UNION BUDGET 2013-2014

From the Team ,

ANAND M SHETTY

INTRODUCTION
Union Finance Minister P. Chidambaram presented Budget 2013-14 in the Lok Sabha on 28-Feb. He said that India will become USD 5 trillion economy, and among top five in the world by 2025.

TAXES

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

TAXES

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

TAXES

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

TAXES

18% rise in excise duty on Cigarettes, cigars and cheroots 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 cr Defence allocation Rs 203,672 cr

Education Rs 65,867 cr
Rural Development Ministry Rs 80,194 cr

MAJOR EXPENDITURE & ALLOCATIONS (CONTD..)

Ministry of Technology Rs 6275 cr

Department of Space Rs 5216 cr

Department of Energy Rs 5280 cr Eastern Indian states to get Rs 1,000 cr

MAJOR EXPENDITURE & ALLOCATIONS (CONTD..)

Programme on crop diversification - Rs 500 cr Agriculture Ministry Rs 27,049 cr JNNURM for urban transportation Rs 14,873 cr Ministry of Drinking Water and Sanitation Rs 15,260 cr NABARD for agri storage facilities - Rs. 5,000 cr

MAJOR EXPENDITURE & ALLOCATIONS (CONTD..)

To make post offices part of core banking Rs 532 cr Mid-day meal programme Rs 13215 cr 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 , Rs. 27,250 crore to Sarva Shikhsa Abhiyaan.

OTHER ANNOUNCEMENT

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.

Indias first womens bank as a PSU proposed, Rs. 1,000 crore working capital announced

OTHER ANNOUNCEMENT (CONTD..)

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 Food grain production in 201213 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

SUBSIDIES
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