Chidambaram Presents Union Budget 2013-2014

Chidambaram Presents Union Budget 2013-2014

Finance Minister P.Chidambaram presented Union Budget for the year 2013-2014. Many wondered whether he takes tough measures to revive economy or will follow populist measures with an eye on 2014 elections. Following are the highlights of his Budget.

Following are highlights of the Budget:

FISCAL DEFICIT

* Fiscal deficit seen at 5.2 pct of GDP in 2012/13

* Fiscal deficit seen at 4.8 pct of GDP in 2013/14

* Faced with huge fiscal deficit, India had no choice but to rationalise expenditure

BORROWING

* Gross market borrowing seen at 6.29 trillion rupees in 2013/14

* Net market borrowing seen at 4.84 trillion rupees in 2013/14

* Short-term borrowing seen at 198.44 billion rupees in 2013/14

GROWTH

* India faces challenge of getting back to its potential growth rate of 8 pct

* India must unhesitatingly embrace growth as highest goal

SPENDING

* Total budget expenditure seen at 16.65 trillion rupees in 2013/14

* India’s 2013/14 plan expenditure seen at 5.55 trillion rupees

* Non-plan expenditure estimated at about 12 trillion rupees in 2013/14

* Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13, which is 96 pct of budget estimate

* Set aside 100 billion rupees towards spending on food subsidies in 2013/14

REVENUE

* Expect 133 billion rupees through direct tax proposals in 2013/14

* Expect 47 billion rupees through indirect tax proposals in 2013/14

CURRENT ACCOUNT DEFICIT

* India’s greater worry is the current account deficit – will need more than $75 billion this year and next year to fund deficit

INFLATION

* Food inflation is worrying, will take all steps to augment supply side

TAX

* Proposes surcharge of 10 pct on rich taxpayers with annual income of more than 10 million rupees a year

* To increase surcharge to 10 pct on domestic companies with annual income of more than 100 million rupees

* To continue 15 pct tax concession on dividend received by India companies from foreign units for one more year

* Propose to impose withholding tax of 20 pct on profit distribution to shareholders

* Amnesty on service tax non-compliance from 2007

* 10 billion rupees for first installment of balance of GST (Goods and Services Tax) payment

* Propose to reduce securities transaction tax on equity futures to 0.01 pct from 0.017 pct

* Time to introduce commodities transaction tax (CTT)

* CTT on non-agriculture futures contracts at 0.01 pct

CORPORATE SECTOR AND MARKETS

* Plans to issue inflation-indexed bonds

* Proposes capital allowance of 15 pct to companies on investments of more than 1 billion rupees

* Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements

* Insurance, provident funds can trade directly in debt segments of stock exchanges

* FIIs can hedge forex exposure through exchange-traded derivatives

* Investor with less than 10 pct stake in a company will be regarded as FII, more than 10 pct stake as FDI (foreign direct investment)

* Stock exchange regulator will simplify know-your-customer norms for foreign portfolio investors

* To implement quickly recommendations of financial sector legislative reforms commission

POWER AND ENERGY SECTOR

* Proposes zero customs duty for electrical plants and machinery

* Proposes to move to revenue-sharing from profit-sharing policy in oil and gas sector

* To equalise duties on steam and bituminous coal to 2 pct customs duty and 2 pct cvd (countervailing duty)

FOREIGN TRADE

* To cut duty on exports of precious and semi-precious stones to 2 pct from 10 pct

* No duty on import of ships, vessels

BANKING

* To provide 140 billion rupees capital infusion in state-run banks in 2013/14

DEFENCE

* To allocate 2.03 trillion rupees to defence in 2013/14

AGRICULTURE

* To allocate 801.94 billion rupees to rural development in 2013/14

* Plan to allocate 270.49 billion rupees for agriculture in 2013/14

Costlier and Cheaper commodities

Cigarettes, Mobiles, Imported Luxury Cars, SUV’s, High Capacity Motorcycles, Set Top Boxes, DTH Services and Hotels to be costlier

Service Tax on Film Industry scrapped.

Leather goods, Books, Footwear and Readymade garments will be cheaper.

Surcharge of 10% on persons who earn more than Rs. 1 Crore

New Sea Ports in Andhra Pradesh and Bengal.

No Change in Income Tax Slabs

TDS of 1 % on land deals over Rs. 50 lakh

3000 km of road projects to be approved

Additional IT exemption of 1 lakh for taxpayer taking 1st home loan worth upto Rs 25 Lakhs

Excise rate, service tax rate unchanged

4.5 % increase in Defence Budget at Rs. 2.03 trillion

Clean drinking water and sanitation projects allocated Rs. 15,260 Crores

Allocation of 1,400 Crores for fluoride affected areas

FM Radio in all cities that have a population of 1 lakh or more.


Comments are closed.