India must make tough spending choices, finance
minister P Chidambaram said on
Thursday, even as he unveiled a bigger-than-expected outlay for the coming
fiscal year in one of the most highly anticipated Indian budgets of recent
years.
Following
are highlights of the Budget:
FISCAL DEFICIT
* Fiscal deficit seen at 5.2 point of GDP in 2012/13
* Fiscal deficit seen at 4.8 point of GDP in 2013/14
* Faced with huge fiscal deficit, India had no choice but to
rationalize expenditure
BORROWING
* Gross market borrowing seen at 6.29 trillion rupees in
2013/14
* Net market borrowing seen at 4.84 trillion rupees in
2013/14
* Short-term borrowing seen at 198.44 billion rupees in
2013/14
* To buy back 500 billion rupees worth of bonds in 2013/14
SUBSIDIES
* 2013/14 major subsidies bill estimated at 2.48 trillion rupees
from 1.82 trillion rupees
* Petroleum subsidy seen at 650 billion rupees in 2013/14
* Revised petroleum subsidy for 2012/13 at 968.8 billion
rupees
* Estimated 900 billion rupees spending on food subsidies in
2013/14
* Revised food subsidies at 850 billion rupees in 2012/13
* Revised 2012/13 fertiliser subsidy at 659.7 billion rupees
GROWTH
* India faces challenge of getting back to its potential growth
rate of 8 point
* India must unhesitatingly embrace growth as highest goal
SPENDING
* Total budget expenditure seen at 16.65 trillion rupees in
2013/14
* Non-plan expenditure estimated at about 11.1 trillion
rupees in 2013/14
* India's 2013/14 plan expenditure seen at 5.55 trillion
rupees
* Revised estimate for total expenditure is 14.3 trillion
rupees in 2012/13, which is 96 point of budget estimate
* Set aside 100 billion rupees towards spending on food
subsidies in 2013/14
REVENUE
* Expect 133 billion rupees through direct tax proposals in
2013/14
* Expect 47 billion rupees through indirect tax proposals in
2013/14
* Target 558.14 billion rupees from stake sales in state-run
firms in 2013/14
* Expect revenue of 408.5 bln rupees from airwave
surcharges, auction of telecom spectrum, licence fees in 2013/14
CURRENT ACCOUNT
DEFICIT
* India's greater worry is the current account deficit -
will need more than $75 billion this year and next year to fund deficit
INFLATION
* Food inflation is worrying, will take all steps to augment
supply side
TAX
* Proposes surcharge of 10 point on rich taxpayers with
annual income of more than 10 million rupees a year
* 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
* Propose to impose withholding tax of 20 point on profit
distribution to shareholders
* Amnesty on service tax non-compliance from 2007
* 10 billion rupees for first installment of balance of GST
(Goods and Services Tax) payment
* 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
CORPORATE SECTOR AND
MARKETS
* To issue inflation-indexed bonds
* 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
* To implement quickly recommendations of financial sector
legislative reforms commission
* To cut factory gate duty on trucks to 13 pct from 14 pct
POWER AND ENERGY
SECTOR
* Zero customs duty for electrical plants and machinery
* Move to revenue-sharing from profit-sharing policy in oil
and gas sector
* To equalise duties on steam and bituminous coal to 2 point
customs duty and 2 point cvd (countervailing duty)
FOREIGN TRADE
* To cut duty on exports of precious and semi-precious stones
to 2 point from 10 point
* No duty on import of ships, vessels
BANKING
* To provide 140 billion rupees capital infusion in
state-run banks in 2013/14
DEFENCE
* To allocate 2.03 trillion rupees to defence in 2013/14
AGRICULTURE
* To allocate 801.94 billion rupees to rural development in
2013/14
* Plan to allocate 270.49 billion rupees for agriculture in
2013/14
