BYRAVI

IMPACT ON BUDGET 2013

BUDGET 2013: GREAT TAX EXPECTATIONS

TAX FOR THE RICH: 

India recently joined the ranks of many Western countries

with talk of raising taxes for wealthy individuals.

A surcharge is a tax on tax. For instance, if your tax

liability for a year is 10,000 rupees ($185), the surcharge

would be a tax on 10,000 rupees.

Tax consultants expect a surcharge of around 10%, which

in this case would translate to 1,000 rupees.

Thus, the individual’s total tax liability would be 11,000

rupees ($203).

The Budget left tax slabs and tax rates unchanged but

proposes a Rs 2,000 tax credit to those whose taxable

income is up to Rs 5 lakh.

The credit, given to those in the lowest tax bracket,

increases their tax exemption limit from Rs 2 lakh to Rs

2.2 lakh.

The Budget has also not changed the tax rates for senior

citizens (60-80 years) and very senior citizens (80 years and

above).

So, all men, women and senior citizens with taxable income

of less than Rs 5 lakh will save Rs 2,000 in 2013-14.

The rates for those in higher income brackets have not been

changed, except for those with taxable income of more than

Rs 1 crore.

CONTINUES

Railway Minister concludes his budget speech• 67 new express trains to be introduced; 27 passenger trains,

8 DEMUs

• 10% reservation for women in RPF• Internet booking to be provided from 0030 hours to 2330

hours• Special A/C coaches ‘Anubhuti’, to be introduced • SMS alert service being rolled out shortly to intimate

passengers about reservation status• Free Wi-Fi facility to be provided in select trains• Plan to allow e-ticketing via mobile phone

Railway budget plans

Diesel price hike added Rs 3,300 crore to fuel bill of Railways

Railway revenues to show a balance of Rs 12,506 crore in 2013-14

Electrification of 1,200 km to be completed this year 72 additional suburban services in Mumbai and 18 in

Kolkata An independent Rail Tariff Authority has been formalised Operating ratio expected to improve to 87.8 per cent in

2013-14 from 88.8 per cent in the current fiscal

Health and Education

Health for all and education for all remain our priorities.

Allocated `37,330 crore to the Ministry of Health and Family Welfare. Of this, the new National Health Mission that combines the rural mission and the proposed urban mission will get `21,239 crore, an increase of 24.3 percent. Rs.`4,727 crore for medical education, training and research. 

Ayurveda, Unani, Siddha and Homoeopathy are being mainstreamed through the National Health Mission. They allocate `1,069 crore to the Department of AYUSH.

The six AIIMS-like institutions have admitted their first batch of students in the academic session that commenced in September 2012. The hospitals attached to the colleges will be functional in 2013-14. They plan to provide a sum of `1,650 crore for these institutions. 

Drinking Water

Clean drinking water and sanitation have a number of beneficial externalities. The budget allocate `15,260 crore to the Ministry of Drinking Water and Sanitation, as against the RE of `13,000 crore in the current year.

There are still 2,000 arsenic- and 12,000 fluoride-affected rural habitations in the country. So they plan to provide `1,400 crore towards setting up water purification plants. 

Rural Development

The Ministry of Rural Development steers a number of flagship programmes. We estimate that they will be able to spend `55,000 crore before the end of the current year, and they plan to allocate `80,194 crore in 2013-14, marking an increase of 46 percent. MGNREGS will get `33,000 crore, PMGSY will get `21,700 crore, and IAY will get `15,184 crore.

Agricultural Credit

Agricultural credit is the driver of agricultural production. We will exceed the target of `575,000 crore fixed for 2012-13. For 2013-14, They increase the target to `700,000 crore.

The interest subvention scheme for short-term crop loans will be continued and a farmer who repays the loan on time will be able to get credit at 4 percent per annum. So far, the scheme has been applied to loans extended by public sector banks, RRBs and cooperative banks.

Road Construction

Government has decided to constitute a regulatory authority for the road sector. Bottlenecks stalling road projects have been addressed and 3,000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14.

Savings

Increasing savings and their optimal allocation for productive uses lead to higher economic growth.

• Firstly, the Rajiv Gandhi Equity Savings Scheme will be liberalised to enable the first time investor to invest in mutual funds as well as listed shares and she can do so, not in one year alone, but in three successive years. The income limit will be raised from `10,00,000 to `12,00,000;

• Secondly, a person taking a loan for his first home from a bank or a housing finance corporation upto `25,00,000 during the period 1.4.2013 to 31.3.2014 will be entitled to an additional deduction of interest of upto `100,000. This will promote home ownership and give a fillip to a number of industries like steel, cement, brick, wood, glass etc. besides jobs to thousands of construction workers.

• Thirdly, in consultation with RBI, I propose to introduce instruments that will protect savings from inflation, especially the savings of the poor and middle classes. These could be Inflation Indexed Bonds or Inflation Indexed National Security Certificates. The structure and tenor of the instruments will be announced in due course.

Ports

Two new major ports will be established in Sagar, West Bengal and in Andhra Pradesh to add 100 million tonnes of capacity. In addition, a new outer harbour will be developed in the VOC port at Thoothukkudi, Tamil Nadu through PPP at an estimated cost of `7,500 crore. When completed, this will add 42 million tonnes of capacity. 

Sports

Sports of all kind deserve our support. We have many sportsmen and sportswomen but few coaches. Hence, they propose to set up the National Institute of Sports Coaching at Patiala at a cost of `250 crore over a period of three years.

THANK YOU