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UNIONBUDGET2013-14

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The Union Budget is the financial annual reportof India as a country.

It contains the government of India's revenueand expenditure for the end of a particular fiscal

year, which runs from April 1 to March 31

It comprises the revenue budget and the capitalbudget.

It also contains estimates for the next fiscalyear.

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The Finance Minister (FM) delivered a carefully crafted budget

on Thursday, 28th Feb, 2013 that sought growth.

Presented under the shadow of major challenges facing the

Indian economy like slowdown in growth, high inflationary

trends, ever increasing fiscal deficit, low saving/investment and

looming threat of low credit rating.

The FM must be accredited to present a bold budget even

when elections are about an year or so away.

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Highlights

No changes in income tax rates or slabs.

Tax credit of Rs. 2,000 for income up to Rs. 5 lakh.

Surcharge of 10 per cent for taxable incomes above Rs. 1

crore, to augment revenue.

5 to 10 per cent surcharge on domestic companies whosetaxable income exceeds Rs 10 crore.

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For foreign companies, the surcharge will increase from 2 per

cent to 5 per cent.

An additional tax break of 1 lakh on interest payment apart from

the current 1.5 lakh on a housing loan of less than 25 lakh.

Rate of abatement on homes and flats of above 2,000 square

feet, or costing Rs 1 crore and above, being reduced from 75%

to 70%.

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Excise duty on non-taxi SUVs to be increased to 30 per centfrom 27 per cent.

Custom duty on imported luxury cars has been raised to 100%

from 75% now.

Custom duty on imported motorcycles with engine capacity of

more than 800cc also goes up to 75% from 60% at present.

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Custom duty on raw silk has been increased by 10%.

Zero excise duty on cotton and yarn at the garment stage.

Custom duty on precious and semi-precious stones has been

cut from 10 to 2%.

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Gold import duty unchanged.

Duty free gold limit increased to Rs. 50,000 for a male

passenger and Rs. 1,00,000 for a female passenger subject toconditions.

Rise on excise duty from the current 1% to 6% on mobilephones costing more than Rs 2,000.

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Excise duty on marbles has been doubled to Rs 60 per square

meter.

Home furnishing items such as handmade carpets or coir and

jutes will be exempted form excise duty.

Custom duty on imported set-top boxes, or STBs, has been

raised by 5%.

Excise duty raised by 2% to 18% in excise duty on cigarettesand cigars.

Service tax on all A/C restaurants.

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SC, ST, Women and Children

Rs 41,561 crore for SC Sub Plan and Rs 24,598 crore for TribalPlan.

97,134 crore allocated for programmes relating to women and

77,236 crore allocated for programmes relating to children.

An additional sum of Rs 200 crore proposed to be provided to

the Ministry of Women and Child Development to address the

concerns of vulnerable groups, including single women andwidows.

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For Women

An all-women bank by November 2013 with an initial capitalof Rs 1,000 crore

Rs 1,000 crore Nirbhaya Fund, named after Delhi gangrapevictim, to empower women

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Minority

An allocation of Rs 3511 crore to Ministry of Minority Affairs, an

increase of 12 per cent over the BE and 60 per cent over the

RE of 2012-13.

Disabled A sum of 110 crore to the Department of Disability Affairs for

ADIP scheme in 2013-14 against RE 2012-13 of ` 75 crore.

Eligibility cap on life insurance premiumsraised to 15% for

policyholders with disabilities or specified ailments.

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Health and Education

37,330 crore allocated to the Ministry of Health & Family

Welfare.

4,727 crore for medical education, training and research.

Ayurveda, Unani, Siddha and Homoeopathy are being

mainstreamed, 169 crore allocated.

Allocation of 1,069 crore to Department of AYUSH(Ayurveda,

Yoga and Naturopathy, Unani, Siddha and Homoeopathy)

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Integrated Child Development

Services (ICDS)

Allocation of 17,700 crore in 2013-14, an increase of 11.7

percent. The focus will continue to be on early childhood care

and education.

Allocation of 300 crore in 2013-14 for a multi-sectoral

programme aimed at overcoming maternal and child

malnutrition. To be implemented in 100 districts during 2013-14

and in 200 districts the year after.

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Drinking Water

15,260 crore allocated to Ministry of Drinking Water and

Sanitation.

1,400 crore provided for setting-up of water purification plants in2000 arsenic-affected and 12000 fluoride-affected rural

habitations.

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Jawaharlal Nehru National Urban

Renewal Mission

Rs 14,873 crore for JNNURM for urban transportation in 2013-

14 against Rs 7,880 crore in the 2012-13

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Agriculture

27,049 crore allocated to Ministry of Agriculture, an increase of

22 per cent over the 2012-13.

Agricultural credit kept at 7 lakh crore for 2013-14 compared toRs 5.75 lakh crore in the current year.

Eastern Indian states to get Rs 1,000 crore allocation for

improving agricultural production.

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500 crore allocated to start a programme of crop diversification.

A provision of 307 crore made for the National Livestock

Mission.

Additional provision of Rs. 10,000 crore for National FoodSecurity Act.

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Investment

Income limit for the tax-saving Rajiv Gandhi Equity Savings

Scheme is raised to Rs. 12 lakh from Rs. 10 lakh.

Additional deduction of interest up to Rs. 1 lakh for a person

taking first home loan up to Rs. 25 lakh during the period

1.4.2013 to 31.3.2014.

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Infrastructure

Infrastructure tax-free bond of Rs. 50,000 crore.

3000 km of road projects in Gujarat, Madhya Pradesh,

Maharashtra, Rajasthan and Uttar Pardesh in the first 6

months.

Companies investing Rs. 100 crore or more in plant and

machinery during the period 1.4.2013 to 31.3.2015 will be

entitled to deduct an investment allowance of 15 per cent of theinvestment.

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Industry

Two new major ports will be established in Sagar, West Bengal

and in Andhra Pradesh to add 100 million tonnes of capacity.

Technology Upgradation Fund Scheme (TUFS) for textile tocontinue in 12th Plan with an investment target of Rs. 1,51,000

crore.

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Proposal to move from the present profit sharing mechanism torevenue sharing for oil and gas exploration.

Adoption of a policy of pooled pricing for coal.

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Finance Rs. 14,000 crore will be provided to public sector banks for

capital infusion in 2013-14.

All branches of public sector banks to have ATM by 31.3.2014.

Proposal to set up Indias first Womens Bank as a public sector

bank. Provision of Rs. 1,000 crore as initial working capital.

Insurance companies can now open branches in Tier 2 citiesand below without prior approval.

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All towns of India with a population of 10000 or more will have

an LIC branch and one other public sector insurance company.

SEBI will simplify the procedures and prescribe uniform

registration and other norms for entry for foreign portfolio

investors.

Investor has a stake of 10 per cent or less in a company -

treated as FII. Investor has a stake of more than 10 per cent -

treated as FDI.

SMEs, permitted to list on the SME exchange without being

required to make an IPO.

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Others

A grant of Rs. 100 crore to 4 institutions of excellence viz.Aligarh MuslimUniversity, Banaras Hindu University, Tata

Institute of Social Sciences Guwahati and Indian National Trust

for Art & Culture Heritage.

All cities of population of more than 1,00,000 will be covered by

private FM radio services.

Provision of Rs. 4,909 crore to modernize the postal network.Post offices to become part of the core banking solution and

offer real time banking services.

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Estimates Plan expenditure - Rs. 5,55,322 crore.

Non Plan Expenditure - Rs. 11,09,975 crore.

Fiscal deficit - 4.8 per cent.

Revenue deficit - 3.3 per cent.

Revenue of 133 billion rupees through direct tax proposals and47 billion rupees through indirect tax proposals.

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Gross market borrowing - Rs. 6.29 trillion

Net market borrowing - Rs. 4.84 trillion

Short-term borrowing - Rs. 198.44 billion

Major subsidies bill - Rs. 2.48 trillion

Petroleum subsidy - Rs. 650 billion

Food subsidies - Rs. 900 billion

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Implications Reason to cheer for first time home buyers.

Boost to the real estate and allied sectors.

Reason to be sad for car and motorcycle buyers.

Not so good news for the super rich.

Small relief for taxpayers.

Tax savings of aggregate Rs 3,600 crore approximately to 1.8

crore tax payers should be generated.

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Investment in RGESS made more attractive. It would

encourage channelizing the savings of small taxpayers into thecapital market.

Reason to be sad for those planning to purchase SUVs as well

as for cigarette and cigar users.

Women empowerment and safety.

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Good news for gold buyers.

Analysts said the FM has quietly ensured that India's finances

are in shape and the economy gets back on track. The markets

may have been unimpressed by the budget, but the aamaadmi walked out with a better deal.

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For an average Indian household, the impact of the budget is

fairly neutral. It remains to see how many of these proposalsactually convert into legislation and, thereafter, achieve their

desired objective of enhancing growth development.

The budgets impact is not going to show very soon but arechance of proving quite fruitful in the later periods.