Promising to halve poverty by 2014 and add 12 million jobs each year, Finance Minister Pranab Mukherjee presented general budget for this fiscal that hikes income tax exemption limit and steps up allocations for welfare schemes and infrastructure, while assuring high growth for the $1.2 trillion economy once again.
Promising to halve poverty by 2014 and add 12 million jobs each year, Finance Minister Pranab Mukherjee presented general budget for this fiscal that hikes income tax exemption limit and steps up allocations for welfare schemes and infrastructure, while assuring high growth for the $1.2 trillion economy once again.
The income tax exemption limit for senior citizens was sought to be hiked by Rs 15,000, while that for women and others was stepped by Rs 10,000. The 10 per cent surcharge on personal income tax also sought to be removed in Mukherjee's budget presented in the Lok Sabha.
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New incentives to farmers, 45 per cent jump in funds for Bharat Nirman, India's flagship rural reconstruction programme, higher spending on urban development, fresh impetus on energy security and revival of the divestment programme were among the highlights of the 100-minute Mukherjee's budget.
He also announced that the national food security act will be enacted soon promising 25 kg of rice or wheat per month to the poor at Rs 3 per kg, while announcing a new health insurance scheme for those below the poverty line.
For India Inc, the corporate tax rate was kept unchanged, even as the finance minister sought to reduce the burden on industry by abolishing the commodities transaction tax, but hiked the minimum alternate tax to 15 per cent of book profits.
Mukherjee also promised to scrap the fringe benefit tax to please corporates, introduce a pan-India goods and services tax from April next year and gave 100 per cent tax deductions to political donations.
Dressed in a smart white bandgala suit, the 73-year-old politician - who had presented his last budget as finance minister in the government of prime minister Indira Gandhi 25 years ago - said the United Progressive Alliance (UPA) government would push forward an agenda that will ensure 12 million new jobs each year and reduce poverty by half by 2014.
"The government also recognises the challenges," he said, referring to the global slowdown and the decline in India's high growth rate in the past year to 6.7 per cent from over 9 per cent in the preceding three years.
"The first challenge is to bring back the GDP (gross domestic product) growth rate to over 9 per cent per annum," he said, setting the tone of what is his fourth career budget watched by Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi.
He said the other challenges included better governance and to ensure that the fruits of development reached across regions to touch the lives of every citizen - the 'aam admi' (the common man) as he called them.
Mukherjee said infrastructure would also be a priority, especially in areas like roads, highways and energy. "I, on my part, will ensure that sufficient funds are made available to these sectors."
The finance minister also said the unique identification plan, approved by the previous UPA government will be operational in 12-18 months and the process begin to hand over biometric smart cards to 1.17 billion citizens.
Mukherjee said with industry still under the grip of global recession, the finance minister said he was providing additional incentives in the form of both direct and indirect taxes.
He enhanced the customs duty on items like set-top boxes, LCD televisions and premium textile goods to encourage domestic production and value addition.
Budget rises from Rs 193 cr to Rs 10 lakh cr
India's fiscal budget has risen from Rs 193 crore to over Rs 10 lakh crore in the 63 years since Independence of the country in 1947, Finance Minister Pranab Mukherjee said while presenting the budget for 2009-10 in the Lok Sabha on Monday.
"Madam speaker, I am happy to announce that for the first time, the budget estimates have crossed Rs 10 lakh crore. From Rs 193 crore in the first budget, the estimates for the current financial year are Rs 10 lakh, 20,838 crore," Mukherjee said.
Mukherjee had presented his previous budget as finance minister in the government of prime minister Indira Gandhi 25 years ago.
Budget allocates Rs 39,000 cr for rural jobs scheme
The government hiked the allocation for its flagship rural job scheme by 144 per cent to Rs 39,000 crore.
"I am allocating Rs 39,000 crore for NREGA (National Rural Employment Guarantee Act). This is a hike of 144 per cent," Finance Minster Pranab Mukherjee said while presenting the budget for fiscal 2009-10 in the Lok Sabha.
"NREGA is a magnificent success. The government is committed to providing a wage of Rs 100 a day to rural households in convergence with other schemes for rural areas. One hundred and 15 pilot districts have been identified for these convergence schemes. The details will be given by the minister for rural development," Mukherjee added.
The finance minister said the government would soon publicise a draft food security (guarantee) bill and seek comments from everybody before finalising the bill. In its election manifesto earlier this year, the Congress had promised 25 kg of rice or wheat a month at Rs 3 per kg to families below the poverty line.
Simple tax regime in four years promised
Finance Minister Pranab Mukherjee promised to revamp the country's tax structure, with a simple and exemption-free regime in four years.
This is in line with the government's stated agenda of a new income tax code to simplify the tax structure that is replete with exemptions and complex provisions.
Tax reforms to be expedited: Mukherjee
A new direct tax code will be introduced in 45 days and bring changes in the indirect tax structures, Finance Minister Pranab Mukherjee said.
Reiterating his commitment to expedite tax reforms, Mukherjee also said he would aim to introduce the goods and services tax by the initial deadline of April 10, 2010.
Fringe benefit tax abolished
Bowing to the long-standing demand of India Inc, Finance Minister Pranab Mukherjee has abolished the fringe benefit tax and commodity transaction tax.
However, Minimum Allocation Tax (MAT) on book profits has been increased from 10 percent to 15 percent, but with a provision of carrying forward the tax credit on MAT to 10 years from the current seven years.
Govt to hold majority stake in state-owned banks
The government will continue to hold at least 51 per cent stake in the banks and insurance companies it owns, Finance Minister Pranab Mukherjee said.
However, citing the average public float in listed entities - which is less than 15 per cent - the finance minister said the government proposed to increase the non-promoter holding in listed companies.
Urban development allocation increased 87 pc
The allocation for the Jawaharlal Nehru National Urban Renewal Mission has been increased by 87 per cent to Rs 12,887 crore, Finance Minister Pranab Mukherjee said.
Additionally, the Indira Awas Yojna, a housing programme for the poor, has been allocated Rs 2,000 crore, while a Rs 2,000 crore special fund has been set up to finance rural housing projects.
Mukherjee also announced a Rs 3,973 crore allocation for urban poor.
More money to clean rivers, lakes
The government will raise the allocation for cleaning India's rivers and lakes to Rs 562 crore ($110 million) in fiscal 2009-10 from Rs 335 crore last fiscal, Finance Minister Pranab Mukherjee announced.
Mentioning that the government had unveiled its National Action Plan on Climate Change last year and that eight national missions under it were being finalised, Mukherjee committed that the government would provide necessary funds for all the missions.
The annual economic survey had estimated that India is now spending over 2.6 per cent of its GDP in having to adapt to climate change, which is affecting farm output, making droughts, storms and floods more frequent and more severe, and raising the sea level.
The minister also announced special allocations for the Indian Council for Foresty Research and Education, the Botanical Survey of India and the Zoological Survey of India.
Pensions enhanced for soldiers, junior commissioned officers
The government announced enhanced pensions for soldiers and junior commissioned officers that will entail additional expenditure of Rs 2,100 crore per year.
"The decision will benefit 12 lakh pensioners. The allowances for the war wounded and disabled is also being liberalised," Finance Minister Pranab Mukherjee said.
Mega industrial clusters be set up
The government will set up mega industrial clusters to support textile and power industries, Finance Minister Pranab Mukherjee said.
"We will set up handloom mega clusters in Tamil Nadu and a power mega cluster in Rajasthan," Mukherjee said.
Big jump in money for Commonwealth Games
The government has increased the allocation for the 2010 Commonwealth Games to Rs 3,472 crore from Rs 2,112 crore in the interim budget, Finance Minister Pranab Mukherjee announced.
1,000 villages to get Rs 100 crore
The government will allocate Rs 100 crore for about 1,000 villages with higher population of scheduled castes and scheduled tribes, Finance Minister Pranab Mukherjee said while presenting the budget for 2009-10 in parliament.
The scheme, currently on a pilot basis, will be extended in the coming years, he said.
India extends tax holiday for natural gas production
In a bid to give a fillip to the current round of auction of hydrocarbon assets, Finance Minister Pranab Mukherjee Monday extended the tax exemption on profits in the natural gas sector.
The ministry of petroleum and natural gas has been seeking tax holiday to the natural gas sector since last year, when the 2008 auction deadline had been postponed many times due to confusion over this issue.
The government now expects that the tax exemption will trigger interest in the 2009 round of auction of 70 hydrocarbon exploration blocks. The closing date for submissions of bids is August 10.
Lawyers to pay service tax from now
Finance Minister Pranab Mukherjee brought lawyers under the ambit of service tax in the Union Budget for 2009-10.
"I propose to bring certain legal services under the ambit of service tax," said Mukherjee.
Highlights of Union Budget for 2009-10
* Agriculture debt waiver extended by six months
* Outlay for national rural health mission increased by Rs 2,057 crore from the Rs 12,070 crore provided in the interim budget
* Allocation towards National Rural Employment Guarantee Act increased by Rs 39,100 crore
* Allocation for Bharat Nirman scheme increased by 45 per cent
* Rs 20 billion for rural housing
* Rural electrification scheme to get Rs 7,000 crore more
* Tax department to work on early introduction of Saral 2 forms
* Stimulus for print media extended from June 13 to December 31
* Rs 1,000 crore to accelerate irrigation projects
* Agriculture development fund increased from Rs 2.87 lakh crore to Rs 3.25 lakh crore
* Market development assistance scheme for exporters increased by 148 per cent to Rs 124 crore
* Pre-shipment interest subvention set at two per cent for textile exporters
* Will make sufficient funds for infrastructure development
* Allocation for national highways development stepped up by 23 per cent
* Allocation for urban poor schemes to be raised to Rs 39,730 crore in 2009-10
* LNG infrastructure to be expanded
* Allocation for Jawaharlal Nehru Urban Renewal Mission raised by 87 per cent to Rs 12,887 crore
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