UNION BUDGET 2013-14 HIGHLIGHTS

FINANCIAL HIGHLIGHTS

• In 2013-14, the budget estimate is Rs 16,65,297 crore.
• The revised expenditure target is Rs 14,30,825 crore
• Plan expenditure Rs 5,55, 322 crore
• Rs 14,000 crore capital infusion into public sector banks in 2013—14
• Fiscal deficit :
• Fiscal deficit seen at 5.2 %  of GDP in 2012/13
• Fiscal deficit seen at 4.8 %  of GDP in 2013/14
• Fiscal deficit to 3 % by 2016/17
• Revenue Deficit
• Revenue Deficit seen at 3.9 % 2012/13
• Revenue Deficit seen at 3.3 % 2013/14
• Revenue deficit to 1.9% by 2016-17

PERSONAL TAX

• No changes in personal Income Tax slabs or rates
• Surcharge on super rich
• Surcharge of 10% for income of Rs 1 cr or more per annum for one year
• 10% surcharge to be applicable for individuals, HUFs, firms and entities with similar tax status
• Surcharge increased from 5% to 10% on domestic companies whose taxable income exceeds Rs 10 crore per year
• 1% TDS for property sale worth more than Rs 50 lakh; agri land exempt
• Tax credit of Rs 2000 on incomes between Rs2-5 lakh
• 5.5% tax to GDP ratio for direct tax
• 4.5% tax to GDP ratio for indirect tax
• Tax administration reform commission to be set up to strengthen the system
• Our tax to GDP ratio is very low
• Should reclaim 11.9% Tax-GDP ratio in short-term
• There are 42,800 persons in the country who admitted to a taxable income exceeding Rs 1 cr per year
• Donations to National Children’s Fund will be eligible for 100% tax deduction
• Long-term infra bonds also eligible for tax deduction; additional Rs 1 lakh deduction for home loans
• TDS on value of immovable property as transaction on immovable properties are usually undervalued
• Extends tax cuts benefits to Rupee Infrastructure Funds
• Educational Cess to continue at 3 %
• Securitization Trust income to be exempt
• Tax on royalty and fees for technical services to NRIs increased from 10% to 25%.
• Permissible premium rate of life insurance policies increased from 10% to 15% for persons with disability and certain ailments
• Contributions to schemes of Central and state govts similar to Central Government Health Scheme, eligible for exemption under Section 80D of the Income Tax Act

CORPORATE TAX

• CTT on non-commodities futures at 0.1%
• Surcharge on DDT doubled to 10%
• A final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to shareholders through buyback of shares
• E-filing of tax returns to be made mandatory for more sectors

 INDIRECT TAXES

• No change in peak rate for CD non-agri products
• Eco friendly concessions to be prolonged till 2015
• Duty on specified machinery for leather cut from 7.5 to 5%
• Export duty on deoiled rice bran cake withdrawn
• Import duty on set-top boxes increased to 10% from 5%
• Import duty on raw silk increased to 15% from 5%
• Taxing the rich further: Duty on imported goods like motor vehicles, yatchs and motor cycles increased
• Leather and goods duty reduced to 5%
• Luxury cars import duty at 100%
• Yachts duty at 25%
• Luxury motorcycle duty at 75%
• No change in customs duty of 10%
• No change in excise duty or service tax
• Precious, semi-precious duty reduced
• Luxury motor vehicles to be taxed more
• Equalise duty on grades of coal. 2% Customs and CVD duty on coal
• Cigarattes hit with an 18% rise in excise duty. So also cigars and cheerots.
• Excise duties on personal SUVs increased, Excise duty on SUVs hiked to 30% from 27%. No duty on those used as taxi.
• No CVD on imported parts – for shipbuiding
• All silver to attract excise of 4%.
• Mobile phones priced over Rs 2,000 to attract 6% duty
• Service tax on all A/C restaurants with over 2,000 sq ft proposed
• Voluntary Compliance Encouragement Scheme for Service Tax payers
• Chidambaram says Direct Taxes after changes will yield Rs 13,300 crore and indirect taxes. Rs 4,700 crore.
• Rs 9,000 crore for balance CST compensation to the States proposed.
• Baggage rules to permit bringing jewelry duty free limit raised to Rs. 50000 for males and Rs. 1 lakh for females
• Excise duty on set top box increased
• 6% duty on mobiles costing more than Rs 2000
• Handmade carpets exempt for excise duty
• Advocates need for GST

ALLOCATION

• An additional sum of Rs 200 crore for women and childwelfare schemes to end discrimination.
• Nirbhaya Fund of Rs 1,000 crore — women and girl child related schemes
• Health for all, education for all will remain a priority, he said. Rs 150 crore proposed for health scheme for old. Ayurveda, Unani, Homeopathy to be mainstreamed; stresses on care for elderly (geriatric care).
• Education to get Rs 65,867 crore, 17% more than last year’s RE. Aligarh, Varanasi universities get Rs 100 crore.
• MID-DAY MEAL scheme will get Rs 13,215 crore; 
• CHILD DEVELOPMENT scheme to get Rs 17,700 crore which is 11.2% higher than last year’s.
• Proposes 1,000s of scholarships for students of SC, ST, OBC and women.
• Clean drinking water and sanitation – to get over Rs 15,000 crore
• Rs 1,500 crore towards setting up water purification plants
• MNREGS to get about Rs 33,000 crore
• Rural Development Schemes to get Rs 80,194 crore
• AGRICULTURE SECTOR to get Rs 24,049 crore
• Interest subvention scheme – Rs 1,000 crore for Eastern States growing rice
• Water shed management: For crops rich with micronutrients.. research programe of up to Rs 200 crore. Pilots rejuvinating cococunt gardens to be extended all over Kerala. The pilot scheme will get an additional Rs 75 crore.
• Allocation to Agricultural Ministry increased 22% to Rs 27,049 crore for 2013-14.
• Agricultural Research to get Rs 3,415 crore in 2013-14.
• Farmers Producers Organisations–to get matching grant, and credit enhancement scheme
• Over and above food subsidy, Rs 10,000 crore set apart for food security Bill.
• Credit disbursement to farmers targeted at Rs 7 lakh crore in 2013-14. Target of Rs 5,75,000 crore exceeded in 2012-13.
• Budget 2013-14 proposes Rs 5,000 crore for Nabard to finance construction of warehousses, cold storage silos, godowns to storage agriculture produce.
• NABARD’S RIDF corpus to be increased to Rs 20,000 crore from Rs 19,000 crore.

ENERGY SECTOR

• Waste to energy projects. Scheme to allow cities and municipalities to take up waste to energy projects on PPP mode. Waste to energy projects undertaken by municipalities to get viability gap funding
• Low cost finance for renewable energy projects. Life span for five years. Rs 800 crore for generation-based incentives for wind energy.
• Low interest bearing funds from National Clean Energy Fund to IREDA to lend for clean energyprojects
• New criteria to define backward regions: per capita, literacy and other human development indicators.

FINANCIAL SECTOR

• Standing Council of experts within the Finance Ministry– examining transaction cost and will analyse international financial sector.
• PSU banks will have ATMs in all their branches by 2014. India’s first public sector bank for women proposed with Rs 1,000 crore as initial capital.
• Rs 2,000 crore for urban housing fund to be set up by NHB.

DEFENCE SECTOR

• Defence allocation increased to Rs 2,03,672 crore. Department of Space to get Rs 5,615 crore; Rs 6,275 crore allocated to the Ministry of Science and Technology; Atomic Energy to get Rs 5,880 crore; Rs 200 crore fund to scale up S&T innovations to reach common man.

OTHER HIGHLIGHTS

• Road construction sector faces challenges. An independent authority for the road transport sector has been proposed. About 3,000 km of roads to be awarded in the first six months of 2013-14.
• Chennai-Bengaluru Industrial Corridor has been proposed with Japanese funding support.
• Stating that five inland waterways have been declared as national, the river in Assam will be the sixth. He said barge operators will be selected through PPP to move bulk cargo through waterways. He said two new ports will be set up in Sagar in West Bengal and in Andhra Pradesh.
• Tax free bonds in 2013-14 up to Rs 50,000 crore.
• Households must be incentivised to invest in mutual funds and listed shares rather than gold, said Chidambaram.
• Income limit for tax-savings under “Rajiv Gandhi Equity Savings Scheme” has been raised to Rs 12 lakh from Rs 10 lakh. Inflation-indexed bonds will be announced on June 1.
• First time home buyers, taking loan of up to Rs 25 lakh in FY 13-14, will get additional interest benefit of Rs 1 lakh.
• SIDBI will get more funds to provide finance to MSMEs; corpus of Rs 500 crore proposed for SIDBI set up credit guuarantee fund.
• Modernisation of powerloom sector; Rs 50 crore for apparel parks proposed.
• The New Companies Bill, when enacted into a law, mandates corporates to spend 2% of their net profits for CSR activities.
• Rs 50 crore for environment schemes for textile units; Rs 96 crore for Textile Ministry interest subvention.
• Private FM channels to reach 294 new cities, 839 new channels to be auctioned in 2013-14. All cities with over one lakh population will be covered by private channels.
• Central Sponsored Scheme to be restructured. Numbers to be brought down to 70 from 173.
• Technology: Over Rs 400 crore to make to make Post Offices IT-linked and provide real-time based banking services.
• Sports: Rs 250 crore to set up National Institute of Sports Coaching at Patiala over 3 years
• Insurance companies will be allowed to open branches in Tier two citites without IRDA’S APPROVAL.LIC will be allowed to open branches in all towns with over population of 10,000.
• RSBY will cover autorickshaw pullers, taxi drivers, sanitation workers, rag pickers
• Third quarter GDP: This is Chidambaram’s first Budget for UPA-II and the last full fledged one before general elections next year.
• The third quarter GDP growth that is exepected later this evening is expected to show a weak print, signalling no evidence of growth bottoming out.