Highlights of Union Budget 2010

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  Highlights of Union Budget 2010-2011 New Delhi: Finance minister Pranab Mukherjee began presenting the Union budget for 2010-11 in theLok Sabha today after the Cabinet approved the document. Here are some of the highlights of hisbudget speech. y   The Indian economy was facing grave uncertainty. Growth had started decelerating whenthe interim and full budget for 2009-10 were presented. y   A t home there was added uncertainty because of subnormal southwest monsoon. y   Y et, the economy now in a far better position than it waseight years ago. y   India weathered the economic crisis well and emerged from the global slowdown faster than any other country. y   F irst challenge before the government is to quickly revert tohigh GDP growth path of 9%. y   Ex  pects 10% economic growth in the near future. y   S econd challenge is to harness economic growth to make it more inclusive andconsolidate gains. y   Third challenge is to overcome weakness in government's public delivery mechanism; along way to go in this. y   Impressive recovery in the past few months. Can witnessfaster recovery in the coming months. y   F ood security has been strengthened. y   B ut bottleneck of the public delivery mechanism can hold us back. y   F iscal year 2009-10 was challenging for the economy. y   F ocus shifted to non-governmental actors and an enabling government. Government nowconcentrates on supporting and delivering services to the poorer sections. y   E conomy stabilised in the first quarter of 2009 itself. y   18.5% manufacturing growth in December was the highest in two decades. y   F igures for merchandise e x  ports for January encouragingafter turnaround in November and December last year. y   Double digit food inflation last year due to bad monsoonand drought-like conditions. y   Government conscious of the price rise and taking steps to tackle it. y   E rratic monsoon and drought-like conditions forced supply-side bottleneck that fuelledinflation. y    Need to review stimulus imparted to economy last year to overcome the recession. y    Need to ensure that the demand-supply imbalance is managed. y    Need to make growth more broad-based. y    Need to review public spending and mobilise resources. y   S tatus paper on public debt within si x months. y   Government hopes to implement direct ta x code from A  pril 2011. y   E arnest endeavour to implement general sales ta x in A  pril 2011. y   Government will raise Rs25,000 crore from divestment of its stake in state-owned firms.  y   K  irit Parekh report on fuel price deregulation will be taken up by petroleum minister Murli Deora in due course. y    Nutrient-based fertiliser subsidy scheme to come into force from A  pril 1 this year. y    Nutrient-based fertiliser subsidy will reduce volatility of subsidy and also reduce it. y   Market capitalisation of five public-sector undertakings listed since October increased by3.5 times. y   F DI inflows steady during the year. Government has takenseries of steps to simplify F DI regime. Intends to make F DI policy user friendly bycompling all guidelines into one document. y   Government has decided to set up ape x -level F inancial S tability and Development Council. y   R  B I considering issuing banking licences to private companies. Non-banking financecompanies will also be considered if they meet the criteria. y   Government to provide Rs16,500 crore to public-sector  banks to maintain tier-I capital. y   Government to continue interest subvention of 2% for one more year for e x  ports coveringhandicrafts, carpets,handlooms and small and medium enterprises. y   Government to provide Rs300 crore to organise 60,000 pulse and oilseed villages and provide integrated intervention of watershed and related programmes. y   Rs200 crore provided for climate-resilient agricultureinitiative. y   Government committed to ensuring continued growth of special economic zones. y    Need to take firm view on opening up of the retail sector. y   Deficit in foodgrains storage capacity to be met with private-sector participation. y   Period for repayment of loans by farmers e x tended by si x months to June 30, 2010, inview of the drought and floods in some parts of the country. y   Interest subvention for timely repayment of crop loans raised from 1% to 2%, bringingthe effective rate of interest to 5%. y   Road transport allocation raised by 13% to Rs19,894 crore. y   Proposal to maintain thrust of upgrading infrastructure in rural and urban areas. II F CLauthorised to refinance infrastructure projects. y   Rs1,73,552 crore provided for infrastructure development. y   A llocation for railways fi x ed at Rs16,752 crore, an increase of Rs950 crore over the lastfinancial year. y   Government proposes to set up Coal Development Regulatory A uthority. y   Mega power plant policy modified to lower cost of generation; allocation to power sector more than doubled to Rs5,130 crore in 2010-11. y   Government favours competitive bidding for coal blocks for captive power plants. y   Rs500 crore allocated for solar and hydro projects for the Ladakh region in Jammu & K  ashmir. y   Clean E nergy F und to be created for research in new energy sources. y   A llocation for new and renewable energy ministry increased by 61% to Rs1,000 crore. y   One-time grant of Rs200 crore provided to Tirupur te x tile cluster in Tamil Nadu. y   A llocation for National Ganga River  B asin A uthority doubled to Rs500 crore.  y   A lternative port to be developed at S agar Island in West B engal. y   Draft of  F ood S ecurity B ill ready, to be placed in the public domain soon. y   Outlay for social sectors pegged at Rs1,37,674 crore, accounting for 37% of the total planallocation. y   Plan allocation for school education raised from Rs26,800 crore to Rs31,036 crore in2010-11. y   25% of plan outlay earmarked for rural infrastructure development. y   Plan allocation for health and family welfare increased to Rs22,300 crore from Rs19,534crore. y   F or rural development, Rs66,100 crore have been allocated. y   A llocation for National Rural E mployment Guarantee A uthority stepped up to Rs40,100crore in 2010-11. y   Indira A was Y ojana's unit cost raised to Rs45,000 in the plains and Rs48,500 in hillyareas. y   A llocation for urban development increased by 75% to Rs5,400 crore in 2010-11. y   1% interest subvention loan for houses costing up to Rs20 lakh e x tended to March 31,2011; Rs700 crore provided. y   A llocation for development of micro and small-scale sector raised from Rs1,794 crore toRs2,400 crore. y   Rs1,270 crore provided for slum development programme, marking an increase of 700%. y   Government to set up National S ocial S ecurity F und with initial allocation of Rs1,000crore to provide social security to workers in the unorganised sector. y   Government to contribute Rs1,000 per annum to eachaccount holder under the new pension scheme. y   Ex clusive skill development programme to be launched for te x tile and garment-sector employees. y   A llocation for woman and child development increased by 80% y   Plan outlay for the social justice ministry raised by 80% to Rs4,500 crore. y   Plan allocation for minority affairs ministry raised from Rs1,740 crore to Rs2,600 crore. y   F inancial- S ector Legislative Reforms Committee to be setup. y   Rs1,900 crore allocated for Unique Identification A uthority of India. y   A unique identity symbol will be provided to the rupee in line with the U S dollar, B ritish pound sterling, euro and Japanese yen. y   Defence allocation pegged at Rs1,47,344 crore in 2010-11against Rs1,41,703 crore in the previous year. Of this, capital e x  penditure would accountfor Rs60,000 crore. y   Planning Commission to prepare integrated action plan for  Na x al-affected areas to encourage misguided elements to eschew violence and join themainstream. y   Gross ta x receipts pegged at Rs7,46,656 crore for 2010-11, non-ta x revenues atRs1,48,118 crore. y   Total e x  penditure pegged at Rs11.8 lakh crore, an increase of 8.6%. y   F iscal deficit at 5.5%. y   F iscal deficit seen at 4.8% and 4.1% in 2011-12 and 2012-13, respectively.  y    Non-plan e x  penditure pegged at Rs37,392 crore and plan e x  penditure at Rs7,35,657 crorein budget estimates. Proposed increase of 15% in plan e x  penditure and 6% in non-plane x  penditure. y   Cash subsidy for fuel and fertiliser instead of previous practice of bonds to continue. y   F iscal deficit pegged at 6.9% in 2009-10 as against 7.8% in the previous fiscal. y   Government's net borrowing to be Rs3,45,010 crore for 2010-11. y   Income-ta x department ready with two-page S aral-2 returnsform for individual salaried assesses. y   Personal income-a x rates pruned:Income up to Rs1.6 lakh ² nilIncome above Rs1.6 lakh and up to Rs5 lakh ² 10%Income above Rs5 lakh and up to Rs8 lakh ² 20%Income above Rs8 lakh ² 30% y   A dditional deduction of Rs20,000 allowed on long-terminfrastructure bonds for income-ta x payers; this is above Rs1 lakh on savings instrumentsallowed already. y   Investment-linked ta x deductions to be allowed to two-star hotels anywhere in thecountry. y   Weighted deduction of 125% for payments to approved associations doing social andstatistical research. y   One-time interim relief to housing and real-estate sector. y   B usinesses with a turnover of up to Rs60 lakh and professionals earning up to Rs15 lakhto be e x empted from the obligation to audit their accounts. y   H ousing projects allowed to be completed in five years instead of four to avail of ta x   breaks. y   Revenue loss of Rs26,000 crore on direct ta x proposals. y   Central e x cise duty on all non-petroleum products raised to 10% from 8%. y   F M increases customs duty on crude oil to 5%, on diesel and petrol to 7.5%, and on other  petroleum products to 10%. y   S tructural changes in e x cise duties on cigarettes, cigars, and cigarillos. y   Clean energy cess of Rs50 per ton to be levied on coal produced in India. y   Concessional e x cise duty of 4% on solar cycle-rickshaws. y   B alloons e x empted from central e x cise duty. y   Customs and central e x cise proposals to result in a net revenue gain of Rs43,500 crore. y   More services to be brought under the service ta x net. y   Certain accredited news agencies e x empted from payment of service ta x . y    Net revenue gain from ta x proposals pegged at Rs20,500 crore.
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