Highlights of Union Budget 2013-14

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 pct of GDP in 2012/13

* Fiscal deficit seen at 4.8 pct of GDP in 2013/14

* Faced with huge fiscal deficit, India had no choice but to rationalise 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

GROWTH

* India faces challenge of getting back to its potential growth rate of 8 pct

* India must unhesitatingly embrace growth as highest goal

SPENDING

* Total budget expenditure seen at 16.65 trillion rupees in 2013/14

* India’s 2013/14 plan expenditure seen at 5.55 trillion rupees

* Non-plan expenditure estimated at about 12 trillion rupees in 2013/14

* Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13, which is 96 pct 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

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 pct on rich taxpayers with annual income of more than 10 million rupees a year

* To increase surcharge to 10 pct on domestic companies with annual income of more than 100 million rupees

* To continue 15 pct tax concession on dividend received by India companies from foreign units for one more year

* Propose to impose withholding tax of 20 pct 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 pct from 0.017 pct

* Time to introduce commodities transaction tax (CTT)

* CTT on non-agriculture futures contracts at 0.01 pct

CORPORATE SECTOR AND MARKETS

* Plans to issue inflation-indexed bonds

* Proposes capital allowance of 15 pct 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 pct stake in a company will be regarded as FII, more than 10 pct 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

POWER AND ENERGY SECTOR

* Proposes zero customs duty for electrical plants and machinery

* Proposes to move to revenue-sharing from profit-sharing policy in oil and gas sector

* To equalise duties on steam and bituminous coal to 2 pct customs duty and 2 pct cvd (countervailing duty)

FOREIGN TRADE

* To cut duty on exports of precious and semi-precious stones to 2 pct from 10 pct

* 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

FINANCE MINISTER COMMENTS

* “Faced with a huge fiscal deficit, I have no choice but to rationalize expenditure. We took a dose of bitter medicine. It seems to be working.”

Sources: http://timesofindia.indiatimes.com/