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Union Budget 2009-10 Updates


Analyst Viewpoints: UPA's Interim Budget focuses on rural economy
The government promised help for the rural sector and with the forthcoming elections, it tried to shield the economy from a global credit crunch and stem job losses . Acting Finance Minister Pranab Mukherjee presented his budget showing spending plans for the 2009-10 fiscal year from April to July, to take care of essential spending during and in the immediate aftermonth of general elections. The finance minister announced an extension of interest subsidies to debt-hit farmers. The spending plans are effectively a political manifesto of the Congress-led UPA Government. The government has already announced two stimulus packages in the face of faltering growth, which include extra spending of $4 billion. The central bank has cut its key lending rate by 350 basis points to 5.50% since October. The government has plans to borrow Rs 460 billion by the end of the fiscal year in March. This is to fund its stimulus measures and meet extra spending needs. The growth in Asia's third-largest economy will slip to 7.1% from 9% or more this fiscal year. There was a healthy 7.1% rate of GDP growth inspite of economic slowdown. The global slowdown is hurting key sectors like housing , exports and manufacturing. Analysts say anything under 6 % growth is perceived as a recession by many Indians, with investments curtailed and jobs losts. The Prime Minister's Economic Advisory Council expects growth to hold around similar levels in 2009 and 2010. In its five Budgets since 2004, the UPA Government has raised spending on health, education and rural employment but as per analysts view point the economy has suffered due to a lack of economic reforms.

Mixed reactions of Interim budget
Industry disappointed: India gave a thumbs-down to the interim budget 2009-10. It has been considered as a non-event and more of a political statement. Parsvnath Developers Chairman Pradeep Jain said there was nothing for any sector, forget about real estate. It was (more a) political statement than an interim budget. Even Kotak Mahindra Bank Managing Director Uday Kotak said, "Acting finance minister Pranab Mukherjee has stuck to what is good convention." CS ED and CFO S Mahalingam was very disappointed. He said that there were two stimulus packages given in the past couple of months and they were going to stay as they were. Hinduja Group CFO Prabal Banerjee said that the govt. did they could do best as it did not have much of a choice.

Pranab Mukherjee, Interim Finance Minister presents Interim Budget--Small budget : High Hopes

• Farmers to get loan upto 3 lakhs at 7%.
• Will show gratitude to UPA allies.
• Public sector turnover : Rs. 10,87,000 crores.
• 60.4 lakh houses constructed in a year.
• Farmer's debt waiver: Rs. 65300 cr till now.
• 55 loss making PSUs as against 72 when UPA took over.
• No tax changes in the Interim Budget.
• Defense spending up by 31%. Have allocated Rs 14,1703 cr in defense sector.
• Food, fertiliser, petroluem subsidies to go up.
• Rs 8,300 cr for mid-day meal scheme.
• Infrastructure spending to be 9% of GDP by 2014.
• Rs 1,200 crore for Total Sanitation Programme.
• Rs 40,000 crore relief extended through tax cuts.
• To spend Rs 9.53 lakh cr in plan & non-plan expenditure 13,100 cr for primary education in Sarv Shiksha Abhiyaan.
• Tax collections in 2008-09 to exceed that of 2007-08.
• Economy grew at 9% for straight 3rd year.
• Outlook for higher education rose by 900% in 11th five year plan.
• 98% of habitation covered by elementary education.
• Have taken steps to deepen and widen securities market.
• Need to accelerate policy reforms.
• Baharat Nirman programme gets rupees 40,900 crore.
• Pranab Mukherjee resumes Interim Budget speech.
• Parliament adjourned for 10 minutes.
• Agriculture outlook looks encouraging for 2009 if rainfall normal.
• Planned allocation for agriculture up by 300% between 2004 and 2009.
• Distortions in tax structure have been reduced .
• Tax rates must fall in times of slowdown.
• Record of FDI at 32.4 billion dollar in 2008-09.
• Foreign trade at 35.5 % of GDP in 2007-08.
• Custom duties rates steadily reduced.
• Govt may consider additional fiscal measures in budget .
• Gross domestic savings rate increased from 29.8% in 2003-04 to 30.7% in 2007-08.
• Tax to GDP ratio increased from 9.2% 2003-04 to 4.5% 2007-08.
• Foodgrain production increased by 10 million tonnes each year to all time high of 230 million tonnes in 2007-08.
• Dividend contribution from PSUs increased by 86%.
• PSU turnover up 84%.
• Pension scheme for widows, severely disabled launched.
• Indira Gandhi National Widow Pension Scheme for widows.
• Widows to get priority in ITI.
• Six new IIMs to be operational by 2010.
• 2 more IITs in MP, HP to start ops in '10.
• India cannot remain immune to global economic crisis.
• Educational loan scheme revised.
• Social security schemes need to be strengthened.
• Agricultural credit disbursement has gone up.
• UPA gave highest priority to rural development.
• Outlay on higher education increased 900%.
• The RIDA corpus was hiked from Rs 5,500 to Rs 14,000 cr.
• 60.12 lakh houses built under Indira Awaas Yojna.
• Industrial production fell by 2 per cent in December.
• Export growth rate in first 9 months of 2008-09 touched 17.1%.
• UPA gave highest priority to rural development.
• Social security schemes need to be strengthened.
• Agriculture plan hiked by Rs 3,000 crore.
• Need to consider additional fiscal measures.
• Global situation in 2009 may be worse.
• Policy reforms in financial sector needed.
• Exports in dollar terms rose 26.4% in last 4 yrs.
• Employment schemes need to be strengthened.
• GDP growth of 7.1% makes India second fastest growing economy.
• India has weathered the global crisis.
• Farm growth 3.7% in last 4 years.
• Govt successful in attracting foreign investors in infrastructure.
• UPA took prompt stimulus packages to check slowdown.
• Govt approved 37 infrastructure projects.
• Grain production encouraging for coming year.
• Per capita income growth rate at 7% per annum for 4 years.
• Fiscal, revenue deficit down, 6% of GDP.
• Consistent 9 pc growth for 3 years for the first time.
• Real heroes of India's success stories are farmers
• Annual growth rate of agriculture rose to 3.5 pc.
• Communication grew at the rate of 26 per cent
• Agriculture is the backbone of success
• Govt focused on farms, jobs, fiscal devolution
• Extension on excise duty relief
• Higher spending on infrastructure
• India gets ready for 12th Interim Budget
• This is the first Budget in the face of global meltdown
• The export sector has lost 10 lakh jobs
• Four lakh jobs lost in diamond industry alone
• April-Dec export growth is at 17 pc

Union Budget 2009-2010 (Interim)Pranab Mukherjee to present UPA's interim budget today (Monday 16th Feb. 2009)
External Affairs Minister Pranab Mukherjee, of the present United Progressive Alliance (UPA) government is going to present the interim budget today. He is holding the additional charge of the finance portfolio. The budget was approved by Prime Minister Manmohan Singh yesterday. As per convention, no major schemes, tax changes or concessions are usually announced in an interim budget. However this time to woo voters, the UPA government has to really present a budget that goes into the favor of the common man and the economy in face of the slowdown in the economy. There are several challenges that are facing the UPA government like stock market plunge, increasing unemployment, real estate blues, interest rates, and decreasing industrial output. And with general elections just approaching, the economic crisis will give the UPA enough reason to turn this interim budget into a very popular budget.