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Union Finance Minister Arun Jaitley is all set to present Budget 2018 on February 1. While Budget expectations and Budget wishlist have started coming from all quarters and sectors, what the finance minister will announce in his Budget speech is known only to a select few members of the Budget-making team of the finance ministry.
There is a view that Jaitley would deliver a populist Budget this time, given that it is the last full Budget of the Narendra Modi-led central government in its present term. However, this has been a fiscally difficult year for the government, and prudent economics would not allow him to give freebies.
There have been reports that Jaitley might even consider increasing the personal income tax exemption limit to benefit the middle class salaried people, who have been impacted lately by rising retail inflaion.
Business Standard takes a look at the past Budgets and the key highlights that took the centre stage and became a talking point.
With a view to reward companies who invest in future growth and plough back their profits for fresh investments, the Budget proposes to levy a tax of 10 per cent on distributed profits. This tax will be on the company and will not be passed on to the share holder. The Tax Deduction at Source on Government securities gilts has been abolished and gilts will now qualify for a higher deduction limit of Rs 15,000 under the IT Act. A tax holiday has been given for investments in the telecommunications sector and the rate of tax on interest income of lending institutions has been reduced to 2 per cent.
Plan allocation to Ministry of Agriculture, increased by 58 per cent. Rs 16.27 billion for Rural Water Supply to benefit one lakh habitations. Allocation for Watershed Development Prorgramme increased by 31 per cent. Allocation for Accelerated Irrigation Benefit Prorgramme increased by 58 per cent.Marginal increase in the price of urea to protect long term soil health by restoring the balance in the use of nitrogenous, phosphatic and potassic fertilisers. Exemption limit for excise enhanced from Rs 3 million to 5 million. Greater access to bank credit for working capital (20 per cent of annual turnover doubled from Rs 20 million to Rs 40 million). Measures to moderate the cost of bank credit to SSIs. SIDBI to have greater role in SSI credit provision. Overhaul of excise administration to cut down "Inspector Raj".
Target of 2 million additional houses, 1.3 million in rural and 700,000 in urban areas. Rs 16 billion for Indira Awas Yojana. Rs 1 billion investment in HUDCO. Urban Land Ceiling & Regulation Act to be repealed to enhance supply of land. Plan Outlay for Energy Transport and Communications increased by 35 per cent — from Rs 452 billion to Rs 611 billion. Government guarantees to convert outstanding dues of about Rs 100 billion from SEBs to NTPC, Coal India, etc. into investible funds for financing projects.
The Union Budget 1999-00 was read by Finance Minister Yashwant Sinha. Key features of the budget were:
Watershed Development Fund, with Central Government’s matching assistance, with NABARD to cover 100 priority districts within 3 years. Enhanced Central contribution under the Accelerated Irrigation Benefit Programme to States, which rationalise water rates to cover at least Operations and Maintenance costs. One time management subsidy and recurring assistance over an initial period of 3 years to all registered Water Users Associations, linked to incremental water rate collection. A new credit-linked capital subsidy scheme for construction of cold storages and godowns to create additional cold storage capacity of 1.2 million tonnes and to rehabilitate and modernise 800,000 tonnes of existing units. Also proposed to create 450,000 tonnes of onion storage capacity.
Corpus of Rural Infrastructure Development Fund V enhanced from Rs 30 billion to Rs 35 billion. The repayment period is also being extended from five to seven years. Kisan Credit Card Scheme extended to cover two million farmers in 1999-2000. 600,000 cards already issued. Regional Rural Banks to be recapitalised to the tune of Rs 1.68 billion. NABARD and SIDBI to redouble their efforts for flow of funds to micro enterprises and ensure coverage of at least 50,000 Self-Help Groups during the course of the year. Lending by banks for food and agro processing industries will be treated as priority sector lending.
Jawahar Rozgar Yojana to be modified as "Gram Samridhi Yojana" to ensure that all funds are placed at the disposal of Gram Panchayats for creation of rural infrastructure. "SWARAN JAYANTI GRAM SWAROZGAR YOJANA" with integrated self-employment programmes for the rural poor. Employment Assurance Scheme will give special priority to areas with endemic unemployment and greater role for Zila Parishads and other elected representatives.
Major overhaul of Excise with present 11 rates going to only 3, with central rate of 16 per cent, merit rate of 8 per cent and demerit rate of 24 per cent. Restoration of 100 per cent MODVAT availment. Major direct tax initiative to facilitate industry restructuring through mergers and amalgamations. Boost to Capital Goods Industry through removal of customs duty anomaly on Steel. New Competition Law promised to replace Monopolies and Trade Restrictive Practices Act. Technology Upgradation Fund scheme for Textile industry extended to Spinning industry. To level playing field for domestic industry, minimum 5 per cent customs duty introduced on some products and principle of countervailing duties extended in capital project sectors.
The Union Budget 2000-01 was read by Finance Minister Yashwant Sinha. Key features of the budget were:
Strengthening foundations of growth of rural economy. Modernising traditional industries like textiles, leather, agro-processing and the Small Scale Industry Sector. Harnessing the revolutionary potential of knowledge-based industries like infotech, biotechnology and pharmaceuticals. Mounting sustained assault on infrastructure bottlenecks in power, roads, telecom, railways, ports and airways. High priority to Human Resource Development through education, health and other social services. Strengthening the external sector through high export growth, high foreign investment and prudent debt management. Establishing a credible framework for fiscal discipline.
Rural Infrastructure Development Fund VI enhanced from Rs 35 billion to Rs 45 billion and interest rates reduced by half per cent. Credit flow to agriculture through institutional channels to increase to Rs 515 billion crore in the coming year as compared to the estimated Rs 418 billion this year. Major thrust to Micro-Finance for alleviating poverty. NABARD/SIDBI to cover one lakh Self-Help Groups. A Micro Finance Development Fund of Rs 1 billion to be created in NABARD.
2.5 million dwelling units to be provided in rural areas. Indira Awas Yojana to provide more than 1.2 million houses for the people below poverty line. Rs 15.01 billion provide for this. Assistance to construct 100,000 houses for families below annual income of Rs 32,000. National Housing Bank to provide refinance for construction of 150,000 lakh houses under Golden Jubilee Rural Housing Finance Scheme.
Government not to close any Public Sector Bank. Weak banks to be restructured. Banks to be allowed to raise capital from the market to expand operations and for meeting capital adequacy norms. More Debt Recovery Tribunals and Debt Recovery Appellate Tribunals to be set up. A new Deposit Insurance Bill to replace the existing Deposit Insurance and Credit Guarantee Act of 1961.
Tax regime liberalized and Securities and Exchange Board of India (SEBI) to be made single-point nodal agency for guidelines. Indian firms to get more flexibility for undertaking capital account transactions, especially for acquisitions for business abroad in knowledge based sector. Access of Indian companies to foreign portfolio investment made more flexible. Automatic route for overseas investment by Indian corporates liberalised.
The Union Budget 2000-01 was read by Finance Minister Yashwant Sinha. Key features of the budget were:
Accelerated reforms in the agricultural sector - food economy and rural development programmes targeted. Intensification of infrastructure investment, continued reforms in the financial sector and capital markets, deepening of structural reforms - dismantling controls constraining economic activity. Human development through better educational opportunities and social security. Reduction in non-productive expenditure and rationalisation of subsidies. Acceleration of the privatisation process and restructuring of public enterprises Widening of the tax base and toning up the tax administration.
Corpus of NABARD’s RIDF VII increased from Rs 45 billion to Rs 50 billion next year and interest charged reduced from 11.5 per cent to 10.5 per cent. Kisan Credit Cards to all eligible agricultural farmers within the next 3 years. (1.1 million cards issued since 1998-99). KCC holders to get personal insurance package to cover them against accidental death or permanent disability on subsidised premia. NABARD to link 1 lakh additional Self-Help Groups during 2001-02, which would help in providing access to credit to additional 20-lakh families. Share-croppers and tenant farmers to also become eligible.
PMGY extended to cover rural electrification also. Total rural electrification in the next 6 years. Enhanced REC credit support to SEBs for speedy electrification of dalit bastis, scheduled tribe households and other weaker sections of society. Rs 75 billion earmarked from RIDF for rural electrification.
7 more Debt Recovery Tribunals to be set up during 2001-02. Legislation to facilitate foreclosure and enforcement of securities in cases of default to be introduced.
Banking Services Recruitment Boards to be abolished by July 31, 2001 or earlier. Banks to do all future recruitment themselves.
All requirements of recruitment will be scrutinized to ensure that fresh recruitment is limited to 1 per cent of total civilian staff strength. Postal rates will be revised moderately to contain the rising postal deficit. The Surplus Pool will be equipped to re-deploy and retrain surplus staff. Employees in the surplus Pool will also be offered an attractive VRS package. Standard licence fee (rent) on government accommodation being enhanced with effect from April 1, 2001.
The Union Budget 2002-03 was read by Finance Minister Yashwant Sinha. Key features of the budget were:
Continue the emphasis on agriculture and food economy reforms. Enhance public and private investment in infrastructure. Strengthen the financial sector and capital markets. Deepen structural reforms and regenerate industrial growth. Provide social security to the poor. Consolidate tax reforms and continue fiscal adjustment at both the Central and State levels.
Amendment of the Milk and Milk Products Control Order (MMPO) to remove restrictions on new milk processing capacity, while continuing to regulate health and safety conditions. Removal of small scale industry reservations related to various agricultural equipment items. Decanalisation of the export of agricultural commodities and phasing out of remaining export controls. Expansion of futures and forward trading to cover all agricultural commodities.
APDP being redesigned as the Accelerated Power Development and Reform Programme (APDRP), with an enhanced plan allocation of Rs 35 billion for 2002-03. The focus of reform has shifted from generation to transmission and distribution. A high level monitoring group will oversee the progress of this programme. Allocation for this programme will be augmented by loans on concessional terms from the Power Finance Corporation (PFC).
Government Securities Bill to replace the old Public Debt Act 1949 to be introduced. Legislative changes will be proposed in the SEBI Act 1992 for investor protection, and to enhance the effectiveness of SEBI as the capital market regulator. Further legislative changes to be proposed during the year in the UTI Act to put in place other needed reform measures.
The Union Budget 2003-04 was read by Finance Minister Jaswant Singh. Key features of the budget were:
Standard deduction of 40 per cent or Rs 30,000 whichever is less for salary till Rs 500,000 above Rs 500,000, 20,000. Under a new health insurance scheme, an individual would have to pay one rupee per day as premium for 365 days, Rs 1.50 per day for a family of five and Rs two per day for a family of seven including dependents and will be eligible for a benefit of Rs 30,000 in case of hospitalisation. In the event of death, the family would get Rs 25,000. Income tax and corporate tax rates remain same. Five per cent surcharge levied last year for country's security halved to 2.5 per cent, while for individuals there will be no surcharge.
Individuals with income of over Rs 850,000 to pay 10 per cent surcharge towards security of the country.
Overseas investment limit for corporates hiked to 100 per cent of net worth. FDI in private banks increased from 49 per cent to 74 per cent, voting right limitations to be amended. Rs 1.50 additional excise duty per litre to be imposed on light speed diesel.
Fiscal deficit is estimated at 5.6 per cent of GDP at Rs 1.53 trillion for the next fiscal. Revenue shortfall of Rs 87.88 billion. Expenditure budget for 03-04 put at Rs 4.38 trillion. Revenue estimate for 03-04 at Rs 2.53 trillion.
Domestic companies to pay 12.5 per cent dividend tax. Central govt to compensate states 100 per cent in year one after VAT introduction, 75 per cent in year two and 50 per cent in year three. Excise on garments down to 10 per cent from 12 per cent. Exemption on capital gains for 1 year on buybacks. Exchanges not to pay any capital gains tax on corporatisation. Tax holiday for R&D companies. It is proposed to exempt equity based schemes from dividend and distribution tax for one year.
The Union Budget 2004-05 was read by Finance Minister P Chidambaram. Key features of the budget were:
I-T exemption limit raised to Rs 100,000. 14 million tax assessees to go out of the net as a result. No change in tax slabs. Contributions to Contributory Pension Scheme exempted form tax. Terminal Tax to be paid at the time of receipt. Loopholes in gift tax exemption to be plugged. Encouragement to the automobile sector. Industry to be provided 150 per cent exemption for in-house research and development.
Reduction in customs duty in non-alloy steel from 15 per cent to ten per cent, excise duty raised from eight per cent to 12 per cent. Number of concessions on excise duty for agriculture. Tractors will be fully exempted from excise duty against existing 16 per cent. Dairy machinery also fully exempted. Spades and shovels also fully exempted. Health sector to be provided a number of concessions. In the health sector, braille, braille typewriters, braille computers fully exempted from customs duties. All ambulances to be exempt from customs duty. Diagnostic kits for all types of epidemics exempted from Income-Tax. Proposed to levy excise duty on contact lens in a bid to promote CENTVAT. Complete exemption of excise duty on crutches and wheel chairs. All types of hepatitis kits will be exempt from duty. For matches made in the mechanised sector excise duty has been raised to 16 per cent without centvat rates from eight per cent with CENTVAT rates.
In addition to gross budgetary support of Rs 1.31 trillion provided in the interim budget, the Budget has decided to allocate Rs 30 billion. Planning Commission will reorient its approach to planned development. Government proposes to wipe out revenue deficit by 2007/08 against 2008/09 target set in the Fiscal Responsibility and Budget Management Act. No change in existing interest rates on small savings. But senior citizens to get a new savings scheme with a rate of 9 per cent. The government would draw a five-year road map for implementing the Common Minimum Programme to achieve growth and equity. Government would ensure that a child remains in school for at least eight years and does not go hungry.
The Union Budget 2005-06 was read by Finance Minister P Chidambaram. Key features of the budget were:
Income upto Rs 100,000 per annum exempted from tax. Income between Rs 100,000-150,000 to be taxed at 10 per cent. Rs 150,000-250,000 income to be taxed at 20 per cent.
Income above Rs 250,000 to be taxed at 30 per cnet. Exemption level for women at Rs 125,000. Exemption level for senior citizens at Rs 150,000. Consolidated limit of Rs 100,000 of saving to be deducted from income before calculating tax. Standard deduction removed from tax structure. 0.01 per cent tax on withdrawal of over Rs 10,000 in cash from banks on a single days.
Govt proposes 50 paise per litre cess on petrol and diesel to fund highways. Defence allocation to be increased to Rs 830 billion next fiscal. Customs duty on crude petroleum to be cut to 5 per cent from 10 per cent. LPG for domestic consumption and subsidised kerosene not to attract customs and excise duties. Customs duty on motor spirit, high speed diesel and other petroleum products to be lowered to 10 per cent from 15-20 per cent. Specific rate on cigarettes to be increased by about 20 per cent. Other tobacco products, including gutka, chewing tobacco, saunf and pan masala to attract 10 per cent surcharge on ad valorem basis.
Fiscal deficit pegged at Rs 1.51 trillion or 4.3 per cent of GDP during 2005-06. Revenue deficit proposed to be Rs 953 billion or 2.7 per cent of GDP for next fiscal.
Plan expenditure is estimated at Rs 1.72 trillion for 2005-06. Of plan expenditure, Rs 290 billion to be raised as loans by state governments directly. Non-plan expenditure at Rs 3.7 billion for next fiscal.
The Union Budget 2006-07 was read by Finance Minister P Chidambaram. Key features of the budget were:
In the backdrop of C Rangarajan Committee report, Government urges for consensus in Parliament on subsidies in fertiliser, petrol and food. The allocation to the states from the central pool of revenue as per the 12th Finance Commission has been stepped up to Rs 1037.10 billion in 2006-07 as against Rs 944.02 billion in 2005-06. The compensation provision for loss of revenue to states with the implementation of VAT has been put at Rs 30 billion. Revenue deficit to be 2.1 per cent of GDP. Fiscal deficit 3.8 per cent of GDP im 2006-07. After 20 years gross fiscal deficit is less that gross budgetary deficit. Plan expenditure has gone up to 30.6 per cent.
The defence budget raised to Rs 890 billion in 2006-07 from Rs 830 billion in the current year. Of this Rs 374.58 billion would be capital expenditure. Rs 1 billion special grant for Punjab Agricultural University as a centre of excellence for its commendable work in agricutural research. 500 ITIs to be upgraded in five years. Work has already started in 100 ITIs and would be taken up in the remaining 400 institutes soon. Rs 970 million allocated in 2006-07. Special assistance of Rs 8.48 billion for Jammu and Kashmir for its reconstruction fund, including Rs 2.30 billion for Baglihar project. This will be in addition to 2006-07 state plan of Rs 23 billion. Rs 100 million allocated for preparatory work for celebrating the 150th anniversary of the First War of Independence of 1857 in a befitting manner.
An Investors Protection Fund will be set up and funded by fines and penalties to safeguard the interests of retail investors. FII investment limit in stock markets will be raised from $1.75 billion to $2 billion to deepen, strengthen and broaden the market. Raise in the aggregate investment of overseas investors from $1 billion to $2 billion is propsed. An investment protection fund under the aegis of SEBI would be set up. Rs 500 million for Mumbai, Kolkata, Chennai varsities. Eighty two power projects are in various stages of implementation in the country to overcome power shortage. This when completed in 1 to 3 years will generate 33,000 mws of power in PSUs and 6500 mws in private sector. Of this, 15,000 mw of power generation is to be installed by March 2007. Five mega power projects of Rs 40 billion each is to be set up for which clearance is to be given by March 31, 2006. Of this, one each will come in Chhattisgarh and MP. The remaining three will be in coastal areas of Maharashtra, Karnataka and Gujarat.
The Union Budget 2007-08 was read by Finance Minister P Chidambaram. Key features of the budget were:
Deduction in respect of medical insurance under Section 80 (D) increased to Rs 15,000 and Rs 20,000 for senior citizens. Exemption limit for women was increased to Rs 145,000 and for senior citizens to Rs 195,000. Dividend distribution tax raised from 12.5 to 15 per cent. ESOPs to be brought under FBT. Expenditure on samples and free distribution items to be exempted from fringe benefit tax. Additional revenue from direct taxes to yield Rs 30 billion and indirect taxes revenue neutral.
Tax exemption on aviation turbine fuel sold to turbo prop aircraft extended to all small aircraft less than 40,000 kg. Withdrawals by central and state governments exempted from Banking Cash Transaction Tax. The limit for individuals and HUF raised from Rs 25,000 to Rs 50,000. Two lakh people to benefit out of service tax exemption. Govt to lose Rs 8 billion as a result. Service tax on Residents Welfare Associations whose members contribute more than Rs 3,000.
Surcharge on Corporate income tax on companies below Rs 10 million removed. Tax free bonds to be issued by state-owned urban local bodies. Five year tax holiday for two, three, four star hotels and convention centres with a seating capacity of 3,000 in NCT of Delhi, Gurgaon, Ghaziabad, Faridabad and Gautam Minimum Alternate Tax being extended. Benefits of investment in venture capital funds confined to IT, bio-technology, nano-technology, seed research, dairy among some others. Excise duty on cement reduced from Rs 400 per tonne to Rs 350 per tonne for cement bags sold at Rs 190 per bag at retail market. Those sold above Rs 190 will attract excise duty of Rs 600 per tonne.
An Expert Committee to be set up to study the impact of climate change in India. Rs 1.5 bilion to be given to Ministry of Youth and Sports for Commonwealth Games and Rs 3.5 billion to the Delhi Government for the purpose. Rs 500 million to be provided for the Commonwealth Youth Games in Pune. Rs 1 billion for recognising excellence in the field of agricultural research. VAT revenues increased by 24.3 per cent in the first nine months of 2006-07. A national level goods and services tax to be introduced from next fiscal. Fiscal deficit to be 3.7 per cent in the current year and revenue deficit two per cent. Fiscal management enabled States consolidate debt to the tune of Rs 1.1 trillion and 20 states availed of debt waiver to the tune of Rs 85.75 billion. The share of States from the revenue expected to touch Rs 1.42 trillion during 2007-08 as against Rs 1.20 trillion during 2006-07. Total expenditure estimated at Rs 6.81 trillion. Increase in gross tax revenue by 19.9 per cent, 20 per cent and 27.8 per cent in first three years of UPA government. Intend to keep tax rates moderate
The Union Budget 2008-09 was read by Finance Minister P Chidambaram. Key features of the budget were:
Changes in I-T slab. Threshold of exemption for all Income Tax assesses raised from from Rs 110,000 to Rs 150,000. Every income tax assessees to get relief of minimum of Rs 4,000. No change in rate of surcharge. New tax slabs will be: 10 per cent for Rs 150,000 to Rs 300,000, 20 per cent for Rs 300,000 to Rs 500,000 and 30 per cent above Rs 500,000. For women, the income tax limit goes up from Rs 145,000 to Rs 180,000. In case of senior women citizens, it increases from Rs 195,000 to Rs 225,000.
Fresh facilities, encouragement to sports and guest houses exempted from Fringe Benefit Tax. Five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from April 1, 2008. Five year tax holiday for promoting cultural tourism. Short-term capital gains increases to 15 per cent. Commodities Transaction Tax to be introduced on the lines of Securities Transaction Tax. Banking cash transaction tax withdrawn from April one, 2009. Direct tax proposals to be revenue neutral. Indirect tax proposals to result in loss of Rs 50 billion.
To protect tigers, Rs 500 million for National Tiger Conservation Programme. Bulk of it to be used to raise Tiger Protection Force. Plan expenditure fixed at Rs 2.43 trillion and non plan expenditure at Rs 5.74 trillion. Fiscal deficit pegged at 3.1 per cent and revenue deficit at 1.4 per cent. Tax to GDP ratio increased from 9.2 per cent in 2004-05 to 12.5 per cent 2007-08. Customs duty on specified life saving drugs reduced from ten per cent to five per cent. Special Countervailing Duty on power imports. Customs duty on specified sports goods machinery down from 7.5 per cent to five per cent. Duty withdrawn on naptha for production of polymers. Duty on crude and unrefined sulphur reduced from five to 2 per cent to help raise domestic fertiliser production.
The Gross Domestic Product increased by 7.5 per cent, 9.5 per cent, 9.7 percent and 9 per cent in the first four years from fiscal year 2004-05 to 2007-08 recording a sustained growth of over 9 per cent for three consecutive years for the first time. The growth drivers for the period were agriculture, services, manufacturing along with trade and construction. Fiscal deficit down from 4.5 per cent in 2003-04 to 2.7 per cent in 2007-08 and Revenue deficit from 3.6 per cent to 1.1 per cent in 2007-08.
The domestic investment rate as a proportion of GDP increased from 27.6 per cent in 2003-04 to 39 per cent in 2007-08. Gross Domestic savings rate shot up from 29.8 per cent to 37.7 per cent during this period. The Gross capital formation in agriculture as a proportion of agriculture GDP increased from 11.1 per cent in 2003-04 to 14.2 per cent in 2007-08. The tax to GDP ratio increased from 9.2 per cent in 2003-04 to 12.5 per cent in 2007-08. Annual growth rate of agriculture rose to 3.7 per cent during 2003-04 to 2007-08. The foodgrain production recorded an increase of 10 million tonnes each year during this period and touched an all time high of 230 million tonnes in 2007-08.
While manufacturing sector recorded growth of 9.5 per cent per annum in the period 2004-05 to 2007-08, communication and construction sectors grew at the rate of 26 per cent and 13.5 per cent per annum, respectively. Exports grew at an annual average growth rate of 26.4 per cent in US dollar terms in the period 2004-05 to 2007-08. Foreign trade increased from 23.7 per cent of GDP in 2003-04 to 35.5 per cent in 2007-08.
Plan allocation for agriculture increased by 300 per cent from 2003-04 to 2008-09. Rashtriya Krishi Vikas Yojna launched in 2007-08 with an outlay of Rs 250 billion to increase growth rate of agriculture and allied sector to 4 per cent per annum during Eleventh Plan period. Agriculture credit disbursement increased three times from Rs 870 billion in 2003-04 to about Rs 2.50 trillion in 2007-08. To strengthen short-term cooperative credit structure, revival package in 25 states involving financial assistance of about Rs 135 million is being implemented.
The Union Budget 2010-11 was read by Finance Minister Pranab Mukherjee. Key features of the budget were:
Income up to Rs 160,000 — nil Income above Rs 160,000 and up to Rs 500,000 — 10 per cent. Income above Rs 500,000 and up to Rs 800,000 — 20 per cent. Income above Rs 800,000 — 30 per cent. Income Tax department ready with two-page Saral-2 return forms for individual salaried assesses. New tax rates would offer relief to 60 per cent of tax-payers. Government's net borrowing to be Rs 3.45 trillion for 2010-11.
Additional deduction of Rs 20,000 allowed on long term infrastructure bonds for income tax payers; this is above Rs one lakh on saving instruments allowed already. A unique identity symbol would be provided to the Indian Rupee in line with US Dollar, British Pound Sterling, Euro and Japanese Yen. Fiscal deficit seen at 4.8 per cent and 4.1 per cent in 2011-12 and 2012-13 respectively. Total expenditure pegged at Rs 11.8 trillion, an increase of 8.6 per cent. Gross tax receipts pegged at Rs 7.46 trillion for 2010-11, non-tax revenues at Rs 1.48 trillion.
Planning Commission to prepare integrated action plan for Naxal-affected areas. Defence allocation pegged at Rs 1.47 trillion in 2010-11 against Rs 1.41 trillion in the previous year. Of this, capital expenditure would account for Rs 600 billion. Fiscal deficit pegged at 6.9 per cent in 2009-10 as against 7.8 per cent in the previous fiscal. Finance Minister to continue giving cash subsidy for fuel and fertiliser instead of previous practice of bonds. Non-plan expenditure pegged at Rs 373.92 billion and Plan expenditure at Rs 7.35 trillion in budget estimates. 15 per cent increase in plan expenditure and six per cent in non-plan expenditure.
The Union Budget 2011-12 was read by Finance Minister Pranab Mukherjee. Key features of the budget were:
Critical institutional reforms set pace for double-digit growth. Scaled up flow of resources infuses dynamism in rural economy. GDP estimated to have grown at 8.6 per cent in 2010-11. Exports grown by 9.6 per cent, imports by 17.6 per cent in April-January 2010-11 over corresponding period last year. Indian economy expected to grow at 9 per cent in 2011-12. Five-fold strategy to deal with black money. Group of Ministers to suggest ways for tackling corruption. Public Debt Management Agency of India Bill to come up next financial year. Direct Tax Code (DTC) to be effective from April 01, 2012.
Phased move towards direct transfer cash subsidy to BPL people for better delivery of kerosene, LPG and fertilizer mooted. Rs 400 billion to be raised through disinvestment in 2011-12. FDI policy to be liberalised further. SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirement. FII limit for investment in corporate bonds in infrastructure sector raised. Additional banking license to private sector players proposed. Rs 600 billion to be provided in 2011-12 for maintaining minimum Tier I Capital to Risk Weighted Asset Ratio (CRAR) of 8 per cent in public sector banks. Rs 5 billion to be provided to regional rural banks to maintain 9 per cent CRAR.
India Microfinance Equity Fund of Rs 1 billion to be created by SIDBI. Rs 5 billion Women SHG Development Fund to be created. Micro Small and Medium Enterprises MSME gets boost as Rs 50 billion provided to SIDBI and Rs 30 billion to NABARD. Existing housing loan limit enhanced to Rs 250,000 lakh for dwelling units. Provision under Rural housing Fund enhanced to Rs 30 billion. Allocation under Rashtirya Krishi Vikas yojna (RKVY) increased to Rs 78.60 billion.
Allocation of Rs 3 billion to promote 60000 pulses villages in rainfed areas. Rs 3 billion vegetable initiative to achieve competitive prices. Rs 3 billion to promote higher production of nutri-cereals. Rs 3 billion to promote animal based protein. Rs 3 billion Accelerated Fodder Development Programme to benefit farmers in 25,000 villages. Credit flow to farmers raised from Rs 3.75 trillion to Rs 4.75 trillion.
The Union Budget 2012-13 was read by Finance Minister Pranab Mukherjee. Key features of the budget were:
Direct proposals to give in net revenue loss of Rs 45 billion and net gain of Rs 459 billion from indirect taxes, resulting into a net gain of Rs 414 billion. Fiscal deficit targeted at 5.1 per cent of GDP in 2012-13, down from 5.9 per cent in 2011-12; Central Government debt at 45.5 per cent of GDP. Total expenditure budgeted at Rs 14.9 trillion; plan expenditure at Rs 5.21 trillion, 18 per cent higher than 2011-12 budget; non-plan expenditure at Rs 9.69 trillion. Gross Tax Receipts estimated at Rs 10.77 trillion. 15.6 per cent higher than original budget estimates and 19.5 per cent over the revised estimates for 2011-12.
Net tax to the Centre in 2012-13 estimated at Rs 7.71 trillion; Non-Tax Revenue Receipts estimated at Rs 1.64 trillion and Non-debt Capital Receipts at Rs 416.50 billion. Total expenditure for 2012-13 budgeted at Rs. 14.90 billion, including Rs 5.21 trillion of Plan Expenditure and Rs 9.69 trillion as Non-Plan Expenditure. Defence services get Rs 1.93 trillion.
Introduction of amendments to the FRBM Act as part of Finance Bill, 2012. Concept of "Effective Revenue Deficit" and "Medium Term Expenditure. Framework" statement are two important features of amendment to FRBM Act in the direction of expenditure reforms. Effective Revenue Deficit is the difference between revenue deficit and grants for creation of capital assets. This will help in reducing consumptive component of revenue deficit and create space for increased capital spending. "Medium-term Expenditure Framework" statement will set forth a three-year rolling target for expenditure indicators. Recommendations of the Expert Committees to streamline and reduce the number of centrally sponsored schemes and to address plan and non-plan classification to be kept in view while implementing Twelfth Plan. Central Plan Scheme Monitoring System to be expanded for better tracking and utilisation of funds.
Some subsidies, while being inevitable, may become undesirable if they compromise the macroeconomic fundamentals of economy. Subsidies related to administering the Food Security Act will be fully provided for. Endeavour to keep central subsidies under 2 per cent of GDP in 2012-13. Over next 3 year, to be further brought down to 1.75 per cent of GDP. Based on recommendation of task force headed by Shri Nandan Nilekani, a mobile-based Fertilizer Management System has been designed to provide endto-end information on movement of fertilisers and subsidies. Nation-wide roll out during 2012. All three public sector Oil Marketing Companies have launched LPG transparency portals to improve customer service and reduce leakage. Endeavour to scale up and roll out Aadhaar enabled payments for various government schemes in atleast 50 districts within next 6 months.
DTC Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee. Drafting of model legislation for the Centre and State GST in concert with States is under progress. GST network to be set up as a National Information Utility and to become operational by August 2012.
The Union Budget 2013-14 was read by Finance Minister P Chidambaram. Key features of the budget were:
Clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution and independent judiciary for greater assurance is underlying theme of tax proposals. Tax Administration Reforms Commission to be set up. In short term need to reclaim peak of 11.9 per cent of tax GDP ratio achieved in 2007-08. Little room to give away tax revenues or raise tax rates in a constrained economy. No case to revise either the slabs or the rates of Personal Income Tax. Even a moderate increase in the threshold exemption will put hundreds of thousands of Tax Payers outside Tax Net. However, relief for Tax Payers in the first bracket of Rs 200,000 to Rs 500,000. A tax credit of Rs 2,000 to every person with total income upto Rs 500,000. Surcharge of 10 per cent on persons (other than companies) whose taxable income exceed Rs 100 million to augment revenues. Increase surcharge from 5 to 10 per cent on domestic companies whose taxable income exceed Rs 100 million.
Modified provisions of GAAR will come into effect from 1.4.2016. Rules on Safe Harbour will be issued after examing the reports of the Rangachary. Committee appointed to look into tax matters relating to Development Centres & IT Sector and Safe Harbour rules for a number of sectors. Fifth large tax payer unit to open at Kolkata shortly. A number of administrative measures such as extension of refund banker system to refund more than Rs 50,000, technology based processing, extension of e-payment through more banks and expansion in the scope of annual information returns by Income-tax Department.
Revised Estimates (RE) of the expenditure in 2012-13 at 96 per cent of the Budget Estimates (BE) due to slowdown and austerity measures. During 2013-14, BE of total expenditure of Rs 16.65 trillion and of Plan Expenditure at Rs 5.55 trillion. Plan Expenditure in 2013-14 to grow at 29.4 per cent over Revised Estimates for the current year. All flagship programmes fully and adequately funded and sufficient funds provided to each Ministry or Department consistent with their capacity to spend funds. Budget for 2013-14 to have one overarching goal of creating opportunities for our youth to acquire education and skills that will get them decent jobs or self-employment.
Tax proposals on indirect tax front would yield Rs 75 trillion. Indian Custom Single Window Project to be taken up for facilitating trade. Clean energy cess increased from Rs 50/ tonne to Rs 100/tonne. Additional 5 per cent excise tax to be levied on aerated drinks with added sugar (cold drinks). Tobacco products also to get costly as excise duty hiked to 72 per cent. Government announces reduction in excise duty for specified food package industry from 10 per cent to 6 per cent. Excise duty on footwear reduced from 12 per cent to 6 per cent.
Government announces measures to encourage manufacture of LCD/LED panels of TVs. Housing loan rebate to raised from Rs 150,000 to Rs 200,000. Net effect of direct tax proposals is revenue loss of Rs 222 billion. Government proposes to increase investment limit under Section 80C from Rs 100,000 to Rs 150,000. Tax exemption limit for small and marginal, and senior tax payers changed from Rs 200,000 to Rs 250,000. For senior citizens, no tax for income up to Rs 300,000 per annum. No changes in tax rate.
Pradhan Mantri Gram Sadak Yojana has a massive impact on rural development; Govt sets aside Rs 143 billion for this scheme. Crisis Management Center for women at Delhi; money to be provided from Nirbhaya fund. Govt announces Beti Padhao, Beti Badhao Yojana; sets aside Rs 100 crore for this. Safety of women of prime importance.
EPFO will launch a unified account scheme for portability of Provident Fund accounts. Schemes for disabled persons in the country. 15 new Brail presses to be established and revival of 10 existing. Rs 505 billion proposed for Schedule Caste development. Govt committed to providing 24/7 power supply to all homes. Deen Dayal Upadhyay Gram Jyoti Yojna for electricity supply to rural areas. Rs 2 billion for 'Statue of Unity' of Sardar Vallabh Patel.
The Union Budget 2015-16 was read by Finance Minister Arun Jaitley. Key features of the budget were:
Fiscal deficit seen at 3.9 per cent of GDP in 2015-16. Will meet the challenging fiscal target of 4.1 per cent of GDP. Remain committed to meeting medium term fiscal deficit target of 3 per cent of GDP. Current account deficit (CAD) below 1.3 per cent of GDP. Jaitley says have to keep fiscal discipline in mind despite need for higher investment.
GDP growth seen at between 8 per cent and 8.5 per cent year-on-year. Nominal economic growth seen between 11 per cent and 12 per cent. Aiming double digit growth rate, achievable soon. Expects consumer inflation to remain close to 5 per cent by March, opening room for more monetary policy easing. Monetary policy framework agreement with the Reserve Bank of India (RBI) clearly states objective of keeping inflation below 6 per cent.
Revenue deficit seen at 2.8 per cent of GDP. Non-tax revenue seen at Rs 2.21 trillion. Agricultural incomes are under stress. Net receipts under market stabilisation scheme estimated at Rs 200 billion.
Government targets Rs 410 billion from stake sales in companies in 2015/16. Total stake sale in 2015-16 seen at Rs 695 billion. Sets stake sale target for 2016-17 at Rs 550 billion. Revises down stake sale target for 2014-15 to Rs 313 billion.
Propose to merge commodities regulator Forward Markets Commission (FMC) with Securities and Exchange Board of India (Sebi). To bring a new bankruptcy code. Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee. To set up public debt management agency. Proposes to introduce a public contract resolution of disputes bill. To establish an autonomous bank board bureau to improve management of public sector banks
The Union Budget 2016-17 was read by Finance Minister Arun Jaitley. Key features of the budget were:
Look to double farmer income by 2020. Govt will reorient interventions in farming sector; need to optimally utilize water resources. 2.85 million hectares will be brought under irrigation. A dedicated irrigation fund with Rs 200 billion under Nabard. Major programme for sustainable groundwater management. Govt to set apart Rs 4.12 billion to encourage organic farming. Access to market is critical for farmers. Implementing Pradhan Mantri Gram Sadak Yojana as never before—scheme to be allocated Rs 190 billion in FY17; Rs 270 billion in total—to advance completion target to 2019 from 2022.
To support farmers after calamities, special focus has been given to ensure timely flow of credit, target is Rs 9 trillion in FY17. Ensure benefit of minimum support price reaches all parts of country—remaining states will be encouraged to take up decentralized procurement, effective arrangement of pulse procurement. E-market portal for connecting breeders and farmers. Visible rise in yield of honey. 90 per cent of domestic honey is now exported. Allocation of Rs 359 billion for farm sector.
Cluster-facilitation teams under MGNREGA to optimize water resources. Rs 385 billion allocated for MNREGA in 2016-17, the highest ever if entire amount is spent. As of 1 April 2015, 18,542 villages were not electrified—as on 23 Feb 2016, 5,542 villages have been electrified. 2.87 trillion to be given grant-in-aid for gram panchayats and municipalities; it is quantum jump of 228 per cent. Govt committed to achieve 100 per cent village electrification by 1 May 2018. Need to spread digital literacy in rural areas—plan to launch digital literacy mission for more than 6,000 households in rural areas. Modernisation of land records essential—to be implemented as a central sector scheme. Govt to develop 300 ‘rurban’ clusters.