Highlights of interim budget for 2014-15 presented by P Chidambaram
Cars, two-wheelers and consumer durables like mobile phones to be cheaper, no major change in tax laws, blood banks to be exempt from service tax, fiscal deficit at 4.6 percent
Amid constant interruptions by some members, Finance Minister P. Chidambaram began presenting the interim budget for 2014-15 in the Lok Sabha Monday, expressing concerns confronting the economy today and how his government has navigated so far to address the challenges.
He said the targets for fiscal deficit for 2013-14, as also farm credit and investments were met despite challenges, even as some key concerns such as current account deficit and food inflation were contained.
Finance Minister P Chidambaram
"No one is speaking about downgrades now," said the finance minister, referring to the threats given by some global credit rating agencies to lower India's economic outlook that could have rendered junk status to Indian bonds and triggered a flight of capital.
"The economy is more stable today than it was two years ago," said the minister while presenting what was India's 83rd national budget and the 9th such personal exercise for Chidambaram.
The main budget for the financial year 2014-15 will be presented by the new government that will come to power after the general elections, the schedule for which is likely to be announced by the Election Commission soon.
Giving specific numbers, Chidambaram said fiscal deficit for 2013-14 was contained at 4.6 percent of GDP, against the target of 4.8 percent, and the current account deficit was lower at $45 billion, compared with $88 billion for the previous fiscal.
The finance minister also said the inflation has come down to 5.05 percent, against 7.3 percent when the budget was presented last year. Core inflation, which excludes items that see volatility in prices, was also down at 3 percent from 4.2 percent, he added.
The following are the consolidated highlights of the interim budget for 2014-15 presented in the Lok Sabha by Finance Minister P. Chiddambaram on Monday:
* No change in income tax rates
* Rs.3,370 crore transferred to 2.1 crore LPG beneficiaries
* 57 crore Aadhaar cards issued so far
* Allocation of Rs.115,000 crore for food subsidy
* Rs.65,000 crore for fuel subsidies
* Defence expenditure enhanced 10 percent to Rs.224,000 crore
* One rank one pension demand accepted; to be implemented with Rs.500 crore in 2014-15
* Excise on small cars/two-wheelers lowered to 8 percent, on SUVs to 24 percent, on large cars to 20 percent
* Excise duty on mobile handsets to be restructured
* Plan expenditure in 2014-15 at Rs.555,322 crore; non-plan expenditure at Rs.12,07,892 crore.
* WPI inflation at 5.05 percent in January
* Core inflation at 3 percent
* Fiscal deficit at 4.6 percent in 2013-14, to be at 4.1 percent in 2014-15
* Current account deficit at $45 billion
* Growth estimated at 4.9 percent in 2013-14
* India's economy at 11th globally; aiming to be third
* More than 41 lakh women's self-help groups provided credit of Rs 36,893 crore by December 2013
* Major relief for education loan borrowers, 900,000 student borrowers to benefit
* Modernization plan of over Rs.11,000 crore for Central Armed Police Forces.
* Ministry-wise allocations for flagship schemes: Rs.82,200 crore rural development, Rs.67,398 crore for human resource development, Rs.33,725 crore for health and family welfare, Rs.21,000 crore for women and child development, Rs.15,260 crore drinking water and sanitation
* Government succeeds in obtaining information in 67 cases of illegal offshore accounts; prosecution launched in 17 cases
* Capital infusion of Rs.11,200 crore in public sector banks
* Public sector general insurance companies opened 1,849 offices in towns with population of 10,000 or more in 2013-14
* Lending to minority communities soars to Rs.66,500 crore in 2013-14; minorities have 43,52,000 accounts in areas where there is concentration of minorities; loans to minorities stood at Rs.211,451 crore at the end of December 2013
* Additional assistance of Rs.1,200 crore to northeastern states, Himachal Pradesh and Uttarakhand
* Allocation of Rs.48,638 crore for Scheduled Castes sub-plan, Rs.30,726 crore for tribal sub-plan
* To promote entrepreneurship among the Scheduled Castes and to provide concessional finance to them, IFCI to set-up venture capital fund of Rs.200 crore, which can be supplemented every year
* 100 million jobs to be created in a decade
* During 2013-14, 68,043 youth enrolled and 77,710 completed their training under National Skill Certification and Monetary Reward Scheme
* Target of agriculture credit of Rs.800,000 crore for 2014-15
* Steps to deepen Indian financial market: To liberalise the rupee-denominated corporate bond market; to deepen and strengthen the currency derivatives market to enable Indian companies to fully hedge against foreign currency risks; to create one record for all financial assets of every individual; to enable smoother clearing and settlement for international investors looking to invest in Indian bonds; Forward Contracts (Regulation) Act (FCRA) be amended to strengthen the regulatory framework of the commodity derivatives market.
* No policy paralysis
* Budgetary support to railways at Rs.29,000 crore in 2014-15
* Central assistance of Rs.338,562 crore in 2014-15
* Over 29,000 MW of power capacity added during 2013-14
* Construction underway for 50,000MW of conventional power
* Four solar generation plants of 500 MW each to be constructed in 2014-15
* Direct Taxes Code (DTC) to be posted on finance ministry website for public discussion
* Duties cut to revive economy
* All taxes on exports to be waived for manufacturing sector
* Exports estimated at $326 billion in current fiscal
* Two projects sanctioned under Nirbhaya Fund; original Rs.1,000 crore made non-lapsable; another Rs.1,000 crore granted
* Blood banks exempted from service tax
* Research funding organisation to be created to promote scientific R&D
* PPP model to be increasingly viewed
* Community radio to be promoted with Rs.100 crore
* 19 oil blocks allocated in 2013-14
* Seven new airports under construction
* Food grain production in 2013-14 estimated at 263 million tonnes
* Hope to add $15 billion to forex reserves
* Challenges we face common to emerging economies
* India not unaffected by events in global economy