubled to Rs5,130 crore in 2010-11.
•Government favours competitive bidding for coal blocks for captive power plants.
•Rs500 crore allocated for solar and hydro projects for the Ladakh region in Jammu & Kashmir.
•Clean Energy Fund to be created for research in new energy sources.
•Allocation for new and renewable energy ministry increased by 61% to Rs1,000 crore.
•One-time grant of Rs200 crore provided to Tirupur textile cluster in Tamil Nadu.
•Allocation for National Ganga River Basin Authority doubled to Rs500 crore.
•Alternative port to be developed at Sagar Island in West Bengal.
•Draft of Food Security Bill ready, to be placed in the public domain soon.
•Outlay for social sectors pegged at Rs1,37,674 crore, accounting for 37% of the total plan allocation.
•Plan allocation for school education raised from Rs26,800 crore to Rs31,036 crore in 2010-11.
•25% of plan outlay earmarked for rural infrastructure development.
•Plan allocation for health and family welfare increased to Rs22,300 crore from Rs19,534 crore.
•For rural development, Rs66,100 crore have been allocated.
•Allocation for National Rural Employment Guarantee Authority stepped up to Rs40,100 crore in 2010-11.
•Indira Awas Yojana’s unit cost raised to Rs45,000 in the plains and Rs48,500 in hilly areas.
•Allocation for urban development increased by 75% to Rs5,400 crore in 2010-11.
•1% interest subvention loan for houses costing up to Rs20 lakh extended to March 31, 2011; Rs700 crore provided.
•Allocation for development of micro and small-scale sector raised from Rs1,794 crore to Rs2,400 crore.
•Rs1,270 crore provided for slum development programme, marking an increase of 700%.
•Government to set up National Social Security Fund with initial allocation of Rs1,000 crore to provide social security to workers in the unorganised sector.
•Government to contribute Rs1,000 per annum to each
account holder under the new pension scheme.
•Exclusive skill development programme to be launched for textile and garment-sector employees.
•Allocation for woman and child development increased by 80%
•Plan outlay for the social justice ministry raised by 80% to Rs4,500 crore.
•Plan allocation for minority affairs ministry raised from Rs1,740 crore to Rs2,600 crore.
•Financial-Sector Legislative Reforms Committee to be set
•Rs1,900 crore allocated for Unique Identification Authority of India.
•A unique identity symbol will be provided to the rupee in line with the US dollar, British pound sterling, euro and Japanese yen.
•Defence allocation pegged at Rs1,47,344 crore in 2010-11
against Rs1,41,703 crore in the previous year. Of this, capital expenditure would account for Rs60,000 crore.
•Planning Commission to prepare integrated action plan for
Naxal-affected areas to encourage "misguided elements" to eschew violence and join the mainstream.
•Gross tax receipts pegged at Rs7,46,656 crore for 2010-11, non-tax revenues at Rs1,48,118 crore.
•Total expenditure pegged at Rs11.8 lakh crore, an increase of 8.6%.
•Fiscal deficit at 5.5%.
•Fiscal deficit seen at 4.8% and 4.1% in 2011-12 and 2012-13, respectively.
•Non-plan expenditure pegged at Rs37,392 crore and plan expenditure at Rs7,35,657 crore in budget estimates. Proposed increase of 15% in plan expenditure and 6% in non-plan expenditure.
•Cash subsidy for fuel and fertiliser instead of previous practice of bonds to continue.
•Fiscal deficit pegged at 6.9% in 2009-10 as against 7.8% in the previous fiscal.
•Government’s net borrowing to be Rs3,45,010 crore for 2010-11.
•Income-tax department ready with two-page Saral-2 returns
form for individual salaried assesses.
•Personal income-ax rates pruned:
Income up to Rs1.6 lakh — nil
Income above Rs1.6 lakh and up to Rs5 lakh — 10%
Income above Rs5 lakh and up to Rs8 lakh — 20%
Income above Rs8 lakh — 30%
•Additional deduction of Rs20,000 allowed on long-term
infrastructure bonds for income-tax payers; this is above Rs1 lakh on savings instruments allowed already.
•Investment-linked tax deductions to be allowed to two-star hotels anywhere in the country.
•Weighted deduction of 125% for payments to approved associations doing social and statistical research.
•One-time interim relief to housing and real-estate sector.
•Businesses with a turnover of up to Rs60 lakh and professionals earning up to Rs15 lakh to be exempted from the obligation to audit their accounts.
•Housing projects allowed to be completed in five years instead of four to avail of tax breaks.
•Revenue loss of Rs26,000 crore on direct tax proposals.
•Central excise duty on all non-petroleum products raised to 10% from 8%.
•FM increases customs duty on crude oil to 5%, on diesel and petrol to 7.5%, and on other petroleum products to 10%.
•Structural changes in excise duties on cigarettes, cigars, and cigarillos.
•Clean energy cess of Rs50 per ton to be levied on coal produced in India.
•Concessional excise duty of 4% on solar cycle-rickshaws.
•Balloons exempted from central excise duty.
•Customs and central excise proposals to result in a net revenue gain of Rs43,500 crore.
•More services to be brought under the service tax net.
•Certain accredited news agencies exempted from payment of service tax.
•Net revenue gain from tax proposals pegged at Rs20,500 crore.