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 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.
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.
"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."
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