New Delhi: The Government on Monday outlined measures to speed infrastructure development and unveiled increased spending for farmers and the poor in its first Budget since Prime Minister Manmohan Singh's government was re-elected by a resounding margin in May.
Finance Minister Pranab Mukherjee, sticking to the theme of "inclusive growth" espoused by the Congress party-led United Progressive Alliance (UPA) Government, unveiled breaks for exporters hard-hit by the global downturn and direct subsidies for farmers.
He also urged a return to fiscal responsibility targets as soon as possible.
"The first challenge is to return the GDP growth rate of 9 per cent per annum at the earliest," Mukherjee said. "The second challenge is to deepen and broaden the agenda for inclusive development."
Reuters reports Mukherjee called on states to remove bottlenecks for infrastructure projects, and outlined plans for more flexible financing for infrastructure and development of long-distance gas pipelines.
Income Tax limits
Mukherjee proposed to increase the income tax exemption limit for senior citizens by Rs.15,000, for women and others by Rs 10,000 each, while keeping the corporate tax rate unchanged.
The exemption limit will now be Rs 240,000 for senior citizens, Rs.190,000 for women and Rs 160,000 for others.
Disinvestment targets
Mukherjee revived the government's divestment programme, promising equity of state-run enterprises in the hands of general public.
He also said that in areas like banking and insurance, specifically, the majority control in state-run companies would remain in the hands of the government with fresh infusion of equity to help them remain globally competitive.
Simple tax returns
The Government will work towards simplifying the tax structure in the next four years, said Mukherjee. The income tax department has also been asked to introduce the simplified version of the tax filing form Saral, called Saral 2.
Economic achievements
Mukherjee began his speech by highlighting the economy’s 6.7 per cent growth in 2008-9, reduction of inflation rate from 13 per cent to near zero per cent in a short period of time, improvement in industrial growth and stepping up of foreign investment.
Unconstrained by its previous alliance with leftist parties, the UPA Government has a freer hand to implement economic liberalisation measures to drive expansion but has also promised "inclusive growth" to support social programmes and rural development.
India's economy, Asia's third-largest, grew at 6.7 per cent in the most recent fiscal year, held back by the global downturn, after expanding at least 9 per cent for three straight years.
Budget speech highlights:
- IT exemption limit raised; Rs 15,000 for senior citizens.
- Limit raised by Rs 10,000 for tax payers, including women
- Income tax incentives on education loans expanded to cover vocational studies after schooling.
- 10 per cent surcharge on personal income tax rolled back
- Fringe Benefit Tax rolled back
- No change in corporate tax
- Commodity Transaction Tax rolled back
- Defence gets Rs 1,41,703 crore for 2009-10, a 34 per cent hike from 2008-09 budgetary allocation of Rs 1,05,600 crore.
- Fiscal deficit in 2009-10 is proposed at 6.8 per cent of GDP.
- Plan expenditure, for both Centre and states, to go up by Rs 61,000 crore over the Interim Budget.
- Total Budget expenditure for 2009-10 will Rs 10,28,032 crore, crossing Rs 10 lakh crore mark for the first time since Independence.
- First Unique Identification Card to citizens to roll out in 12-18 months, provision of Rs 120 crore for the project.
- Allocation of Rs 2,113 crore for IITs and NITs.
- Higher education allocation increased by Rs 2,000 crore.
- Rs 827 crore each allocated to set up Central Universities in states where there are Central University.
- One rank, one pension scheme for ex-servicemen approved
- New pension benefits for 12 lakh jawans and Junior Commissioned Officers from July.
- Modernisation of national employment exchanges to be carried out.
- Allocation for National Rural Health Mission to be raised by Rs 257 crore over and above the outlay in the Interim Budget.
- Action initiated to provide social security to unorganised sector workers.
- National Mission for Female Literacy with emphasis on minorities, Scheduled Castes and Scheduled Tribes to be launched. Fifty per cent of all rural women to be brought into self-help group programmes.
- Full interest subsidy for students taking up courses in approved institutions. Five lakh students to benefit.
- State-owned banks and insurance firms to remain in public sector
- Work on National Food Security scheme for providing food at cheaper rates to the poor has begun
- Increase allocation for Prime Minister Gram Sadak Yojana by 59 pc
- Allocation of Rs 39,100 crore for NREGA for 2009-10
- Govt to provide real wage of Rs 100 per day under NREGA
- IT Return forms to be made simple and user friendly<
- Allocation for national highways development stepped up by 23 pc
- Allocation for schemes for the urban poor to be raised to Rs.39,730 cr in 2009-10
- 75 per cent increase for Accelerated Irrigation Programme
- Extension of stimulus package for print media to be extended till December 2009
- Indian Infrastructure Financial Corporation Limited (IIFCL) to evolve financing mechanism for giving increased support to infrastructure projects
- Target for agriculture credit raised to Rs 3,25,000 cr in 2009-10 from Rs 2,87,000 cr
- Enhancing allocation from Rs 200 crore to Rs 500 crore for flood management project in Mumbai
- Funds for Jawaharlal Nehru Urban Renewal Mission increased by 87 pc to Rs 12,887 cr
- Funds for housing for urban poor to be raised to Rs 3,973 crore
- Pranab forecasts GDP growth at 6.7 per cent for 2008-09
- Growth rate in 2008-09 dipped to 6.7 pc from average 9 pc growth
- Govt says its will broaden the agenda for inclusive development
- Significant inflow of foreign capital is important
- Govt moving towards providing energy security and integrated energy policy
- Single Budget cannot solve all our problems. It is a means to share the vision of the government with all
- Fiscal deficit grew from 2.7 per cent to 6.8 per cent of GDP
- Total fiscal stimulus during 2008-09 amounts to Rs 1,86,000 crore
- Govt plans to return economy to high GDP growth rate of 9 pc
- Trade in goods and services doubled to 47 per cent in 2008-09
Earlier, Mukherjee reached Parliament at about 0930 hrs IST with a maroon coloured briefcase containing Budget papers and the Union Cabinet met immediately to approve it.
The Cabinet gave the go ahead to the Budget after meeting for about 25 minutes.
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