A QUICK LINK TO THE UNION BUDGET 2013-14

The budget claims that  the CSO has estimated growth at 5 percent while the RBI has estimated growth at 5.5 percent. The fiscal deficit stood at 5.3 percent of GDP this year and 4.8 percent of GDP in 2013-14.we have to find over USD 75 billion to finance the CAD. There are only three ways before us: FDI, FII or External Commercial Borrowing (ECB). WPI inflation to about 7.0 percent and core inflation to about 4.2 percent. Total expenditure had been fixed at Rs.14,90,925 crore. Due to the slowdown and the austerity measures, the revised estimate is Rs.14,30,825 crore or 96 percent of the budget estimate. The economic space that we have gained has given me the confidence to be more ambitious in 2013-14. I have been able to set the BE of total expenditure at Rs.16,65,297 crore and of plan expenditure at Rs.5,55,322 crore. The plan expenditure in 2013-14 will be 29.4 percent more than the revised estimate of the current year. 

Features

[i] FM allocated Rs.41,561 crore to the scheduled caste sub plan and Rs.24,598 crore to the tribal sub plan. The total represents an increase of 12.5 percent over the BE and 31 percent over the RE of the current year. [ii]that the gender budget has Rs.97,134 crore and the child budget has Rs.77,236 crore in 2013-14.


[iii]He allocated Rs.3,511 crore to the Ministry of Minority Affairs. This is an increase of 12 percent over the BE and 60 percent over the RE of 2012-13.

[iv]Rs 750 cr is allotted to The Maulana Azad Education Foundation Disabled Persons

[v] A sum of Rs.110 crore to the Department of Disability Affairs for the ADIP Scheme in 2013-14, as against the RE of Rs.75 crore in the current year was sanctioned.

[vi] Rs.37,330 crore to the Ministry of Health and Family Welfare
[vii] Rs.4,727 crore for medical education, training and research.

[viii] 150 cr for The National Programme for the Health Care  
[ix] For National Health Mission, Rs.1,069 crore to the Department of AYUSH was spared.

[x] six AIIMSwill get  Rs.1,650 crore for these institutions.

[xiFM allocated Rs.65,867 crore to the Ministry of Human Resource Development, which is an increase of 17 percent over the RE of the previous year. The Sarva Shiksha Abhiyan (SSA) and the Right to Education Act are firmly in place and sanctioned Rs.27,258 crore for SSA in 2013-14.

[xii] A provision of  Rs.3,983 crore for RMSA, which is an increase of 25.6 percent over the RE of the current year.

[xiii] For Scheduled Castes, Scheduled Tribes, Other Backward Classes and Minorities, and girl children, in 2013-14. FM  allocated  Rs.5,284 crore to the various Ministries for the purpose, as compared Rs.4,575 crore in the RE of the current year.

[xiv] The Mid-Day Meal Scheme (MDM) will be provided Rs.13,215 crore.


[xv] for  the ICDS ,he  propose to allocate Rs.17,700 crore in 2013-14, representing an increase of 11.7 percent.
[xvi] For Maternal and child malnutrition in a country Rs.300 crore in 2013-14 was provided.

[xvi] Clean drinking water and sanitation have a number of beneficial externalities, he propose to allocate Rs.15,260 crore to the Ministry of Drinking Water and Sanitation, as against the RE of Rs.13,000 crore in the current year.

[xvii] To 2,000 arsenic- and 12,000 fluoride-affected rural habitations in the country Rs.1,400 crore towards setting up water purification plants was passed.

[xviii] For  Ministry of Rural ,he allocated Rs.80,194 crore in 2013-14, marking an increase of 46 percent. MGNREGS will get Rs.33,000 crore, PMGSY will get Rs.21,700 crore, and IAY will get Rs.15,184 crore.

[xix] The Jawaharlal Nehru National Urban Renewal Mission is  provided  Rs.14,873
[xx]  FM proposed to allocate Rs.27,049 crore to the Ministry of Agriculture, an increase of 22 percent over the RE of the current year. Of this, agricultural research will be provided Rs.3,415 crore.
[xxi] Agricultural credit is provided Rs.700,000 crore.

[xxii] Bringing the green revolution Rs.1000 crore in 2013-14 is alloted.

[xxiii]  Allocated  Rs.500 crore to start a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives.

[xxiv] The Rashtriya Krishi Vikas Yojana and the National Food Security Mission is provided Rs.9,954 crore and Rs.2,250 crore, respectively,
[xxv] Integrated watershed programme from Rs.3,050 crore in 2012-13 (BE) to Rs.5,387 crore.

[xxvi]  A project of  rejuvenate coconut gardens in Kerala and the Andaman & Nicobar Islands is provided an additional sum of Rs.75 crore in 2013-14.

[xxvii]  Farmer Producer Organizations (FPO), including Farmer Producer Companies (FPC), were given  Rs.10 lakh per FPO to enable them to leverage working capital from financial institutions and was provided  Rs.50 crore for this purpose. Besides, a Credit Guarantee Fund will also be created in the Small Farmers' Agri Business Corporation with an initial corpus of Rs.100 crore.

[xxviii] The National Livestock Mission will be launched in 2013-14 with Rs.307 crore for the Mission.
[xxix] Apart from Rs.10,000 crore, over and above the normal provision for food subsidy for food security

[xxx]For industry and infrastructure development , to issue tax free bonds in 2013-14, strictly based on need and capacity to raise money in the market, upto a total sum of Rs.50,000 crore.

[xxxi] He  raised the corpus of RIDF-XIX in 2013-14 to Rs.20,000 crore.
[xxxii] 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.

[xxxii] The Cabinet Committee on Investment (CCI) has been set up to monitor investment proposals as well as projects under implementation, including stalled projects, and guide decision-making in order to remove bottlenecks and quicken the pace of implementation.

[xxxiii] A company 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 percent of the investment.
[xxxiv] The Rajiv Gandhi Equity Savings Scheme will be liberalised to enable Rs.10,00,000 to Rs.12,00,000;


[xxxv]To improve power supply in the Leh-Kargil region and connect the Ladakh region to the northern grid, the Government will construct a transmission system from Srinagar to Leh at a cost of Rs.1,840 crore and provided Rs.226 crore in 2013-14 for the project.

[xxxvi]  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 Rs.7,500 crore. When completed, this will add 42 million tonnes of capacity.
[xxxvii] It is planned for a PPP policy framework, with Coal India to increase the production of coal for supply to power producers and other consumers.

[xxxviii] He proposes that the non-tax benefits may be made available to a MSME unit for three years after it graduates to a higher category.

[xxxix] To provide greater support to MSMEs, he enhanced the refinancing capability of SIDBI from the current level of Rs.5,000 crore to Rs.10,000 crore per year.

[xxxx]  Microfinance Equity Fund is allotted  Rs.100 crore .
[xxxxi]  To continue the Technology Upgradation Fund Scheme (TUFS) for the textile sector in the 12th Plan with an investment target of Rs.151,000 crore. The major focus would be on modernisation of the powerloom sector and provided Rs.2,400 crore in 2013-14 for the purpose.

[xxxxii] A sanction of Rs.50 crore to the Ministry of Textiles to provide an additional grant of upto Rs.10 crore to each Park was made.

[xxxxiii] He proposes to provide Rs.50 crore in 2013-14 for the scheme.

[xxxxiv] FM allocated an additional sum of Rs.96 crore in 2013-14 to the Ministry of Textiles for interest subvention.

[xxxxv]  Khadi, village industries and coir industries in 12th Plan has provided an outlay of Rs.850 crore.

[xxxxvi] For banking sector in 2013-14, further amount of Rs.14,000 crore was sanctioned for capital infusion.

 [xxxxvii] All scheduled commercial banks and all RRBs are on core banking solution (CBS) and on the electronic payment systems (NEFT and RTGS by 31.12.2013. Public sector banks have assured me that all their branches will have an ATM in place by 31.3.2014.

[xxxxviii] to set up India's first Women's Bank as a public sector bank and I shall provide Rs.1,000 crore as initial capital by October, 2013.
[xxxxix] The Rural Housing Fund set up through the National Housing Bank is used to refinance lending institutions, and provided Rs.4,000 crore to the Fund and Rs.6,000 crore to the Rural Housing Fund in 2013-14.

[xxxxx] For Urban Housing Fund Rs.2,000 crore is alloted in 2013-14.

[xxxxxi] All towns of India with a population of 10,000 or more will have an office of LIC and an office of at least one public sector general insurance company by 31.3.2014.
- KYC of banks will be sufficient to acquire insurance policies.
- Group insurance products will now be offered to homogenous groups such as SHGs, domestic workers associations, anganwadi workers, teachers in schools, nurses in hospitals etc.
 The Rashtriya Swasthiya Bima Yojana covers 34 million families below the poverty line. It will now be extended to other categories such as rickshaw, auto-rickshaw and taxi drivers, sanitation workers, rag pickers and mine workers.

[xxxxxii] SEBI, will now be free to register different classes of portfolio investors, subject to compliance with KYC guidelines.
- where an investor has a stake of 10 percent or less in a company, it will be treated as FII and, where an investor has a stake of more than 10 percent, it will be treated as FDI.

- FIIs will be allowed to participate in the exchange traded currency derivative segment to the extent of their Indian rupee exposure in India.
- FIIs will also be permitted to use their investment in corporate bonds and Government securities as collateral to meet their margin requirements.
- Mutual fund distributors will be allowed to become members in the Mutual Fund segment of stock exchanges so that they can leverage the stock exchange network to improve their reach and distribution.
- The list of eligible securities in which Pension Funds and Provident Funds may invest will be enlarged to include exchange traded funds, debt mutual funds and asset backed securities.

[xxxxxiii] It is planned to take up waste-to-energy projects in PPP mode and  for wind energy projects and  provided of  Rs.800 crore to the Ministry of Non Renewable Energy for the purpose.

[xxxxxiv] The Backward Regions Grant Fund (BRGF) is a vital source of gap funding for which is to allocate Rs.11,500 crore in 2013-14 as well as another sum of Rs.1,000 crore for LWE affected districts.
[xxxxxv] Govt. have set an ambitious target of skilling 50 million people in the 12th Plan period, including 9 million in 2013-14.
[xxxxxvi]  Defence expenditure is Rs.203,672 crore. This will include Rs.86,741 crore for capital expenditure.
[xxxxxvii] Rs.6,275 crore went to the Ministry of Science & Technology; Rs.5,615 crore to the Department of Space; and Rs.5,880 crore to the Department of Atomic Energy

- Rs.100 crore each to:
- Aligarh Muslim University, Aligarh campus
- Banaras Hindu University, Varanasi
- Tata Institute of Social Sciences, Guwahati campus
- Indian National Trust for Art and Cultural Heritage (INTACH)
- National Institute of Sports Coaching at Patiala at a cost of Rs.250 crore over a period of three years.
- a population of more than 100,000 will be covered by private FM radio services.
- Panchayati Raj in 2013-14 will get an additional Rs.200 crore.
-Post Offices modernization will cost Rs.4,909 croreand for  core banking solution and offer real Rs.532 crore for the project in 2013-14.
[xxxxxviii] In 2013-14 a transfer resources to the tune of Rs.5,87,082 crore to the States and UTs where to set up a fund - let us call it the Nirbhaya Fund - and Government will contribute Rs.1,000 crore. Ministry of Women and Child Development  and FM  proposed to set apart Rs.1,000 crore for this ambitious scheme

[xxxxxix] The Direct Benefit Transfer scheme has captured the imagination of the people, especially the poor.
[xxxxxx] The estimate of Plan Expenditure is placed at Rs.5,55,322 crore. As a proportion of total expenditure, it will be 33.3 percent.

- Non Plan Expenditure is estimated at Rs.11,09,975 crore.

- fiscal deficit for the year 2013-14 is estimated at 4.8 percent. The revenue deficit for the current year will be 3.9 percent and the revenue deficit for the year 2013-14 is estimated at 3.3 percent.
-He proposes  to provide a tax credit of Rs.2,000 to every person who has a total income upto Rs.5 lakh. 1.8 crore tax payers are expected to benefit to the value of Rs.3,600 crore.

- a surcharge of 10 percent on persons whose taxable income exceeds Rs.1 crore per year.
- the surcharge from 5 percent to 10 percent on domestic companies whose taxable income exceeds Rs.10 crore per year

- to increase the current surcharge of 5 percent to 10 percent.
- If the limit of interest rate Rs100000/-is not exhausted, the balance may be claimed in AY 2015-16.

-for disabled premium rate from 10 percent to 15 percent of the sum assured. This relaxation shall be available in respect of policies issued on or after 1.4.2013.

- to provide an investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs.100 crore in plant and machinery during the period 1.4.2013 to 31.3.2015.

- a rupee- denominated long term infrastructure bonds will be issued.

-to modify the Rajiv Gandhi Equity Saving Scheme

- to levy a final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to shareholders through buyback of shares.
- to make the following reductions in the rates of tax:
- Equity futures: from 0.017 to 0.01 percent
- MF/ETF redemptions at fund counters: from 0.25 to 0.001 percent
- MF/ETF purchase/sale on exchanges: from 0.1 to 0.001 percent, only on the seller
- The fifth Large Tax payer Unit will be opened at Kolkata shortly.

[xxxxxxi]There will also be no change in the normal rate of excise duty of 12 per cent and the normal rate of service tax of 12 per cent.

- to reduce the duty on specified machinery for manufacture of leather and leather goods, including footwear, from 7.5 per cent to 5 per cent.

- to reduce the duty on pre-forms of precious and semi-precious stones from 10 percent to 2 per cent.

- to impose a duty of 10 percent on export of unprocessed ilmenite and 5 per cent on export of upgraded ilmenite.

-set top boxes to increase the duty from 5 per cent to 10 per cent.

- to increase the duty on raw silk from 5 per cent to 15 per cent.

- to equalise the duties on both kinds of coal and levy 2 per cent customs duty and 2 per cent CVD.

-to increase the duty on such motor vehicles from 75 percent to 100 percent with engine capacity of 800cc or more from 60 per cent to 75 per cent; and on yachts and similar vessels from 10 percent to 25 per cent.

- to raise the duty-free limit to Rs.50,000 in the case of a male passenger and Rs.100,000 in the case of a female passenger, subject to the usual conditions.

- to totally exempt handmade carpets and textile floor coverings of coir or jute from excise duty.

- to exempt ships and vessels from excise duty. Consequently, there will be no CVD on imported ships and vessels.

- to increase the specific excise duty on cigarettes by about 18 percent. Similar increases are proposed on cigars, cheroots and cigarillos.

- to increase the excise duty on SUVs from 27 percent to 30 percent. However, the increase will not apply to SUVs registered as taxis.

- to increase the duty from Rs.30 per sq. mtr to Rs.60 per sq mtr on marbel.
- to levy 4 percent excise duty on silver manufactured from smelting zinc or lead,

-to raise duty of 6% on mobile phones priced at more than Rs.2000.
- full exemption of service tax was granted on copyright on cinematography.

- to levy service tax on all air conditioned restaurants.

- to reduce the rate of abatement for this class of buildings (of Rs 1 cr.)from 75 percent to 70 percent.
-So, the direct taxes side are estimated to yield Rs.13,300 crore and on the indirect taxes side Rs.4,700 crore.

At the end, FM expects that India would  become a $ 5 trillion economy, and among the top five in the world by 2025.