Highlights of Union Budget 2013 – 2014
Union Finance Minister P. Chidambaram presented Budget 2013-14 in the Lok Sabha today on 28-Feb. He said that India will become USD 5 trillion economy, and among top five in the world by 2025.
I have quickly summarised the major highlights of this budget on one page for your quick read.
Major Highlights of this Budget are :
- Fiscal deficit seen at 5.2 point of GDP in 2012/13
- Fiscal deficit seen at 4.8 point of GDP in 2013/14
- No Change in Income Tax Slabs
- Tax credit of Rs. 2,000 for income upto Rs. 5 lakh
- 10 % surcharge on persons with taxable income of over Rs 1 crore
- Direct Taxes Code (DTC) bill to be introduced in current Parliament session
- Income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme (RGESS) is raised to Rs. 12 lakh from Rs. 10 lakh
- First home loan of up to Rs 25 lakh to get extra interest deduction of up to Rs 1 lakh
- Duty-free limits for Gold raised to Rs 50000 for men and Rs 1 lakh for women
- Tax Deducted at Source to be fixed at 1% on land deals over Rs 50 lakh
- Proposal to launch Inflation Indexed Bonds or Inflation Indexed National Security Certificates to protect savings from inflation.
- All public-sector banks have assured the Finance Minister that they will all have ATMs in their branch areas by 2014
- Propose to reduce securities transaction tax on equity futures to 0.01 point from 0.017 point
- Time to introduce commodities transaction tax (CTT). CTT on non-agriculture futures contracts at 0.01 point
- Propose to impose withholding tax of 20 point on profit distribution to shareholders
- No change in peak custom, excise rates.
- Excise duty on SUVs to be increased to 30 per cent from 27 per cent, SUVs registered as taxis exempted
- 18% rise in excise duty on Cigarattes, cigars and cheerots
- Service tax on all A/C restaurants
- To increase surcharge to 10 point on domestic companies with annual income of more than 100 million rupees
- For foreign companies, who pay the higher rate of corporate tax, the surcharge will increase from 2 pct to 5 per cent.
- To continue 15 point tax concession on dividend received by India companies from foreign units for one more year
Major Expenditure & Allocations
- ‘Nirbhaya Fund’ – Rs 1000 crore – to empower women and provide safety in the wake of Delhi gang-rape incident
- TUF Scheme for textile sector – Rs 1,51,000 crore
- Capital infusion in public sector banks in 2013-14 – Rs 14000 crore
- Defence allocation – Rs 203,672 crore
- Education – Rs 65,867 crore
- Rural Development Ministry – Rs 80,194 cr
- National Food Security towards incremental cost – Rs 10,000 crore
- Farm credit target set – Rs 7 lakh crore as against Rs 5.75 lakh crore in 2012-13
- Ministry of Technology – Rs 6275 crore
- Department of Space – Rs 5216 crore
- Department of Energy – Rs 5280 crore
- AMU (Aligarh), BHU (Varanasi) and TISS (Guwahati) and INTACH – 100 crore each
- Eastern Indian states to get Rs 1,000 crore allocation for improving agricultural production.
- Programme on crop diversification – Rs 500 crore
- Agriculture Ministry – Rs 27,049 crore
- JNNURM for urban transportation – Rs 14,873 crore
- Ministry of Drinking Water and Sanitation – Rs 15,260 crore
- MGNREGA – Rs 33,000 crore
- NABARD for agri storage facilities – Rs. 5,000 crore
- Integrated Child Development Scheme (ICDS) – Rs 17,700 crore
- National Food security bill – Rs 10,000 crore
- To make post offices part of core banking – Rs 532 crore
- Mid-day meal programme – Rs 13215 crore
- Rs 41,561 crore for SC plan and Rs 24,598 crore for tribal plan
- 169 crore given for development of Ayurveda, Siddha, Unani (Natural medicine) and homeopathy
- The Right to Education Act is firmly in place, says Chidambaram, while announcing Rs. 27,250 crore to Sarva Shikhsa Abhiyaan in FY14.
- 289 more cities to get private radio FM stations
- Insurance companies can now open branches in Tier 2 cities and below without prior approval. All towns of India with a population of 10000 or more will have an LIC branch and one other public sector insurance company.
- India’s first women’s bank as a PSU proposed, Rs. 1,000 crore working capital announced
- India Infrastructure Finance Corporation (IIFC), in partnership with ADB will help infrastructure companies to access bond market to tap long term funds.
- Regulatory authority to be set up for road sector
- An Institute for agricultural biotechnology will be set up in Ranchi, Jharkhand.
- Four Infrastructure debt funds have been registered
- Foodgrain production in 2012—13 will be over 250 million tons
Corporate & Markets
- Proposes capital allowance of 15 point to companies on investments of more than 1 billion rupees
- Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements
- Insurance, provident funds can trade directly in debt segments of stock exchanges
- FIIs can hedge forex exposure through exchange-traded derivatives
- Investor with less than 10 point stake in a company will be regarded as FII, more than 10 point stake as FDI (foreign direct investment)
- Stock exchange regulator will simplify know-your-customer norms for foreign portfolio investors
- 2013/14 major subsidies bill estimated at Rs 2,48,000 crore – up from Rs 182000 crore in 2012-2013
- Petroleum subsidy seen at Rs 65000 crore rupees in 2013/14
- Revised petroleum subsidy for 2012/13 at Rs 96880 crore
- Estimated Rs 90000 crore spending on food subsidies in 2013/14