Friday, February 29, 2008

Chidambaram spells out vision India 2009

29:Feb:2008: Following are the highlights of the 2008-09 General Budget presented by Finance Minister P.Chidambaram in Parliament:

Taxation: Capital Gains Tax hiked
— No change in Corporate Tax
— No change in surcharge
— Short term Capital Gains Tax hiked 15%
— Post office time deposit under 80C
— Medical Insurance premium for parents liable for exemption under 80B of IT Act
— 2-3-4 star hotels to get 5 year tax holiday
— Non filter cigarettes to have more tax
— 55% of GDP is from services
— Asset management services to ULIP
— Services provided by stock exchanges, Customized software to come under service tax
— Banking cash transactions to be withdrawn from April 1 2007
— Central sales tax to be reduced to 2% from 3%

Personal Taxation: Slab Raised
— Tax exemption limit raised to 1.5 lakhs
— Tax slab above 5 lakhs is 30%
— Tax slab between 3-5 lakhs 20%
— Tax slab between 1.5 to 3 lakhs is 10%
— Income Tax exemption for women (at 1.8 lakhs)
— Tax relief for senior citizens

Duty cuts
— Coconut drinks
— Water purification devices
— Breakfast cereals
— Wireless data cards
— Refrigeration equipment
— Small cars
— 2-3 wheelers to attract lesser excise at 12%
— Excise duty on pharma halved to 8%

Pan must for financial market deals
— Higher growth rate, changes in attitude and stricter compliance helped tax collection
— Smart card based delivery system for public distribution system to be taken up on pilot basis
— Pan to be made compulsory for all financial market transactions
— Defence allocation up to 1.05 lakh crore
— Rural housing loans at 4% interest to be made available
— Sixth pay commission for Govt employees to submit report by March 2008
— Rs 75 to ICCR to promote Indian art, movies
— Completion ratio is 96% on the golden quadrangular national highway project
— 3.5 billion to 8 billion expected during next round of bidding for 53 oil blocks
— 17 lakh families of weavers to be included under insurance schemes
— Steps to create a transparent credit trading system
— Skill development programme to be launched with a non profit corporation being set up with Rs 15,000 crore capital

Growth Story:One more year before eliminating Revenue Deficit
— Average growth rate 8.8%
— 10.7% and 9.4% growth for services and manufacturing respectively
— Agriculture growth rate estimated at 2.6%
— Capital inflows in excess of current account deficit
— Revenue deficit is at 1.4%
— Fiscal deficit pegged at 3.1% as against 3.2% estimated last year

Agri pepped up: 60,000 crore loans to farmers waived off
— Record high: Foodgrain output at 219.32 million tonnes
— Agri credit doubled in 2 yrs cumulating to 2.40 lakh crore by end of this fiscal year
— Credit target for Agri: Rs 2,80,000 by 2009
— Additional 4 lakh hectare to be brought under drip irrigation programme
— Irrigation and Water Resources Finance Corporation to be set up
— Coconut, cashew and pepper to be revived as cash crops
— 250 districts to have fully fitted mobile soil testing facility by March 2009
— Crop insurance scheme to be extended to more cash crop
— Complete waiver of all loans for marginal and small farmers
— For other farmers there would be a one time waiver

Education: IITs for Bihar, Rajasthan, Andhra Pradesh
— Allocation to education up by 20%
— Bihar, Rajasthan and Andhra Pradesh to get IITs
— New scholarships for scientific study and research
— IT Ministry gets Rs 100 crore to set up knowledge network
— 16 Central Universities to be established
— All national institutions to be networked on knowledge network

Health
— Health allocation increased by 15%

Employment
— Rs 30,000 cover for unorganised sector labourers
— Rs 16,000 crore allocated for the employment sector
— Rs 16,447 crore allocated to the North eastern region for development
— More minority recruitment for Central para military forces

Banking, Insurance
— 256 Public sector bank branches started, 288 more to come up by March’08

Public Sector Units: Over 16000 crore equity support by 2009
— 16,436 crore as equity support to Central PSUs in 2008-09
— More public sector units to be divested of govt. stakes

Manufacturing: Growth in double digits
— Target growth rate to get in double digits

Power
— Over 10,000 mw power would be added to the grid by March 2008

Child care and Welfare
— Mid-day meal extended to upper primary classes
— National program for elderly Rs 800 crore, Geriatric medical facilities to be set up on eleventh plan

Broad vision
— Monitor foreign fund inflows
— Boost for Education, Health
— 38,286 crore increased in Budget allocation to plan size
— 31,280 crore set aside for Bharat Nirman
— 11.4 crore children covered in mid-day meal system

Quotable quotes
— Budget 2008-09 is about raising our sights, doing better and doing more

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