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UNION BUDGET 2010-11

-Mishaal Hamza


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Kalams Vision!!

Union Budget '10-'11

Vision 2020 for building astrongIndia

How farare we? 10 yearsmore and

does the Union Budget

10 goin that direction?


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Whats in store for this year?

Challenges: Double Digit growth path

Harness economic growth to consolidate

the recent gainsin making development

more inclusive

Address the weaknessesin government

systems,structuresand institutionsat

differentlevelsof governance.



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Overviewof Indian Economy

Broad-based counter-cyclic policy package torespond to the negative fallout

GDP Growth for 2009-10 pegged at 7.2%

Growth Rate ofManufacturing Sectorat 18.5%

Emergence of the double digit Inflation rate



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WhatPranab offers

RBI to give additional banking licenses to privatesector players. NBFCs could also be considered,ifthey meet the RBIs eligibility criteria

Rs.16,500 crores provided to ensure that the PublicSector Banksare able toattain aminimum 8% Tier-Icapital by March 31, 2011.

Government to provide further capital tostrengthenthe RRBs

Extension of existing interestsubvention of 2 percent forone more year for exports coveringhandicrafts, carpets,handloomsand smallandmedium enterprises



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Agriculture

Rs. 400 crores provided to extend the Green Revolution

Rs. 300 crores provided toorganize 60,000 pulsesandoilseed villagesin rain-fed areas

Rs. 200 crores provided forsustaining the gainsalreadymade in the green revolution areas throughconservation farming

FCI tohire godowns from private parties

fora guaranteed period of 7 years Agriculture credit flow through banks to

be setata targetof Rs.3,75,000 Crores



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Infrastructure

Rs 1,73,552 crore provided forinfrastructuredevelopmentwhichaccounts forover 46% of the totalplan allocation

Allocation forroad transportincreasedby over 13 per cent from Rs. 17,520

Rs 19,894 crores

Rs 16,752 crore provided for Railways,

whichisabout Rs.950 crore more than

last year.



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Energy

Plan allocation for power

sector excluding RGGVY

Rs.5,130 crores

Bidding process forallocating

coal blocks for captive mining

Ministry of Newand Renewable Energy to get

Rs.1,000 crore in 2010-11 Solar,smallhydroand micro power projectsata

costofabout Rs.500 crore to be set up in Ladakhregion of Jammu and Kashmir



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Environment and ClimateChange

NationalClean Energy Fund for funding researchandinnovative projectsin clean energy technologies to beestablished.

One-time grantof Rs.200 crore to the Govtof Tamil Nadutowards the costofinstallation ofazeroliquid discharge

systemat Tirupur tosustain knitwearindustry

Rs.200 crore provided asa Special Golden Jubilee package forGoa to preserve the naturalresourcesof the State,including

sea beachesand forest cover Allocation for National Ganga River Basin Authority (NGRBA)

doubled in 2010-11 to Rs.500 crore

(Contd..)



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Environment and ClimateChange

Schemeson bank protection worksalong river Bhagirathiand river Ganga-Padma in partsofMurshidabad and NadiadistrictofWest Bengalincluded in the Centrally SponsoredFlood ManagementProgramme.

A projectat Sagar Island to

be developed to provide an

alternate port facility in West

Bengal.



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Education

Plan allocation forschool education increasedby 16 per cent from Rs.26,800 crore in 2009-10 to Rs.31,036 crore in

2010-11.

In addition, Stateswillhave

access to Rs.3,675 crore for

elementary education underthe 13th Finance Commission

grants for 2010-11.



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Health

An AnnualHealth Survey to preparethe DistrictHealthProfile ofallDistricts

shall be conducted in 2010-11.

Plan allocation toMinistry ofHealth &Family Welfare increased from Rs

19,534 crore in 2009-10 to Rs 22,300

crore for 2010-11.



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Financial Inclusion

Appropriate Banking facilities to be provided tohabitationshaving population in excessof 2000 byMarch, 2012

Insurance and otherservices to be provided using theBusinessCorrespondentmodel. By thisarrangement,itis proposed to cover 60,000 habitations.

Augmentation of Rs.100 crore each for the Financial

Inclusion Fund (FIF) and the Financial InclusionTechnology Fund,whichshall be contributed byGovernmentof India, RBI and NABARD



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Rural Development

Rs. 66,100 crore provided for RuralDevelopment

Allocation forMahatma Gandhi

National Rural Employment

Guarantee Scheme stepped up toRs.40,100 crore in 2010-11

An amountof Rs.48,000 crore

allocated forruralinfrastructure

programmes under Bharat Nirman Unit cost under IndiraAwas Yojana increased to Rs.45,000 in

the plain areasand to Rs.48,500 in the hilly areas. Allocationfor thisscheme increased to Rs.10,000 crore.



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Rural Development

Allocation to Backward Region Grant Fund enhanced by 26per cent from Rs.5,800 crore

in 2009-10 to Rs 7,300 crore

in 2010-11 Additional centralassistance

of Rs 1,200 crore provided

for droughtmitigation in

the Bundelkhand region



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Urban Development

Allocation for urban developmentincreased by more than75 per cent from Rs.3,060

crore to Rs.5,400 crore

Allocation forHousing andUrban Poverty Alleviation

Rs.1,000 crore

Rs.1,270 crore allocated for

Rajiv Awas Yojana ascompared to Rs.150 crore last year



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Social Welfare

Saakshar Bharat to furtherimprove femaleliteracy rate launched with atargetof 7 crorenon-literate adultswhichincludes 6 crore women

Plan allocation forthe Ministry ofMinority Affairsincreased by 50 per cent from Rs.1,740 crore to

Rs.2,600 crore

Mahila Kisan Sashaktikaran Pariyojanatomeetthe specific needsofwomen farmersto be

launched with a provision of Rs 100 crore as asub-componentofthe National Rural LivelihoodMission



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STRENGTHENINGTRANSPARENCY &PUBLIC ACCOUNTABILTY

Rs 1,900 crore allocated to the Unique Identification Authorityof India (UIDAI) for 2010-11. Firstset

of UID numbersin the coming year.

A Technology Advisory Group forUnique Projects (TAGUP) to be set up

tolookinto various technologicaland

systemic issues for effective tax

administration and financial governance Independent Evaluation Office (IEO) chaired by the Deputy

Chairman,Planning Commission to be set up to evaluate theimpactof flagship programmes.



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Security and Justice


Allocation forDefence increased to Rs. 1,47,344 croreincluding Rs 60,000 crore for

Capital expenditure

About 2,000 youth to be recruitedas constablesin five CentralPara

Military Forces from Jammu and

Kashmirin the year 2010.

Governmenthasapproved the setting up of the NationalMission forDelivery of Justice and Legal Reforms tohelpreduce legal backlog in courts froman average of 15 yearsat present to 3 years by 2012.


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BUDGETESTIMATES 2010-11

Gross Tax Receiptsare estimated at Rs. 7,46,651 crore

Non Tax Revenue Receiptsare estimated at Rs. 1,48,118crore

Total expenditure proposed in the Budget Estimatesis Rs.11,08,749 crore,whichisan increase of 8.6 per centoverlastyear

Plan expendituresin estimated at Rs. 3,73,092 Cr for10-11

Non-P

lan expendituresin estimated at Rs. 7,35,657C

r Fiscal deficit for BE 2010-11 at 5.5% of GDP,whichworksout

to Rs.3,81,408 crore.



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TAXPROPOSALS

Centralized Processing Centre at Bengaluru processing20,000 returns daily

Automation ofCentral Excise & Service Tax

Bi-lateral discussions commenced to enhance the exchangeof bankrelated and otherinformation to effectively track taxevasion and identify undisclosed assetsofresident Indianslying abroad

Income tax department to notify SARAL-II form forindividualsalaried taxpayers for the coming assessmentyear.



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Direct Taxes

Income upto Rs 1.6 Lakh Nil

Rs 1.6 Lakh to Rs. 5 Lakh 10%

Rs 5 Lakh to Rs 8 Lakh 20% Income above 8 Lakh 30%


TAX SLAB


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Direct Taxes

Currentsurcharge of 10 per centon domestic companiesreduced to 7.5 per cent

Rate ofMinimum Alternate Tax (MAT) increased from the

currentrate of 15% to 18 % of book profits. Limits for turnoveroverwhichaccounts need to be audited

enhanced to Rs. 60 lakh for businessesand to Rs. 15 lakhfor professions



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Indirect Taxes

Rate reduction in Central Excise duties to be partially rolled backand the standard rate on all non-

petroleum products enhanced

from 8% to 10% ad valorem.

Excise duty on large cars,multi-

utility vehiclesand sports-utility

vehiclesincreased by 2% points

to 22 per cent

Restore the basic duty of 5% on crude petroleum. Central Exciseduty on petrol & diesel enhanced by Re.1/litre each

Excise duty on cigarettes, cigarsand cigarillos to be madecoupled withsome increase in rates



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Medical Sector

Uniform, concessional basic duty of 5 per cent,CVDof 4 per centwith full exemption fromspecialadditional duty prescribed on allmedical

equipments Full exemption currently available tomedical

equipmentand devicessuchasassistive devices,rehabilitation aids etc

Specified inputs for the manufacture oforthopaedicimplants exempted fromimport duty.

Unio

n Budget '10-'11


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Precious Metals

On gold and platinum from Rs.200 per 10 grams to Rs.300per 10 grams

On silver from Rs.1,000 perkg to Rs.1,500 perkg Basic customson Rhodium- a precious

metal used for polishing Jewellery

reduced to 2 per cent

The excise duty on refined gold made

fromsuchore or concentrate reduced

from 8% toaspecific duty of Rs.280

per 10 grams.Union Budget '10-'11


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Other Proposals

CustomsDuty reduced on production ofmicro-wave ovens from10% to 5%

Value limitof Rs. 1 lakh perannumon duty-free importofcommercialsamplesas personal baggage enhanced to Rs. 3 lakh

p.a

Toy balloons fully exempted fromCentral Excise duty

Reduction in basic customs duty on long pepper from 70 per centto 30 per cent

Reduction in basic customs duty on asafoetida from 30% to 20% Reduction in central excise duty on replaceable kits forhousehold

type water filtersother than those based on RO technology to 4%



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Other Proposals

Reduction in central excise duty on corrugated boxesandcartons from 8 per cent to 4 per cent

Reduction in central excise duty on latex rubber thread from

8 per cent to 4 per cent Reduction in excise duty on goods covered under the

Medicinaland ToiletPreparations Act from 16 per cent to 10per cent

Proposalsrelating to customsand central excise areestimated toresultin a netrevenue gain of Rs. 43,500 crorefor the year



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Service Tax

Rate of tax on servicesretained at 10 per cent to pave theway forward for GST

Proposalsrelating toservice tax are estimated toresultin a

netrevenue gain of Rs3,000 crore for the year Accredited newsagencieswhich provide news feed online

thatmeet certain criteria, exempted fromservice tax



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Proposals

Proposalson direct taxes estimated toresultin arevenue lossof Rs. 26,000 crore

Indirect Taxes estimated toresultin a netrevenue gain of Rs.46,500 crore

Netrevenue gain is estimated to be Rs.20,500 crore for the year



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THANK YOU


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