New Delhi: Samajwadi Party, which is extending support to the government, on Monday joined the opposition in ridiculing the General Budget, terming it as "sour", "trepid" and "unimpressive".
RJD chief Lalu Prasad, who had criticised the Rail Budget two days back despite his association with the ruling UPA, however, struck a conciliatory tone and described the Union budget as a "balanced" one.
SP, BJP, Left parties, JD(S) and BJD were critical of the budget even as the Congress hailed it.
"While the Rail Budget was sweet and sour, this budget is only sour," SP chief Mulayam Singh Yadav said while reacting to the Budget presented by Finance Minister Pranab Mukherjee in Parliament.
He particularly said farmers and rural areas have been neglected in the budget.
"I do not see any great message in the budget. It is timid, trepid and unimpressive," senior BJP leader and former Finance Minister Yashwant Sinha said.
He said he would have expected the government to list steps it was taking to fight global recession but the budget had nothing on it.
Sinha said the fiscal deficit has gone up and there was no boldness shown by the Finance Minister as focus on infrastructure projects like roads, airports is missing. JD(S) President and former Prime Minister H D Deve Gowda said there was nothing in the budget for the farmers.
"I am deeply hurt. The farmers and the farming sector have been ignored," Gowda said.
CPI leader Gurudas Dasgupta described the budget as "inconsequential and insufficient" which "fails to address the economic challenges facing the nation".
Indian Budget News|Budget News
Rs 120 crore for Unique Identity Cards; first set in 18 months
NEW DELHI: Countrymen will start getting the sophisticated unique identity cards from within the next 18 months with the government today allocating Rs 120 crore for the purpose in the general budget.
Announcing this, finance minister Pranab Mukherjee said the first set of unique identity numbers will be rolled out in 12 to 18 months.
"A provision of Rs 120 crore has been proposed for this project," Mukherjee said during his budget in the Lok Sabha.
The Unique Identification Authority of India (UIDAI), set up recently by the government, will establish an online databse with identity and biometric details of Indian residents and provide enrolment and verification services across the country.
Mukherjee said the setting of the UIDAI was a "major step in improving the governance with regard to delivery of public services.
The Finance Minister also expressed his happiness that the project also marks the beginning of an era where a top private sector talent, Nandan Nilekani of Infosys, steps forward to take the responsibility for implementing the projects of vital national importance.
Allocation for NRHM hiked by 2,057 crore
NEW DELHI: Giving a boost to healthcare in rural areas, finance minister Pranab Mukherjee hiked the allocation for the flagship National Rural Health Mission (NRHM) by an additional Rs 2,057 crore over and above Rs 12,070 crore in the interim budget.
Apart from this, the health sector as a whole has an allocation of Rs 4,447 crore.
The finance minister said the response for Rashtriya Swasthya Bima Yojana, which was operationalised last year, has been very good.
More than 46 lakh BPL families in 18 states and Union Territories have been issued bio-metric smart cards. This scheme empowers poor families by giving them freedom of choice for using healthcare services from an extensive list of hospitals including private ones.
Government proposes to bring all BPL families under this scheme. "An amount of Rs 350 crore, marking 40 per cent increase over the previous allocation is being provided in 2009-10 budget estimates," he said.
21% hike in Rashtrapati Bhavan budget; Rs 38L for Prez salary
NEW DELHI: Allocation for Rashtrapati Bhavan saw a 21.39% jump with a major chunk being earmarked for Presidential secretariat expenses.
Rs 38 lakh has been allocated for salaries and allowances of the President in the 2009-10 budget presented by finance minister Pranab Mukherjee in the Lok Sabha.
The budget for the Rashtrapati Bhavan has been pegged at Rs 27.52 crore in comparison to last year's Rs 22.67 crore.
The allocation also covers establishment-related expenses in respect of all the staff of the secretariat and expenditure on household establishment and purchase of vehicles.
Mixed response to Budget from Gulf NRI businessmen
DUBAI: Indian businessmen in the Gulf region welcomed the focus given to the agriculture sector in the Budget presented by Finance Minister Pranab Mukherjee today, but expressed disappointment as it offers no incentives for NRIs.
Xpertize United Managing Director Navin Kapoor and a board member of Indian Business and Professional Council (IBPC) said the Gulf businessmen in gold and silver trade will not welcome the hike in customs duty on gold and silver.
Terming the Budget as "lacklustrous", Indian Business and Professional Council (IBPC), which had organised a meeting to discuss the proposals, President and member of administrative board Paras Shahdapuri said, "There is nothing extremely exciting about the Budget."
"Agriculture sector has been given wide support which is good but infrastructure hasn't been given enough attention even as fiscal deficit remains a matter of anxiety," he said.
Kapoor further said, "There was no mention of NRIs in the Budget and that is disappointing."
Shahdapuri also said the country's exports, which have suffered in the wake of the financial crisis, should have been given more incentives.
The businessmen also expressed their disappointment over lack of focus on infrastructure. Infrastructure development would provide huge opportunities for Gulf companies engaged in the construction sector, Shahdapuri said.
India's Consul-General to Dubai, Venu Rajamony, also lauded the Budget for its "inclusive nature" and an important step to bringing India back to a 9 per cent growth rate.
Minimum Rs 30 lakh needed to be called 'wealthy'
NEW DELHI: The government today doubled the threshold for calling a person or entity wealthy, saying the wealth tax would be imposed only on those having a net wealth exceeding Rs 30 lakh.
Under the existing provisions, wealth tax is charged on "every individual, Hindu undivided family and company at the rate of one per cent" of the amount by which their net wealth exceeds Rs 15 lakh.
However, Finance
Minister Pranab Mukherjee today proposed to amend the relevant section of the Wealth Tax Act. Pursuant to this, for every year commencing on and from April 1, 2010, the one per cent wealth tax will be charged on the amount by which the net wealth exceeds Rs 30 lakh.
Besides, the Finance Minister has also proposed to amend certain provisions related to agreement for avoidance of double taxation with respect to wealth tax.
Currently, the Central Government has been conferred with powers to enter into an agreement with the government of any reciprocating country outside India for grant of relief in respect of the wealth tax laws in India and the other nation.
As per the proposed amendment, India can also enter into such agreements with governments of any territory outside India, which may be notified by the Central Government. This particular amendment would take effect from October 1, 2009.
Indirect tax rates unchanged, exchequer to take a hit
NEW DELHI: The government today retained the broad rate structure for all indirect taxes, which will dent its kitty under this head by 16.11% this fiscal compared to projections a year ago.
The government's collection from indirect taxes is pegged at Rs 2.69 lakh crore for this fiscal, a way down from the Rs 3.21 lakh crore Budget Estimate for 2008-09.
This is despite the fact that the net of service tax has been expanded, excise duty on some goods like LPG, nylon and yarn raised from 4% to 8% and customs duty imposed on set-top boxes which would give an additional Rs 2,000 crore.
The government realised a low indirect tax revenue at around Rs 2.81 lakh crore in 2008-09 against budget estimates of Rs 3.21 lakh crore.
Only service tax target of Rs 65,000 crore, pegged in the revised estimates for 2008-09, is retained in the full Budget presented today, which is higher by Rs 540 crore than projected in budget estimates for the last fiscal.
Both customs duty and excise duty collection targets for the current fiscal are less than projected for last fiscal, both in revised estimates and budget estimates.
Customs duty collections are projected to be down over 17% at Rs 98,000 crore during the current fiscal against Rs 1,18,930 crore in Budget estimates, and over nine% lower than Rs 1,08,000 crore in revised estimates.
LCD TVs, mobiles, select life saving drugs cheaper, set-top box costlier
NEW DELHI: Select life saving drugs, LCD TVs, mobile phones, branded jewellery, sports and leather products, packaged software and footwear are among items that would cost less, while gold bars and coins, silver, set-top boxes and cosmetic surgery would turn costlier after the Budget. ( Watch )
Presenting the Union Budget for 2009-10, finance minister Pranab Mukherjee on Monday proposed reduced customs duty on life saving drugs to five per cent from existing 10 per cent. LCD TVs would also attract the lower five per cent customs duty, making the product cheaper.
Mukherjee, however, has imposed five per cent customs duty on set-top boxes used for Direct-To-Home television service. ( Watch )
He also announced duty sops for green energy products like bio-fuel and generators used in environment-friendly sectors by lowering customs duty to 2.5 per cent and five per cent, respectively, from 7.5 per cent.
In a move to appease women, the minister did away with excise duty on branded jewellery from existing two per cent. However, gold bars, coins and silver would become costlier as the government has proposed to increase customs duty.
Gold bars and gold coins would now attract Rs 200 per 10 gram from earlier Rs 100 while on silver, the custom duty has been increased to Rs 1,000 a kg from Rs 500.
Govt announces extension of stimulus package for print media
NEW DELHI: The Government on Monday announced the extension of stimulus package, including a 10% increase in government advertisement rates,given to print media for another six months ending this December.
In his budget speech, finance minister Pranab Mukherjee said the stimulus package given in February this year has been extended from June 30 to December 31 this year.
"In February this year, the print media was given a stimulus package comprising waiver of 15 per cent agency commission on DAVP advertisements and a 10 per cent increase in the DAVP rates to be paid as special relief subject to documentary proof of loss of revenue in non-governmental advertisements," he said.
Additional excise duty on big cars cut
NEW DELHI: Bigger cars will be cheaper as the government today reduced additional excise duty on those with engine capacities of 2,000cc and above by Rs 5,000 per unit.
It also cut the duty of petrol-driven trucks to eight per cent from 20 per cent at present.
"In (the) case of vehicles of engine capacity below 2000cc, this component (specific duty) was Rs 15,000 per unit, while for vehicles of (a) higher engine capacity it was Rs 20,000 per unit. These rates are now being unified at the lower level of Rs 15,000 per unit," finance minister Pranab Mukherjee said while presenting the Budget for 2009-10 today.
Excise duty on petrol-driven trucks and lorries has also been reduced to eight per cent from 20 per cent.
"Petrol-driven trucks provide a useful means of transport within cities and across short distances. These are chargeable to excise duty of 20 per cent. I propose to reduce excise duty on these trucks to eight per cent to equate the duty with similar vehicles run on diesel," Mukherjee said.
Besides, the duties on the chassis of such trucks and lorries have been reduced to eight per cent from 20 per cent, although the fixed component of Rs 10,000 would continue to be levied.
Aiming to reduce the usage of fuel guzzlers, the government had last year imposed the fixed excise duties of Rs 15,000 for cars with an engine capacity of 1,500cc-1,999cc and Rs 20,000 for engines with 2,000cc and above. This was in addition to the already existed 20 per cent duty on such cars.
Gem, jewellery sector sees little relief from Budget
MUMBAI: India's federal budget on Monday brought little relief to the gem and jewellery sector as lack of a cut in interest rates took away cheer from the excise exemption on branded jewellery sales, industry officials said.
"The Budget is not very encouraging for the gems and jewellery industry," said Vasant Mehta, chairman, Gems and Jewellery Export Promotion Council.
"We had asked for an interest subvention which has not been attended to. The exports of the country will be hurt because we are not at par with our international competitors and in recessionary times we need to be competitive," he said.
Gem and jewellery exports contribute 12% to India's foreign exchange reserves.
The industry currently benefits from an interest rate cut of 2%, which has been extended till March 2010. The sector had demanded an additional 2% interest subvention.
The government's move to exempt branded jewellery sales from excise duty did little to revive sentiment as the government increased customs duty on precious metals and hurt the sector already reeling under the economic downturn, officials said.
"There is some good news as the 2% excise duty on branded jewellery
is gone but the gold price hike and no further lowering of interest rates is likely to hurt," said Mehul Choksi, chairman, Gitanjali Gems Ltd.
The amount of gold in studded jewellery varies from 25-30%.
"The duty on gold will affect the industry as a whole as gold prices in India will go up... the industry was looking for abolishing of the duty," said Rajesh Mehta, chairman and managing director, Rajesh Exports.
The 2009/10 federal budget saw customs duty on gold bars being raised to 200 rupees per 10 grams from the current 100 rupees while on other forms of gold excluding jewellery it was raised to 500 rupees per 10 grams from 250 rupees.
However, sops given to the export sector as a whole were welcomed by the industry.
"From the export industry the welcome steps are the abolishing of the fringe benefit tax and the extension of the sunset clause... from 2010 to 2011 wherein EOU's (export-oriented units) and SEZ's (special economic zones) are exempted from income tax," said Mehta of Rajesh Exports.
Shares of Gitanjali Gems rose as much as 6.6% during the Budget but soon reversed gains and ended down 4.42% to 103.9 rupees.
Shares in Rajesh Exports ended down 5.24% at 41.6 rupees and Classic Diamonds ended at 15.4 rupees, down 7.23%.
Budget silent on edible oils tax, trade upset
NEW DELHI: India's federal budget left import duty on edible oils unchanged on Monday, disappointing local industry that had been rooting for at least a small increase.
"There is no news for the edible oil sector. We are little bit disappointed as nothing has been announced to promote domestic oilseeds production," said B V Mehta, executive director of the Solvent Extractors' Association of India.
The market expected the government to impose a nominal tax on crude palm oil imports and marginally raise the levy on refined oils.
India allows tax free imports of crude variants, while levies a 7.5 percent tax on refined imports.
With soaring stocks of imported edible oils at Indian ports, the government was under pressure to slap duties on new cargoes.
An analyst said the decision to leave the tax regime unchanged indicated the government was still assessing the monsoon's progress.
India, the world biggest edible oil consumer after China, mainly buys palm oil from Indonesia and Malaysia, and small quantity of soyoil from Brazil and Argentina.
"Imports of edible oil will continue to be higher in coming days as the global prices are at comfortable level," said Veeresh Hiremath, senior analyst with Karvy Comtrade.
He said local prices of oils and oilseeds would decline.
Budget cuts excise duty on petrol-driven trucks
MUMBAI: India has reduced the excise duty on petrol-driven trucks to 8% from 20%, the Budget document showed on Monday.
Specific component of excise duty applicable to large cars and utility vehicles of engine capacity of 2000 cc and above will be reduced to 15,000 rupees per vehicle from 20,000 rupees earlier, the document said.
Govt to introduce Food Security Bill soon
NEW DELHI: The government on Monday said it will soon introduce a Bill to enact a Food Security law that will provide 25 kg of rice and/or wheat at Rs 3 to each family below the poverty line - a key poll promise of the Congress that heads the ruling coalition.
Presenting the Union Budget 2009-10, finance minister Pranab Mukherjee said, the Bill will soon be introduced after consultation with different stakeholders.
A draft Food Security Bill will be put up on the website of the ministry of food and public distribution for public debate on this issue, he added.
President Pratibha Patil had, on June 4, said a National Food Security Act would be formulated whereby each BPL family would be entitled by law to get 25 kg of rice or wheat per month at Rs 3 a kg, a promise made by the Congress before general elections 2009.
At present, the Centre provides 35 kg of rice or wheat per month to each BPL family. Wheat is supplied at Rs 4.15 per kg while rice at Rs 5.65 a kg to over four crore families living below the poverty line.
The Centre has enough foodgrain in its buffer stock to implement this law. On the back of bumper foodgrain output and higher minimum support prices, the government has procured a record of over 250 lakh tonnes of wheat and over 300 lakh tonnes of rice till July 3 this marketing season.
Higher education gets boost, IITs, NITs bag Rs 21 billion
NEW DELHI: Continuing its thrust on higher education, the union budget 2009-10 Monday proposed to allocate over Rs.21 billion for the Indian Institutes of Technology (IITs) and the National Institutes of Technology (NITs).
"I am allocating Rs.2,113 crore (Rs.21.13 billion) for IITs and NITs, which includes a provision of Rs. 450 crore for new IITs and NITs," finance minister Pranab Mukherjee said while presenting the budget.
Currently, there are 12 IITs and 20 NITs operating across the country including the new ones.
"The demographic advantage India has in terms of large percentage of young population needs to be converted into a dynamic economic advantage by providing them the right education and skills. The provision for the scheme Mission in Education through ICT has been substantially increased to Rs.900 crore," Mukherjee added.
Similarly, the provision for setting up and up-gradation of polytechnics under the skill development mission has been increased to Rs.495 crore (Rs.4.95 billion).
"The government shall take forward its intent of having one central university in each uncovered state and for this purpose I am allocating Rs.827 crore (Rs.8.27 billion)," the minister announced in his budget speech.
Announcing a special package for Panjab University, Mukherjee said: "The facilities at Panjab University, Chandigarh, need to be improved. I therefore, propose to make an allocation of Rs.50 crore (Rs.500 million) for this university."
Govt scraps Commodity Transaction Tax
NEW DELHI: The government on Monday abolished the Commodity Transaction Tax (CTT) that was announced in the Budget last year, but was yet to be implemented and the commodity exchanges rejoiced the decision.
Finance minister Pranab Mukherjee announced the scrapping of the CTT while presenting the Budget for 2009-10. He said the decision is in step with the recommendation of the Prime Minister's Economic Advisory Council.
The government had proposed 0.017% as the CTT (Rs 17 on the transaction value of every Rs one lakh trade on commodity exchanges).
The CTT was announced in line with the Security Transaction Tax (STT) in the 2008-09 Budget by then finance minister P Chidambaram but was not notified following stiff opposition from regulators and exchanges.
Reacting to the decision, commodity market regulator FMC Chairman B C Khatua said, "We are very happy for industry."
Expressing satisfaction, a spokesperson with the country's largest commodity exchange MCX said, "Thanks to the government for taking the decision. This will make the domestic market more efficient to compete globally and risk management will become more effective."
Similarly, leading farm commodity exchange NCDEX spokesperson Madan Sabnavis said, "This is a blessing for the entire commodity market. We were eagerly looking for this. It will restore confidence in the market."
Fringe Benefit Tax abolished
NEW DELHI: 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.
Union Budget: I-T limit raised; sops for poor and farmers
Monday , Jul 06, 2009 at 1741 hrs IST:In a pro-poor, pro-rural budget, Finance Minister Pranab Mukherjee on Monday raised personal income tax exemption by at least Rs 10,000, abolished IT surcharge and Fringe Benefit Tax, while focusing on jobs, cheap food for poor and loans for farmers.
In a budget that fulfils a number of Congress' poll promises while battling the pressures of global slowdown, Mukherjee focused on infrastructure and agriculture sector to push economic growth to nine per cent.
The industry welcomed the budget, saying it is a job well done given the trying circumstances, but had reservations on the hike in Minimum Alternate Tax and absence of details on disinvestment programme. The stock markets reacted strongly and tanked about 900 points on the issue of 6.8 per cent fiscal deficit, the highest in 18 years, and lack of sops for areas like housing, steel and infrastructure.
Mukherjee raised the personal income tax exemption by Rs 15,000 for senior citizens (above 65 years) and by Rs 10,000 for others including women and abolished FBT that would help employers in giving more benefits to employees.
The budget, providing for an expenditure of Rs 10.20 lakh crore, kept the corporate tax, customs, excise and service tax rates unchanged but changes in specific duties would make gold, silver and textile products costly, while making LCD TV and branded jewellery cheaper.
It also provides for 25 kg rice and wheat for poor at Rs three a kg, a guaranteed minimum Rs 100 a day rural job, a national electronic job exchange and over Rs 71,000 crore provision for social sector scheme.
Govt scraps Commodity Transaction Tax
NEW DELHI: The government on Monday abolished the Commodity Transaction Tax (CTT) that was announced in the Budget last year, but was yet to be implemented and the commodity exchanges rejoiced the decision.
Finance minister Pranab Mukherjee announced the scrapping of the CTT while presenting the Budget for 2009-10. He said the decision is in step with the recommendation of the Prime Minister's Economic Advisory Council.
The government had proposed 0.017% as the CTT (Rs 17 on the transaction value of every Rs one lakh trade on commodity exchanges).
The CTT was announced in line with the Security Transaction Tax (STT) in the 2008-09 Budget by then finance minister P Chidambaram but was not notified following stiff opposition from regulators and exchanges.
Reacting to the decision, commodity market regulator FMC Chairman B C Khatua said, "We are very happy for industry."
Expressing satisfaction, a spokesperson with the country's largest commodity exchange MCX said, "Thanks to the government for taking the decision. This will make the domestic market more efficient to compete globally and risk management will become more effective."
Similarly, leading farm commodity exchange NCDEX spokesperson Madan Sabnavis said, "This is a blessing for the entire commodity market. We were eagerly looking for this. It will restore confidence in the market."
Sensex dips 800 pts on deficit concerns
Mumbai: The BSE benchmark Sensex on Monday suffered the biggest fall on any Budget day and in the year too by plunging over 869 points on the Bombay Stock Exchange on concerns at the high fiscal deficit set by the Union Budget.
The Sensex, which started coming down soon after the announcement of budgetary proposals, dipped below 14,000-point level before closing 869.65 points down at 14,043.40, surpassing the hefty fall of 749 points on January 7.
The key index had touched the day's low of 13,959.44 as all the heavyweight stocks led by Reliance Industries suffered a heavy loss 6.53 per cent.
Besides the fiscal deficit, trading sentiment also affected as European stocks dipped to a seven-week low on worries that economic recovery might still be far way off.
The 50-share National Stock Exchange index Nifty also tumbled by 258.55 points to 4,135.70, after hitting the day's low of 4,133.70.
Finance Minister Pranab Mukherjee said the fiscal deficit may rise to 6.8 per cent of gross domestic product in the year 2009-10, the highest since 1994.
Banking sector stocks suffered the most, losing 8.17 per cent to 7,768.63, as ICICI Bank tumbled by 10 per cent and HDFC Bank by 5.88 per cent among lenders as the Budget did not have measures to open up the industry and on concerns that the borrowing plan will reduce the value of bond holdings, brokers said.
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