General Budget 2009-10 - Highlights

Highlights of Union Budget 2009:

Advantage Infrastructure

• Rs 1 lakh crore projects for Infrastructure revival
  
• IIFCL and banks in position to support Rs 1,00,000 cr in infrastructure
  
• Highway and railways: Allocation hiked by 23%
  
• Stepped up allocation of funds from Rs 10,800 cr to Rs 15,800 cr for railways

• Govt have some success in attracting investments in certain sectors through PPP
  
• Allocation for Mumbai flood management hiked

Impact & outcome

Cheaper: Footwear, LCD TVs, branded jewellery, drugs for heart treatment, bulk drugs, textiles

Dearer: Mobile phones, set-top boxes, gold bars, gold and silver import

Tax slabs raised

• Income tax exemption limit for others raised by Rs 10,000 (Rs 1.5 lakh to Rs 1.6 lakh)

• Income tax exemption limit for women raised by Rs 10,000 (Rs 1.80 lakh to Rs 1.90 lakh)

• Income tax exemption limit for senior citizens raised by Rs 15,000 (Rs 2.25 lakh to Rs 2.40 lakh)

• 10% surcharge in Direct Taxes scrapped

• Individual law consultation not to attract service tax

• I-T Saral II form to be introduced

• No change in corporate taxation

• SEC 80IB benefit extended to natural gas

• Investment-linked tax benefits for gas pipelines, cold chains

• Sunset clause for Software Technology Parks of India (STPIs) extended by 1 year

• Minimum alternate tax increased to 15% from 10% of book profit

• Section 80DD to be hiked to Rs 1 lakh
• Fringe benefit tax scrapped

What is in it for you?

• Govt to spend Rs 120 cr in FY10 on unique ID

• Certain pension-related benefits extended to war-hounded

• National Web Portal for employer and employee to be launched

• Stepped up allocation of funds from Rs 10,800 cr to Rs 15,800 cr for railways

• Aila hurricane relief at Rs 1,000 cr
  

What Young India gets?

• Employment exchanges to be modernised

• Interest subsidy for educational loans

• Plan to cut female illiteracy by half in three yrs

• To launch national mission on female literacy
  

What Agriculture sector gets?

• Rashtriya Krishi Vikas Yojna stepped up by 30%

• Agri credit for at Rs 3.25 lakh crore for 09-10

• Budget makes subvention of 1% to benefit farmers

• Proposes to extend deadline to farmers to pay off 75% of loans by six months to December 31, 2009

• Ensure 4% agriculture growth
  

What Rural India gets?

• To provide Rs 2000 cr for rural housing

• Banking facilities in remote areas in next 3 years

• To add handloom clusters in West Bengal and Tamil Nadu

• Govt aims to have social security for informal sector

• PM's Adarsh Gram Yojana starts with Rs 100 cr funding
• NHB refinance to rural housing sector to be raised

• Indira Awaas Yojana outlay increased by 63%

• Bharat Nirman outlay raised by 59%

• Food security to provide rice, wheat at Rs 3 a kg to poor

• Allocation for Indira Awaas Yojana to be increased by 63%
• Govt. to move food security bill very soon

• NREGA outlay increased by 144%

• NREGA min wages set at Rs 100/day

• Special fund of Rs 4,000 cr from Rural Infra Dev fund to provide cheap loans to MSME
  

PSUs: Disinvestment on backburner

• PSU companies to remain under government control

• Govt wants public shareholding in PSUs to go up

• PSUs to remain under govt control

• Govt to set-up expert committee to advise on petro pricing products

• PSU Banks, insurance firms outside disinvestment plan

• There are signs of revival in domestic industry

Sops for industry

• Construction: Restore full exemption on goods such as pre-fabricated slabs

• Branded jewellery exempted from excise duty

• Tax holiday on commercial production of mineral oil and natural gas on NELP VIII

• MAT hiked to 15% of book profit from 10%

• To introduce GST by April 1, 2010

• Govt wants public shareholding in PSUs to go up
• PSUs to remain under govt control

• PSU Banks, insurance firms outside disinvestment plan

• Exporters borne the brunt of eco crisis, will provide adj assistance till March 2010

• IIFCL and banks in position to support Rs 1,00,000 cr in infrastructure
• Infra investment to be over 9% of GDP by 2014

• Gross capital flow rose to over 9% over GDP
  

Financial sector: The road ahead

Budget estimates: Interest payment expected at Rs 2,25,511 cr

• 8.5% growth in recent past fueled by pvt sector investment

• PSU Banks, insurance firms outside disinvestment plan

• Turbulence in world markets left Indian financial sector unaffected

• Fiscal deficit up to 6.2% from 2.7% fo GDP

• IIFCL and banks in position to support Rs 1,00,000 cr in infrastructure

Defence Budgets

• To spend Rs 1.42 lakh cr on defence
  
• Govt to build 100,000 homes for paramilitary forces
  
• Paramilitary housing project to cost Rs 1,000 cr
  
• Certain Pension related benefits extended to war hounded
  
• Paramilitary housing cost estimated at Rs 1,000 cr
  
• Govt proposes to launch housing for 1 lakh para military forces
  

Challenges ahead

• Fiscal deficit grew from 2.7% to 6.8% of GDP
  
• To lead the economy back to 9% growth
  
• Growth rate in 2008-09 dipped to 6.7% from average 9 % growth in previous 3 fiscal years