Latest News of India

FM revises tax slabs to give more money to consumers

NEW DELHI: The 2010-11 general budget today provided considerable relief to income tax payers by raising the slabs at two levels but hiked the central excise duty on non-petroleum products across the board from 8 to 10 per cent and the basic duty on crude and petroleum products besides effecting a one-rupee increase per litre on petrol and diesel.

The basic threshold limit for income tax exemption will remain at Rs 1.60 lakh. Under the new proposal, 10 per cent tax will be levied between Rs 1,60,001 and Rs 5,00,000, 20 per cent on incomes between Rs 5,00,001 and Rs 8,00,000 and 30 per cent above Rs 8,00,000.

The present income tax slabs and rates are 10 per cent for income between Rs 1,60,001 and Rs 3,00,000, 20 per cent for income between Rs 3,00,001 and Rs 5,00,000 and 30 per cent for income above Rs 5,00,001.

Proportionately, similar changes have been made in the taxes related to women and senior citizens aged above 65 years.

Mukherjee also gave another relief to individual tax payers by raising the existing limit of Rs 1,00,000 on tax savings by an additional amount of Rs 20,000 for investments in long-term infrastructure bonds.

Contributions to Central Government Health Scheme (CGHS) have also been allowed as deductions within the overall ceiling for tax rebate besides contributions to health insurance schemes which are currently allowed as deductions under the Income Tax Act.

The entire opposition walked out of the Lok Sabha during the presentation of budget by finance minister Pranab Mukherjee, dubbing it "highly inflationary" as he partially rolled back the stimulus by hiking the ad velorum component of excise duty on large cars and multi-utility vehicles by two per cent to 22 per cent.

The budget also raised the specific rates of duty on portland cement and cement clinker. The basic duty of 5 per cent on crude petroleum, 7.5 per cent on diesel and petrol and 10 per cent on other refined products is being enhanced.

The central excise duty on petrol and diesel is being enhanced by Re one per litre.

The proposals relating to customs and central excise are estimated to result in a net revenue gain of Rs 43,500 crore for the year. The proposals for service tax, in which government plans to bring in some more services, will result in a net revenue gain of Rs 3000 crore for the year.

While direct tax proposals are expected to result in a loss of Rs 26,000 crore for the year, those relating to indirect tax are estimated to result in a net revenue gain of Rs 46,500 crore.

Taking into account the concessions and measures to mobilise additional resources, the overall revenue gain is estimated to be Rs 20,500 crore for the year.

The budget also proposed a hike in defence expenditure from Rs 1,41,703 crore to Rs 1,47,344 crore, including Rs 60,000 for capital expenditure.

In the Budget Estimates for 2010-11, gross tax receipts are estimated at Rs 7,46,651 crore while the non-tax revenue receipts are estimated at Rs 1,48,118 crore.

Total expenditure is placed at Rs 11,08,749 crore, which is an increase of 8.6 per cent over the total expenditure in Budget Estimates of 2009-10. The plan and non-plan expenditures in Budget Estimates in 2010-11 are estimated at Rs 3,73,092 crore and Rs 7,35,657 crore respectively.

The fiscal deficit for 2010-11 has been pegged at 5.5 per cent and the rolling targets for 2011-12 and 2012-13 have been pegged at 4.8 per cent and 4.1 per cent respectively.

The fiscal deficit of 5.5 per cent of GDP in 2010-11 works out to Rs 3,81,408 crore. Taking into account various other financing items for fiscal deficit, the actual net borrowing of the government in 2010-11 would be of the order of Rs 3,45,010 crore.

In direct taxes, the Finance Minister proposed to reduce the current surcharge of 10 per cent on domestic companies to 7.5 per cent but at the same time raised the rate of Minimum Alternate Tax (MAT) from 15 per cent to 18 per cent of book profits.

In indirect taxes, Mukherjee made structural changes in the excise duty on cigarettes, cigars and cigarillos, coupled with some increase in rates. He also proposed to enhance excise duty on all non-smoking tobacco such as scented tobacco, snuff and chewing tobacco.

In addition, he proposed to introduce a compounded levy scheme for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch-making machines.

Attempting to pay focused attention to agriculture and related sectors, the Finance Minister proposed to provide project import status with a concessional import duty of 5 per cent for setting up mechanised handling systems and pallet-racking systems in mandis and warehouses for foodgrain and sugar as well as full exemption from service tax for installation and commissioning of such equipment.

A similar status on customs duty with full exemption from service tax will also be extended to initial setting up and expansion of cold storage, cold room and processing units for such produce.

Extending his goodies in excise duties in certain sectors, he gave full exemption to toy balloons and reduction in basic customs duty on long pepper, asafoetida and excise duty on goods covered under Medicinal and Toilet Preparations Act.

The Service Tax net is being expanded to include domestic and international air journeys of all classes, health check-up undertaken by hospitals for employees of business entities and health services provided under health insurance schemes offered by insurance companies.

Budget highlights

NEW DELHI: Highlights of 2010-11 budget presented by Finance Minister Pranab Mukherjee in parliament Friday:

-- Clean energy cess of Rs.50 per tonne on coal produced in India

-- Concessional duty of 4 percent for solar power rickshaw developed by Council of Scientific and Industrial Research

-- Concessional customs duty of 5 percent for cable TV operators for importing equipment

-- Toys fully exempt from central excise duty

-- Service sector tax retained at 10 percent to aid the introduction of GST; more services to be taxed

-- Accredited news agencies exempt from service tax

-- Net revenue gain Rs.22,500 crore

-- Taxes on large cars and SUVs increased 2 percent to 22 percent

-- Basic duty of 5 percent on crude oil restored

-- Tax on cigarettes, cigars and chewing tobacco increased

-- Rs. 26,000 crore revenue loss due to reduction of direct taxes

-- Partial roll back of reduction in central excise duty

-- Income up to Rs.1.6 lakh per year exempt from income tax; up to Rs.5 lakh to be taxed at 10 percent; income of Rs.5-8 lakh to be taxed at 20 percent and income above Rs.8 lakh to be taxed at 30 percent

-- IT returns forms for individual tax payers to be further simplified

-- Expenditure in 2010-11 estimated at 11,l8,749 crore

-- Fiscal deficit estimated at 5.5 percent in 2010-11; an improvement of 1 percent over 2009-10

-- Two more centralised tax processing centres to be set up in addition to the one at Bangalore

-- National Social Security Fund created for workers in unorganised sector with allocation of Rs.1,000 crore

-- Government to give Rs.1,000 for each National Pension Scheme account opened by workers in the unorganised sector

-- Exclusive skill development programme for the textile sector

-- Fifty percent hike in allocation for schemes for women and child development

-- Rs.4,500 crore allocated for ministry of social justice and empowerment, a hike of 80 percent

-- Rs.2,600 crore allocated for ministry of minorities affairs

-- Rs.1,900 crore for Unique Identification Authority of India

-- Rs.147,344 crore allocated for defence

-- 2,000 youth to be recruited in central paramilitary forces

-- Draft Food Security Bill prepared and will be put in the public domain

-- Allocation on primary education raised from Rs.26,800 crore to Rs.31,300 crore

-- Banking facilities to be provided to all habitations with a population of 2,000 and more

-- Rs.66,100 crore allocated for rural development in 2010-11; Rs.40,100 crore for National Rural Employment Scheme; RS.48,000 crore for Bharat Nirman

-- Rs.1,270 crore allocated for Rajiv Awas Yojana for slum dwellers, up from Rs.150 crore, an increase of 700 percent with the aim of creating a slum free India.

-- Forty-six percent of plan allocations in 2010-11 will be for infrastructure development

-- Coal Regulatory Authority to be set up to benchmark standards of performance

-- Allocation for new and renewable energy sector increased 61 percent from Rs.620 crore to Rs.1,000 crore in 2010-11

-- National Clean Energy Fund to be established

-- Rs.200 crore allocated as special package for Goa to prevent erosion and increase green cover

-- Government committed to growth of SEZs

-- Four-pronged strategy for growth of agricultural sector

-- Rs.200 crore to be provided in 2010-11 for climate-resilient agricultural initiative

-- Involvement of private sector in grain storage to continue for another two years

-- In view of drought and floods, debt repayment period extended to June 2010

-- Five more mega food processing projects in addition to 10 existing ones

-- FDI flows in April-December 2009 $20.9 billion

-- FDI policy to be made more user-friendly with one comprehensive document

-- Apex level financial stability council to be set up for banking sector

-- Indian Banking Association to give additional licences to private players

-- Provision for further capital for regional rural banks

-- Roadmap for reducing public debt in six months

-- Implementation of direct tax code from April 2011

-- Government actively engaged in finalising structure of general sales tax regime; hopes to implement it from April 2011

-- New fertiliser policy from April 2010; will lead to improved productively and more income for farmers

-- Economy stabilised in first quarter of 2009-10; strong rebound in second quarter; overall growth at 7.2 and could be higher when Q3 and Q4 are taken into account

-- Export figures for January encouraging

-- Hope to breach 10 percent growth mark in not too distant future

-- Government set in motion steps to bring down food inflation

-- Need to review stimulus package; need to make growth more broad-based

-- India has weathered global economic crisis well; Indian economy in far better position than it was a year ago. In 2009 Indian economy faced grave uncertainty; delay in southwest monsoon had undermined agricultural production

-- First challenge now is to quickly revert to 9 percent growth and then aim for double digit growth; need to make recovery more broadbased

-- Second challenge is to make growth more inclusive; have to strengthen food security

-- Third challenge is to overcome weakness in government's public delivery mechanism; a long way to go in this

Mere 4% hike in defence budget

New Delhi: The government allocated Rs 1,47,344 crore towards defence in 2010-11 budget, a paltry 4 per cent increase from last year's Rs 1,41,703 crore.

Of the allocation provided, Rs 60,000 crore would go for capital expenditure, Finance Minister Pranab Mukherjee said presenting the Budget for 2010-11 in the Lok Sabha.

The four per cent increase in real terms would amount to only Rs 5,641 crore.

Last year, the government had provided a steep hike of about 34 per cent for the defence working out to an increase of Rs 36,103 crore.

Mukherjee, however, said considering the importance of defence of the country, more funds would be provided on the basis of requirements in the future.

The defence allocation continues to hover over 2.5 per cent of the GDP, though there have been suggestions to increase it substantially in view of the prevailing security situation.

Cigarettes, TVs, ACs and cars go dearer

New Delhi: Pay more for cars, fuel, TVs, ACs, cigarettes,Car, fuel, AC, TV, gold and silver jewellery, cigarettes and other tobacco products will cost more in the new fiscal with Finance Minister Pranab Mukherjee proposing a hike in duties and change in tax structure on these items in the Budget for 2010-11.

As part of a partial withdrawal of stimulus measures, given the recovery seen in the economy, Mukherjee announced hiking excise duty on non-oil products to 10 per cent from 8 per cent across all sectors.

Within minutes, car manufacturers announced that they would hike prices while government officials said that petrol and diesel would cost Rs 2.67 and Rs 2.58 more per litre, respectively, from midnight tonight.

Perhaps, Mukherjee wanted to create more demand by giving more tax concessions and provide more money in consumers' hand so that they buy more and boost the industry and economy.

Prices of consumer durables and electronic items are set to go up, although mobile handsets made in India and accessories will see price cuts with the government providing exemption in customs duty on import of key components.

The Finance Minister also increased excise on petrol and diesel by Re one per litre, following which duty on branded petrol will now be Rs 15.5 per litre and that of branded diesel will be 5.75 per litre. Non-branded petrol will attract duty of 14.35 per litre and that of diesel will be 4.60 per litre.

At least nine Indians killed in Kabul suicide attacks

At least nine Indians were among 16 people killed as Taliban suicide bombers carried out a string of attacks in the heart of Kabul, in yet another incident targeting Indian interests in Afghanistan.

The bombers struck at a number of guest houses, particularly at Park Residence, rented out by the Indian embassy for its staffers and those linked to India's developmental work in Afghanistan.

Describing it as a "heinous terrorist attack," External Affairs Minister S M Krishna said as per the preliminary information provided by Afghan Government officials, "up to nine Indians... have lost their lives".

"A few Indians have been injured, most of whom are reported to be out of danger. Arrangements are being made for their adequate and expeditious treatment, if necessary, by evacuating them to India," he said in a statement.

The Indians, who died in the incident included embassy staffers from consulates in Herat and Kandahar, a member of a medical mission and Government officials, embassy sources said without giving their identity or breakup.

They said 12 Indians were also injured in the attack which also killed an Italian diplomat, a French tourist and a number of policemen.

This is the fourth attack targeted at Indians in Kabul since July 2008 when 60 people, including four Indian embassy officials, were killed in a massive car bomb attack on the embassy building.

India and Afghanistan had pointed the finger at Pakistan for the July 2008 attack on the embassy, with reports suggesting that the Haqqani network had carried out the strike.

Strongly condemning the attack, Afghan President Hamid Karzai said it would not be allowed to hurt Afghan-Indian relations. "Attacks on Indian citizens will not affect relations between India and Afghanistan," he said.

In a statement, Karzai said he "strongly condemns" the terrorist attacks that occurred targeting two guesthouses in central Kabul where most of the guests were Indians.

Krishna termed the attacks as "barbaric" and a matter of "deep concern" and said they were clearly aimed against the people of India and Afghanistan.

"These are the handiwork of those who are desperate to undermine the friendship between India and Afghanistan, and do not wish to see a strong, democratic and pluralistic Afghanistan," he said.

Kasaif, an employee of the Indian embassy staying at the guest-house said the attack came in the early morning. "We locked our rooms and stayed inside as the premises was rocked by gunfire," he said.

Business News

Union Budget 2010: Winners and losers

India needs to review public spending and improve its fiscal position, Finance Minister Pranab Mukherjee said on Friday, kicking-off the presentation of his budget for the fiscal year that starts on April 1.

Following are the major sectors that are likely to gain or lose from the proposals of the budget:

WINNERS:

* Construction and engineering companies such as Larsen & Toubro, GMR Infrastructure, Jaiprakash Associates and Gammon Infra on proposal to invest 1.73 trillion rupees ($7.4 billion) on infrastructure in 2010/11.

The capital good index was up 1.8 per cent by 0804 GMT, in line with the rise in the broader market.

* Real estate firms such as DLF, Unitech and Sobha Developers after the budget proposed to give developers tax deductions on existing projects and relaxed norms for built-up area. The sector index was up 4.8 per cent.

* Drugmakers such as Dr Reddy's Laboratories, Cipla and Biocon after weighted deduction on in-house research and development expenses was proposed to be raised to 200 per cent from 150 per cent now.

* Hospitality services providers such as Indian Hotels, EIH and Taj GVK Hotels on proposal to allow firms setting up new two-star and above hotels to claim investment-linked tax deduction.

* State-run bank shares such as State Bank of India, Andhra Bank, Canara Bank and Bank of India on proposal to provide 165 billion rupees ($3.6 billion) for recapitalisation. The sector index was up 3.3 per cent.

* Education service providers such as Educomp Solutions, NITT and Aptech after the budget increased allocation to the education sector to 1.38 trillion rupees in the union budget.

LOSERS:

* Outsourcers such as Infosys Technologies, Tata Consultancy Services and Wipro on no mention of extension of a tax holiday scheme for software firms in the budget speech. The tax break ends in March 2011. The sector index was flat in a firm market.

* Cigarette makers such as ITC after the budget proposed to raise excise duty on tobacco products. Shares in ITC was down 3.6 per cent, after having fallen as much as 4 per cent earlier.

Fuel prices to rise by up to Rs 2.67/litre

New Delhi: Petrol and diesel prices will go up by Rs 2.67 a litre and Rs 2.58 per litre, respectively, after Finance Minister Pranab Mukherjee on Friday raised customs and excise duties on the two, virtually putting the Kirit Parikh Committee report on fuel price in cold storage.

Customs duty on petrol and diesel were hiked to 7.5 per cent from 2.5 per cent while excise duty was raised by Re one a litre to Rs 14.35 and Rs 4.60 per litre on non-branded (normal) petrol and diesel respectively.

The incidence of customs and excise duty would result in petrol prices going up by Rs 2.67 a litre in Delhi and diesel by Rs 2.58 per litre with effect from midnight tonight.

Petrol, in Delhi currently costs Rs 44.72 a litre and diesel Rs 32.92 per litre.

Mukherjee also imposed 5 per cent import duty on crude (currently nil), a move that would impact refiners like Reliance Industries and Essar Oil with their input cost going up.

Reliance Industries' 33 million tons a year refinery catering to domestic market would alone have to bear Rs 5,100 crore because of higher rates. Its other 29 million tons unit is only for exports and does not pay customs duty.

The rates hike virtually put the Parikh report on fuel pricing reforms in cold storage as implementing the expert group report on freeing petrol and diesel prices would mean a further Rs 4.94 a litre increase in petrol and Rs 3.20 per litre hike in diesel rates.

Sports News

We have improved in avoiding last-gasp goals: Rajpal

New Delhi: India has improved a lot in sorting out the old malaise of conceding last-minute goals and it would help the home side in reaching the semifinals of the hockey World Cup starting on Sunday, captain Rajpal Singh said on Friday.

"It (conceding last-gasp goals) has to do with the mental aspect. We have worked on this aspect and I think we are improving," he said after the pre-tournament press conference here.

"Instead of the opposition putting pressure on us at the closing stages of a match we have started scoring. We scored last-gasp goal at Salta (Argentina) during the Champions Challenge I late last year," he added.

Rajpal said his side's target would be to reach the semifinals and hoped from there they can win the title.

"Our target is to reach the semifinals and see from there what happens. Once you reach the semifinals it will be anybody's game (to lift the title). We have prepared very well and we are focused," he said.

Asked if the pressure of expectation would weigh down his side, Rajpal said, "It (pressure) is good. It will give us motivation to do well in front of home crowd. If we do well and at least reach the semifinals it will give a big boost to Indian hockey."

Latest News of India

Tendulkar rewrites history, hits first double ton in ODIs

New Delhi: Milestone man Sachin Tendulkar re-wrote the record books on Wednesday, hammering the first double century in the history of one-day cricket to add another feather to his well-adorned cap.

The capacity crowd at the Captain Roop Singh Stadium witnessed history on Wednesday as Tendulkar, statistically the greatest batsman the game has ever seen, pushed a Charl Langeveldt delivery through the off-side and ran a single to achieve a feat which no other cricketer has achieved.

One Day International cricket, since its 1971 inception, had to wait nearly four decades to see a batsman score 200. The previous best mark was shared by Zimbabwean Charles Coventry (194 not out) and Pakistan's Saeed Anwar (194).

As the crowd erupted with unbridled joy, Tendulkar, tired but composed, took off his helmet, looked skyward, closed his eyes to offer a silent prayer.

His captain Mahendra Singh Dhoni came down from the striker's end to shake hands and hug him. And as Tendulkar set on his way back to the pavilion after the completion of the Indian innings, a tumultuous celebration greeted him.

The crowd gave him a standing ovation as the entire stadium erupted in euphoria while his teammates were simply ecstatic as they clapped and hugged each other, basking in the glory of their senior teammates.

Tendulkar batted like a man with a mission today and the South African bowlers simply had no clue where to bowl. Once he crossed the 150-mark, the crowd anticipated something special and Tendulkar did not let them down.

A six off Roelof van der Merwe took him past Kapil Dev's 175 not out and in the next over, he hit Jacques Kallis for a four to equal his previous best of 186 not out that had come against New Zealand in Hyderabad in 1999.

The crowd got restless as Tendulkar approached the

194-run mark and a couple off Wayne Parnell saw him eclipse it.

His teammates and spectators were on the edge of their seat with a double century round the corner but with Dhoni going berserk at the striker's end and facing most of the deliveries; it was an agonising wait for all.

Dhoni took singles off the final deliveries of the

47th-49th overs and Tendulkar finally took strike with four balls left in the innings. The first ball he received from Langeveldt was steered past point and Tendulkar ran for a single to remain unbeaten after an unforgettable unbeaten 200 that came off just 147 balls with 25 fours and three sixes in it.

It was yet another milestone for the man, who has some 30,000 international runs under his belt, including 93 centuries (47 in Tests and 46 in ODIs).

President, PM congratulate Sachin for first double ton in ODIs

New Delhi: President Pratibha Patil and Prime Minister Manmohan Singh on Wednesday congratulated Sachin Tendulkar for becoming the first cricketer to score a double ton in one-day internationals and said the "master batsman" has climbed the "Mt Everest of the game".

"Sachin Tendulkar has yet again re-written the record books of cricket, by climbing yet another Mt Everest of the game," Patil said in a message. She said in setting a new benchmark for the highest score by a batsman in one-day internationals as well as in notching up a double century, "the master batsman has set stiff targets" for future generation of cricketers to break.

Terming it a "magnificent achievement", the Prime Minister said that Sachin has led by "example and that all Indians are proud of his achievement". Singh wished him many more glorious years in his cricketing career.

36-year-old Tendulkar today created history by becoming the first cricketer to score a double century in one-day internationals with a breath-taking unbeaten 200 to steer India to a massive 401 for three against South Africa in the second cricket ODI in Gwalior.

Tendulkar a role model for world cricket: Pak players

Karachi: Former and present Pakistani players on Wednesday paid rich tribute to Sachin Tendulkar for becoming the first batsman in the history of the game to score a double hundred in one-dayers and said he is the perfect "role model" for any cricketer.

"For any cricketer he is the perfect role model. The great thing about him is that he has been outstanding in both Tests and ODIs. As a Pakistani player, I know how much value we have always put on his wicket," right-handed batsman Shoaib Malik said about the batting maestro.

Former skipper and wicketkeeper Rashid Latif said the feat was no surprise to him as it was only a matter of time for Tendulkar to achieve it.

"I always expected him to be the first one to score 200 in ODIs, but I was surprised that he took so long," Latif said.

Another former captain Aamir Sohail said, "The rule is simple when you give respect to the game, then only the game will give you respect."

Batting great Javed Miandad said he had always asked Pakistani cricketers to admire Tendulkar for his down to earth attitude, hard work and passion.

"Records are there to be broken but it makes you happy when someone like Tendulkar does it. I think he thoroughly deserves this record and many more in days to come," he said.

J&K: Militant emerges alive from debris, kills jawan before being shot dead

SRINAGAR: A militant, believed to have been killed in the gunbattle at Chinkipora in Sopore, emerged alive from the debris on Wednesday and began firing on security personnel searching for the bodies of slain ultras, killing a jawan but was shot dead in retaliatory fire.

The militant, who is yet to be identified, was killed as the security forces fired back after he began firing indiscriminately injuring a jawan who later died at a hospital, official sources said.

Earlier, body of a militant was recovered from the rubbles of three houses that were destroyed in the gunbattle yesterday.

"Body of an unidentified militant and a weapon was recovered from the debris of the houses earlier today", police sources said.

Terming the heap of rubble at the the scene of the encounter as huge, they said it may take days even for the machines to remove it.

The operation to retrieve the bodies of the militants, who were said to have been killed in the day-long gunbattle yesterday, resumed this morning.

Three armymen, including a captain, were killed in the gunbattle with the militants hiding in three houses at Chinkipora, 55 kms from here, yesterday.

The deceased ary personnel were identified as Captain Davinder Singh Jass, Naik Selva Kumar and Paratrooper Imtiyaz Ahmad Thokar of first Para.

Besides, a civilian identified as Ramiaz Ahmad Malla, who was hit by a stray bullet while being evacuated from the scene, is being treated at a hospital in Srinagar.

Concessions for passengers in Mamata's rail budget

NEW DELHI: The Railway Budget for 2010-11 on Wednesday proposed no increase in passenger fares and freight rates while reducing the tariff by Rs 100 per wagon in transportation of foodgrains, kerosene and fertilisers to tackle the price rise.

The budget, presented by Railway Minister Mamata Banerjee in the Lok Sabha, also proposed to reduce the maximum limit of service charge on e-booking of tickets to Rs 10 for sleeper class and Rs 20 for AC class. The present maximum charge is Rs 15 and Rs 40 respectively.

This is the seventh year in a row that passenger fares have not been raised.

Announcing a slew of concessions for passengers, Banerjee proposed free travel for cancer patients going for treatment in three-tier AC and sleeper class and continuance of concessions for students of madrassas and journalists.

The minister said 101 new suburban services will be introduced in Mumbai and more services will be launched in Kolkata and Chennai.

A special train 'Sanskriti Express' to mark the 150th birth anniversary of Rabindranath Tagore will run across the country and also to Bangladesh.

Special tourist trains called 'Bharat Teerth' will be started on 16 routes while six long-distance non-stop Duronto Express and four short-distance Duronto day trains will be introduced, the railway minister said.

Referring to hardships faced by people because of the high food prices, Banerjee said, "I understand their distress. Despite Railways' own tight resource position I announce reduction of Rs 100 per wagon in freight charges for foodgrains for domestic use and kerosene. This is a small gesture to express our concern."

While ladies special trains would be renamed 'Matribhoomi Specials', three unreserved trains named 'Karambhoomi specials' would be introduced along with new weekly express service 'Janmabhoomi Express' between Ahmedabad and Udhampur.

New services to be introduced include 54 trains, 28 new passenger services, nine MEMU and eight DEMU services. The routes of 21 trains will be extended and the frequency of 12 trains increased.

Other new projects include preliminary engineering-cum- traffic survey for north-south, east-west, east-south and south-south dedicated freight corridors.

Six high-speed passenger train corridors have been identified to be executed through public-private partnership mode and a national high-speed rail authority will be set up for planning, implementing and monitoring these projects.

The financial performance in 2009-10 shows that the loading target of 882 million tonnes is likely to be surpassed by eight million tonnes.

Gross traffic receipts for 2009-10 have been kept at Rs 88,356 crore -- an increase of 10.7 per cent. The full impact of sixth pay commission has been fully absorbed within the railway resources and the current dividend liability will be fully discharged. Annual plan has been kept at Rs 40,284 crore, Banerjee said.

Earlier, Mamata started her speech in the Lok Sabha saying, "Our objective is inclusive growth," adding that her main consideration in this year's budget was social responsibility rather than mere commercial viability of projects.

"We have set our goals in the Vision 2020 document and we will achieve it," the minister said, referring to the document unveiled in December that has targeted making over 30,000 km of routes into double or multiple lines against 18,000 km today.

"It is a fact that administrative and procedural delays discourage potential investors. We will need to overcome this. I am setting up a special task force for this," she said.

"Special structure will be created for the new business model," she said. "But we will not privatise our railways. Indian Railways will remain with the government."

At the same time, she also asked the private sector to refrain from what she called "typical negative approach" while dealing with the Indian Railways. "I am sorry to say this, this mindset has to change."

Prime Minister Manmohan Singh, United Progressive Alliance (UPA) chairperson Sonia Gandhi, Leader of Opposition Sushma Swaraj and finance minister Pranab Mukherjee were among those in the house, presided over by Speaker Meira Kumar.

This was Banerjee's fourth budget of her career as railway minister and the second for the United Progressive Alliance (UPA) government in its second straight term after being voted back to office in May last year.

According to Banerjee, 117 out of the 120 new trains promised in her last budget will be flagged off by March 31, within a matter of seven months, which was a commendable effort.

Seeking to give safety issues due consideration, the minister said there were a few cases of unfortunate accidents in the past and said these would be prevented by adopting the highest level of technology and manpower training.

"Within five years, we will have 13,000 out of unmanned level crossings manned - 3,000 this fiscal and 1,000 in the coming fiscal," she said, referring to the high number of accidents at such crossroads.

The budget came against the backdrop of the share of Indian Railways in the movement of goods, vis a vis truckers, falling from 24.07 percent in 2001-02 to 20.89 percent in 2008-09 and further to 19.32 percent in the first 10 months of this fiscal.

Indian Railways runs the world's second largest network under a single management with a network of 64,099 route km to ferry 18.9 million passengers on 7,000 trains daily from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonnes of cargo.

Business News

New Delhi: Indian Railways will earn a profit of Rs 951 crore in 2009-10, down 93 per cent from the 2007-08 level.

While the 2009-10 Railway Budget presented in July last year projected profits at Rs 2,642.26 crore, the estimate has been revised downwards by 64 per cent to Rs 951.03 crore.

For the next fiscal, the budget estimates a profit of Rs 3,173.09 crore.

India's largest employer that employs 14 lakh people had registered a record profit of Rs 13,431.09 crore in 2007-08.

From FY'08 to FY'10, the fall in profit is 93 per cent, as per the Railway Budget presented in Parliament on Wednesday.

Profits had started showing a decline even in 2008-09, when it come down to Rs 4,456.78 crore. Year-over-year the fall in profit is about 79 per cent.

Gross traffic receipts have consistently risen since fiscal 1951-52, the year from which the statement showed financial figures for the Indian Railways.

The revised estimates puts gross traffic receipts at Rs 88,355.91 crore for 2009-10, and the budgetary estimate for the next fiscal's gross traffic receipts is Rs 94,764.95 crore, the Railway Budget paper said.

India Inc pleased with rail budget

New Delhi: India Inc welcomed the Railway Budget for sparing freight and passenger fares from any hike and said that it also provided opportunities for private sector to participate in the world's fifth largest transport network.

"I think it provides for much bigger involvement of the private sector...it is welcome," FICCI President Harsh Pati Singhania said.

Assocham described it as "people and industry friendly" since there is no increase in passenger and freight rates.

Presenting the Railway Budget for 2010-11, Railway Minister Mamata Banerjee asked business houses to build partnerships with Railways that employs about 14 lakh people.

A special task force will be set up for early clearance of projects, Banerjee said, adding that Railways will start six water bottling plants in places like Ambala, Farakka, Nasik, Thiruvananthapuram and Amethi to provide clean and cheap drinking water to passengers.

Railways would also develop 10 automobile hubs, she said.

CII Director General Chandrajit Banerjee said: "It is our belief that this would give the right signals to investors in India and abroad to look at Indian Railways in a new light."

However, Assocham President Swati Piramal said: "A clear roadmap for seeking private partnership in railways for it's modernisation and expansion should have been rolled out."

Federation of Indian Mineral Industry Secretary General R K Sharma too termed the Budget as "positive".

Mamata woos corporates, rules out privatisation

New Delhi: Railway Minister Mamata Banerjee on Wednesday presented the Railway Budget 2010-11 in the Parliament, saying that her ministry has come out with ''Vision 2020'' to modernise the railway network.

"I prefer social responsibility to economic responsibility, she said.

Banerjee said, the railways need to catch up with the advanced western nations, adding that the policy guidelines would be made easier and hassle-free.

Railways will not be privatized, she said, adding that in the next five years the whole country would be connected by rail.

Banerjee called on the India Inc to build partnership with the Railways.

The minister announced that the exams for the recruitment in Railway would be conducted in the regional languages as well, adding that English, Hindi, Urdu and other regional languages will be used for Railway entrance exams.

Banerjee said that we have kept our earlier promises and out of 120 trains that were proposed by our ministry, 107 trains were started on time.

She announced that six-bottling points would be set for manufacture of water that will be supplied, adding that the food that is provided to the passengers has also improved over the years.

Village panchayats, hospitals and court would have a e-ticket counter proposed Banerjee, adding that a railway counter would also be set up at the office of the District Magistrate.

Railway is all determined to ensure safety measures, she claimed adding that a ''chowkidaar'' would be placed at every railway crossing in the next five years.

Indian Railways to introduce double-decker trains

New Delhi: Railway Minister Mamata Banerjee on Wednesday announced that the Indian Railway would introduce double-decker train-sets as a pilot project.

Presenting the Railway Budget for the year 2010-2011 in the parliament here, Banerjee said: “Double-decker train-sets matching the best in global standards will be introduced in two trains each from Delhi and Kolkata as a pilot project.”

Declaring that passenger amenities are a very high priority of the Government, she said that a number of initiatives are being taken for this purpose. “Modern trolleys at all important stations with uniformed attendants will be introduced to assist senior citizens and women passengers for carrying their luggage,” Banerjee said.

The Railway Budget also proposed to initiate SMS updates of reservation status and movements of wagons to freight customers. Mobile vans for issuing e-tickets will be extended to government medical college hospitals, court complexes, University campus, IT hubs, IITs and IIMs.

Banerjee also announced that railway reservation ticket centres would also be opened at district headquarters and village panchayats to give more facility to common man.

In order to bring more transparency in freight business, Banerjee announced RFID technology will be introduced for tracking of wagons, allotment of the rakes would be accessible through the web.

Highlighting efforts being made for safety and security of the passenger, Banerjee said the railway is developing crashworthy coaches and locomotives and will provide automatic fire and smoke detection system in 20 pairs of long-distance trains as pilot project.

She announced that manning of further 1,000 level crossing will be taken up during the budget year and added that in coming five years, all the unmanned level crossing will be manned. To assure full security to women passengers, Banerjee announced that formation of 12 companies of women Railway Protection Force (RPF), named “Mahila Vahini.”

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'Union Budget is sour, trepid and unimpressive'

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.