Union Budget 2010-11 Highlights
Finance Minister pranab Mukherjee has tabled Union Budget for 2010-11 in the Lok Sabha, which caused Sensex to cheer but opposition to walk out, said media reports.
Highlights of Budget Are:
1. The minister said there is a need to review stimulus measures, which were implemented to revive an economy hurt by the recent global slowdown. But low interest schemes for some sectors will be extended by a year.
2. Net market borrowing to be 3.45 trillion rupees for the next fiscal year.
3. To simplify foreign direct investment rules and reduce surcharge on companies to 7.5% from 10%.
4. Base excise tax on non-petroleum products raised to 10% from the current 8%; analysts were largely expecting a hike of 2%-4%.
5. The government aims to raise 250 billion rupees by selling stakes in state-run companies in this fiscal year through March; to sell more in the next fiscal year. The money will be used to bolster social sector funding, which will total 1.38 trillion rupees.
6. To spend 223 billion rupees on healthcare, 310.36 billion rupees on schools, 12.7 billion rupees on slum rehabilitation, 1.74 trillion rupees on infrastructure projects, 198.94 billion rupees on roads and 661 billion rupees on the rural sector.
7. To have competitive bidding for captive coal blocks and to set up a coal regulatory authority.
8. To allocate 51.30 billion rupees to the power sector, and to spend 10 billion rupees on renewable energy. Also, a fund will be set up to promote clean energy
9. Excise levy on gasoline, diesel raised by 1 rupee a liter.
10. Gold import tax to be increased to 300 rupees per 10 grams from 200 rupees.
11. To invest four billion rupees to boost farm output in east India; some farmers will get loans at a low interest rate of 5%.
12. To allocate 165 billion rupees for banks’ capitalization in an effort to ensure minimum Tier I capital Of 8%. Also, the central bank will consider giving licenses to more banks.
13. Panel to be formed to revise financial sector laws.
14. The government is confident of implementing a new direct tax code from April 2011. The code aims to consolidate under a single system laws–some of which were framed more than 50 years ago–relating to a number of taxes such as that on income and wealth.
15. Annual income up to 160,000 rupees exempted from tax. Government will lose 260 billion rupees in the next fiscal year due to changes in direct tax rules, but gain 465 billion rupees through indirect tax rate hikes. Also, it will gain 435 billion rupees from import tax increases.
16. To raise 360 billion rupees through the sale of third generation, or 3G, bandwidth in the next fiscal year.
17. A goods and services tax will be introduced by April 2011.
18. The government will, in six months’ time, present a status paper on its finances.