Budget Overview, Important Budget Announcements,Budget 2009 Highlights, Union Budget 2009 Updates, Financial reforms, Budget 2009, Indian Budget

Budget Updates on Tax

To remove Fringe Benefit Tax
Surcharge of 10% on personal income tax removed
No change in Corporate taxes
Propose to phase out surcharge on Direct Taxes
States agree on basic structure of Goods and Services Tax
Commodity Transaction Tax scrapped
To create Alternate Tax disputes resolution mechanism for foreign companies
Software Technology Parks of India (STPI) extended by a year
To raise Minimum Alternate Tax(MAT) TO 15 % of book profit
MAT hiked from 10% to 15%
Carry Forward Tax credit on MAT to 10 year
To exempt Pension trust from Securities Transaction Tax
GST to be a dual regime with Central and state terms
No Securities Transaction Tax (STT) on sale/purchase of shares by NPT

Personal Income Tax Exemptions

Senior Citizens - Increase by Rs 15,000 to Rs 2,40,000
Women - Increase by Rs 10,000 to Rs 1,90,000
Others - Increase by Rs 10,000 to Rs 1,60,000

Affected Items After the Union Budget 2009-10

Rises	Falls
Mobile phones	Footwear
Set-top Boxes	LCD TVs
Gold Bars	Branded Jewellery
Gold Import	Drugs for Heart Treatment
Silver Import	Bulk Drugs
Cosmetic Surgery	Textiles
	Sports Products
	Leather Products
	Packaged software

Financial Reforms

Income tax procedure to be made simple through work on Saral 2 form
4 Years timeline for completion of Tax reform system
Balanced approach to financial de-regulation in justified

Aims, Fundamentals review

Fiscal deficit up from 2.7% to 6.8% of GDP
Total fiscal stimulus in 2008-09 amounts to Rs 1,86,000 cr
Target of agricultural growth at 4%
Fiscal deficit has widened to 6.7% of GDP
Govt has to sustain a growth of 9%
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
Strong mandate for growth
Sensitive to the challenges of a young India
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
Broaden inclusive growth agenda
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
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 changed 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
Significant increase in capital inflows needs
Fiscal stimulus at 3.5% of GDP helped economy revive

Highlights of Budget Estimates

Defence outlay up from Rs 105600 cr in 08-09 to 104703 cr in 09-10
Total tax receipts expected at Rs 641079 cr
Rs 1020838 cr total budget allocation for 09-10
Out of 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
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%
Plan expenditure, for both Centre and States, to go up by Rs 61,000 crore over the Interim budget
India FY10 service tax receipts at Rs 65000 cr
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
India FY10 customs receipts at Rs 98000 cr
India FY10 excise receipts at Rs 106000 cr
India FY10 corporate tax receipts at Rs 257000 cr
2009/10 aims to raise Rs 1120 cr from stake sales
2009/10 market stabilisation scheme bond buy back plan worth Rs 38700 cr
2009/10 defence spending Rs 142000 cr
2009/10 subsidy bill Rs 11100 cr
2009/10 receipts from 3G auction Rs 35000 cr
2009/10 net market borrowing seen at Rs 398000 cr
2009/10 gross market borrowing seen at Rs 451000 cr
Tax proposals on direct taxes are revenue-neutral
To imposes service tax on certain legal services
Indirect taxes changes to yield Rs 2000 cr in 2009/10
Fully exempting branded jewellery from excise duty
Basic amenities for urban poor to get more than Rs 3000 cr to make country slum free in 5 yrs
To restore exemption of duty on goods manufactured at construction sites
Basic customs duty on biodiesel cut to 2.5 % from 7.5 %
Restores 8 % excise duty on manmade fibres

Infrastructure

IFFCL set up 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
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

Allocation

Rs 15800cr for Railways
Highways allocated 23% more than 08-09
JNURM allocation increased by 80% to Rs 12887 cr
Basic amenities for urban poor to get more than Rs 3000 cr to make country slum free in 5 yrs
Provision for housing urban poor at Rs 3973 cr
Focus of NCC, Gammon for highway development
Rural electrification allocation up 27%
Allocation to NHAI increased to 23& Y-O-Y
Provision for housing urban poor at Rs 3973 cr

Agriculture

Interest subvention scheme for agriculture loans to continue
60% population depended on agriculture
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
Target Agricultural credit inflows at Rs 3.25 lakh cr

Exports

Market development assistance schemes allocation up by 180% to 124 cr
Focus to sustain momentum in exports
2% Interest subvention for exporters
Interest subvention extended to march 2010 for employment extensive export sector
Special fund for small industries development bank of Rs 400 cr
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
Need 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
Expert group to be set up petro product pricing
Outlay for Assam Gas Project increased
Effective interest rate is 8% for farmers with foreclosures
To develop National Gas Grid
Domestic oil prices should be in syncy with global crude

PSUs, Banks and Insurance

To hike promoter shareholding in PSUs
Banks and insurance will remain in public sector and will get all support
One banking centre in every block planned
Banking network to be expanded
Encourage people participation in disinvestment
Capital infusion in PSU banks to keep them competitive
160% hike in ADPRP

Inclusive Development

Creating entitlements backed by legal authority to provide basic facility to the aam aadmi
NREGA gave employment to 4.4 cr household
Rs 39100 cr for 09-10 for NREGA an increase of 140%
NREGA allocation increase at 144%
Reserve wage of RS 100 per day as an entitlement under NREGA
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:
Unique ID project as major step in this regard: it also marks a beginning of the private involvement in projects of national importance
RTI act an important step in ushering in accountability

Police and Security

Allocation of Rs 430 cr for police modernisation
Allocation of Rs. 2284 cr for strengthening of borders
1 lakh housing units for central paramilitary forces

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

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
Sri Lankan Tamils to get Rs 500 cr for the rehabilitation of IDPs in the island nation

Home » Indian Budget » Budget 2009-2010 » Important Budget Announcements

Important Budget Announcements