Union Budget 2009-10, 2010-11, 2011-12

Group - 6

BUDGET ESTIMATE

2009

•Budget Estimates provide for a total expenditure of Rs.10,20,838 crore. Rs.6,95,689 crore under Non-plan and Rs.3,25,149 crore under Non Plan•Total expenditure in B.E. 2009-10 increased by 36 per cent over B.E. 2008-09.•Interest payments estimated at Rs.2,25,511 crore constituting about 36 per cent of Non-plan revenue expenditure in B.E. 2009-10.•Subsidies up from Rs.71,431 crore in B.E. 2008-09 to Rs.1,11,276 crore in B.E. 2009-10.

2010

•The Gross Tax Receipts are estimated at Rs. 7,46,651 crore. The Non Tax Revenue Receipts are estimated at Rs. 1,48,118 crore.•The total expenditure proposed in the Budget Estimates is Rs. 11,08,749 crore, which is an increase of 8.6 per cent over last year.•The Plan and Non Plan expenditures in BE 2010-11 are estimated at Rs. 3,73,092 crore and Rs. 7,35,657 crore respectively. While there is 15 per cent increase in Plan expenditure, the increase in Non Plan expenditure is only 6 per cent over the BE of previous year.

2011

•Gross Tax receipts are estimated at ` 9,32,440 crore. Non-tax revenue receipts estimated at ` 1,25,435 crore.•Total expenditure proposed at ` 12,57,729 crore. Increase of 18.3 per cent in total Plan allocation.•Increase of 10.9 per cent in the Non-plan expenditure.•Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to 5.1 per cent of GDP in RE 2010-11.•Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12. Fiscal Deficit to be progressively reduced to 3.5 per cent by 2013-14.

Cont……

2009

•Gross tax receipts budgeted at Rs.6,41,079 crore in B.E. 2009-10 compared to Rs.6,87,715 crore in B.E. 2008-09.•Non-tax revenue receipts estimated at Rs.1,40,279 crore in B.E. 2009-10 compared to Rs.95,785 crore in B.E. 2008-09.•Outlay for Defence up from Rs.1,05,600 crore in B.E. 2008-09 to Rs.1,41,703 crore in B.E. 2009-10.

2010

•Fiscal deficit for BE 2010-11 at 5.5 per cent of GDP, which works out to Rs.3,81,408 crore.•The rolling targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12 and 2012-13, respectively.

2011

•Net market borrowing of the Government through dated securities in 2011-12 would be ` 3.43 lakh crore.•Central Government debt estimated at 44.2 per cent of GDP for 2011-12 as against 52.5 per cent recommended by the 13th Finance Commission.

Challenges

2009

•To lead economy to high GDP growth rate of 9 per cent per annum at the earliest•To deepen and broaden the agenda for inclusive development•To improve delivery mechanisms of the government.

2010

•To quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the ‘double digit growth barrier’.•To harness economic growth to consolidate the recent gains in making development more inclusive.•To address the weaknesses in government systems, structures and institutions at different levels of governance.

2011

•Structural concerns on inflation management through stronger fiscal consolidation.•Implementation gaps, leakages from public programmes and the quality of outcomes pose a serious challenge.•Corruption as a problem to be fought collectively. Government to improve the regulatory standards and administrative practices.

Overview of the Economy

2009

•Growth rate of Gross Domestic Product dipped from an average of over 9 per cent in the previous three fiscal years to 6.7 per cent during 2008-09.•Whole sale price index rose to nearly 13 per cent in August, 2008 and had are equally sharp fall to zero per cent in March, 2009.•Contribution of the services sector to GDP at well over 50 per cent and share of merchandise trade doubling to 38.9 per cent of GDP in 2008-09.

2010

•The Advance Estimates for Gross Domestic Product (GDP) growth for 2009-10 pegged at 7.2 per cent. The final figure expected to be higher when the third and fourth quarter GDP estimates for 2009-10 become available.•The growth rate in manufacturing sector in December 2009 was 18.5 per cent – the highest in the past two decades.•A major concern during the second half of 2009-10 has been the emergence of double digit food inflation.

2011

•Gross Domestic Product (GDP) estimated to have grown at 8.6 per cent in•Monetary policy measures taken expected to further moderate inflation in coming months.•Exports have grown by 29.4 per cent, while imports have recorded a growth of 17.6 per cent during April to January 2010-11 over the corresponding period last year.•Indian economy expected to grow at 9 per cent with an outside band of +/- 0.25 per cent in 2011-12.

Infrastructure Development

2009

•IIFCL to refinance 60 per cent of commercial bank loans for PPP projects in critical sectors over the next fifteen to eighteen months. IIFCL and Banks are now in a position to support projects involving total investment of Rs.1,00,000 crore.•NHAI - increased by 23 per cent•Railways - from Rs.10,800 crore in Interim B.E. 2009-10 to Rs.15,800 crore in B.E. 2009-10.

2010

•Rs 1,73,552 crore provided for infrastructure development which accounts for over 46 per cent of the total plan allocation.•Rs 16,752 crore provided for Railways, which is about Rs.950 crore more than last year.•IIFCL’s disbursements are expected to touch Rs 9,000 crore by end March 2010 and reach around Rs 20,000 crore by March 2011.

2011

•Allocation of ` 2,14,000 crore for infrastructure in 2011-12. This is an increase of 23.3 per cent over 2010-11. This also amounts to 48.5 per cent of total plan allocation.•IIFCL to achieve cummulative disbursement target of ` 20,000 crore by March 31, 2011 and ` 25,000 crore by March 31, 2012.•Under take out financing scheme, seven projects sanctioned with debt of 1,500 crore. Another ` 5,000 crore will be sanctioned during 2011-12.

Agriculture

2009

•Target for agriculture credit flow set at Rs.3,25,000 crore for the year 2009-10.•In 2008-09 agriculture credit flow was at Rs.2,87,000 crore.•Interest subvention scheme for short term crop loans up to Rs.3 lakh per farmer at the interest rate of 7 per cent per annum.•Time given to the farmers having more than two hectares of land to pay 75 per cent of their over dues under Debt Waiver and Debt Relief Scheme extended from 30th June, 2009 to 31st December, 2009.

2010

•Rs. 400 crore provided to extend the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengall.•Rs. 300 crore provided to organise 60,000 “pulses and oil seed villages” in rain-fed areas.•Banks - agriculture credit flow For the year 2010-11, the target has been set at Rs.3,75,000 crore.•Incentive of additional one per cent interest subvention to farmers who repay short-term crop loans as per schedule, increased to 2% for 2010-11.

2011

•Allocation of ` 300 crore for implementation of vegetable initiative to provide quality vegetable at competitive prices.•Credit flow for farmers raised from ` 3,75,000 crore to ` 4,75,000 crore in 2011-12.•Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for providing short-term crop loans to farmers who repay their crop loan on time.•capital base of NABARD to be strengthened by ` 3,000 crore in phased manner.•10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for 2011-12.

EXPORT GROWTH

2009

•Allocation for Market Development Assistance Scheme enhanced to Rs.124 crore in B.E. 2009-10.•To facilitate flow of credit at reasonable rates, Rs.4,000 crore provided as special fund out of Rural Infrastructure Development Fund (RIDF) to (SIDBI). This will incentivise Banks and State Finance Corporations (SFCs) to lend to (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.

2010

•Extension of existing interest subvention of 2 per cent for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.

2011

•Of 23 suggestions made by Task Force on Transaction Cost, constituted by the Department of Commerce, 21 suggestions already implemented. Action to be taken on the remaining two suggestions. Transaction Cost of ` 2,100 crore will thus be mitigated.•Proposal to introduce scheme for refund of taxes paid on services used for export of goods.• Mega Cluster Scheme to be extended for leather products. Seven mega leather clusters to be set up during 2011-12.

Education

2009

•Rs.827 crore allocated for opening one Central University in each uncovered State.•Rs.2,113 crore allocated for IITs and NITs which includes a provision of Rs.450 crore for new IITs and NITs.•The overall Plan budget for higher education is to be increased by Rs.2,000 croreover Interim B.E. 2009-10.

2010

•Plan allocation for school education increased by 16 per cent from Rs.26,800 crore in 2009-10 to Rs.31,036 crore in 2010-11.•In addition, States will have access to Rs.3,675 crore for elementary education under the Thirteenth Finance Commission grants for 2010-11.

2011

•Allocation for education increased by 24 per cent over current year.•Sarva Shiksha Abhiyan - 21,000 crore allocated.

TAX PROPOSALS

2009

•Exemption limit in personal income tax raised by Rs.15,000 from Rs.2.25 lakh to Rs.2.40 lakh for senior citizens; by Rs.10,000 from Rs.1.80 lakh to Rs.1.90 lakh for women tax payers; and by Rs.10,000 from Rs.1.50 lakh to Rs.1.60 lakh for all•Deduction under section 80-DD in respect of maintenance, including medical treatment, of a dependent who is a person with severe disability being raised from the present limit of Rs.75,000 to Rs.1 lakh.•Surcharge on various direct taxes to be phased out; in the first instance, by eliminating the surcharge of 10 percent on personal income-tax.

2010

•Income tax slabs for individual taxpayers to be as follows•Income upto Rs 1.6 lakh Nil•Income above Rs 1.6 lakh and upto Rs. 5 lakh 10 per cent•Income above Rs.5 lakh and upto Rs. 8 lakh 20 per cent•Income above Rs. 8 lakh 30 per cent•Deduction of an additional amount of Rs. 20,000 allowed, over and above the existing limit of Rs.1 lakh on tax savings, for investment in long-term infrastructure bonds as notified by the Central Government•Current surcharge of 10 per cent on domestic companies reduced to 7.5 per cent.•(MAT) increased from the current rate of 15 per cent to 18 per cent of book profits.

2011

•Exemption limit for the general category of individual taxpayers enhanced from 1,60,000 to ` 1,80,000•Higher exemption limit for Very Senior Citizens, who are 80 years or above.•Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.•Rate of MAT proposed to be increased from 18 per cent to 18.5 per cent of book profits.•Additional deduction of ` 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.•Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.•A net revenue loss of ` 11,500 crore estimated as a result of proposals.

Tax (Indirect)

2009

•Service Tax to be imposed on the following services:•Service provided in relation to transport of goods by rail•Service provided in relation to transport of coastal cargo; and goods through inland water including National Waterways•Advice, consultancy or technical assistance provided in the field of law (this tax would not be applicable in case the service provider or service receiver is an individual).•Cosmetic and plastic surgery service

2010

•Rate reduction in Central Excise duties to be partially rolled back and the standard rate on all non-petroleum products enhanced from 8 per cent to 10 per cent•Rate of tax on services retained at 10 per cent to pave the way forward for GST.

2011

•To stay on course for transition to GST.•Central Excise Duty to be maintained at standard rate of 10 per cent.•Reduction in number of exemptions in Central Excise rate structure.•Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.•Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.•Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.