Chidambaram presents Union Budget

By agencies   |   Monday, 28 February 2005, 08:00 Hrs
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NEW DELHI: Presenting UPA's second Union Budget, Finance Minister P Chidambaram today said the government is committed to the greatest good for the greatest number.

Chidambaram said the investment climate is buoyant for the next fiscal. And expects the economy to grow by 6.9 per cent in 2005-06 and the industry to grow by 8.9 per cent.

He reiterated the UPA government's commitment to employment generation, universal access to education and giving boost to manufacturing.

He announced that the revenue deficit estimated at Rs 95,312 crore and fiscal deficit at Rs 1,51,144 crore. While the revenue deficit put at 2.7 per cent of GDP and fiscal deficit at 4.5 per cent of GDP for 2004/05.

Plan expenditure for 2005/06 put at Rs 1.72,000 crore as against Rs 1,43,000 crore in the current year.

The increased sum would be raised as loans for state governments. Non plan expenditure gone up to Rs 3,73,800 crore mainly due to 12th Finance Commission recommendations.

The following are the highlights of the budget:

Budget outlay fixed at 5,143 billion ($116 billion).

Revenue deficit at 953.12 billion or 2.7 percent of Gross Domestic Product (GDP).

Fiscal deficit pegged at 171.99 billion or 4.3 percent of GDP.

Personal income tax slabs altered. No tax on income of up to 100,000

Women earning up to 125,000 exempted from tax

Senior citizens with income of 150,000 exempted from tax

Standard deduction and income tax rebate under section 88, 80L abolished.

10 percent tax on income of 100,000 to 150,000.

20 percent tax on income of 150,000 to 250,000

30 percent tax on income above 250,000

No surcharge on income up to 1 million.

Tax exemptions under housing loan interest, medical insurance premium to continue.

Proposal to levy 0.1 percent or 10 on cash withdrawals of 10,000 or more from one's bank account on a single day.

Nominal increase in the securities transaction tax

New corporate tax structure with 30 per cent corporate income tax rate for domestic companies plus 10 per cent surcharge

Customs duty structure to be brought closer to that of East Asian countries. Peak rate for non-agricultural products reduced from 20 per cent to 15 per cent.

Relief in customs duty to leather and footwear, pharmaceuticals, biotechnology, IT industries.

Allocation of 110 billion for National Rural Employment Guarantee scheme.

National rural health mission to be launched.

Cigarettes, tobacco products to cost more.

Branded jewellery to attract 2 percent levy.

Special package of 4.5 billion for highway development in the northeastern region.

National agricultural insurance scheme's purview extended to cover kharif or summer crop too from 2005-06.

Rural knowledge centres to be set up in every village.

NABARD to work out scheme for providing financial package to the sugar industry.

66,822 more villages to be provided public telephone connections.

Food for work programme to be launched in 250 more districts.

Backward regions grant fund to be established with allocation of 50 billion.

125,000 more villages to be electrified by 2010.

Creation of 10 million jobs planned by bringing 10 million hectares of land under agriculture over next five years.

Seven million additional jobs in IT by 2009.

Allocation for education sector to increase to 180.33 billion in 2005-06.

Allocation for rural development to increase to 180.34 billion.

Subsidy for fertiliser estimated at 160.25 billion.

Two thousand fellowships for Scheduled Castes/Scheduled Tribes students for pursuing M.Phil/Ph.D from select universities in 2005-06.

Work on six All India Institute of Medical Sciences (AIIMS)-like institutes to commence in 2005-06.

79 billion special economic package for rural Bihar

Jammu and Kashmir to receive additional assistance of 42 billion.

Adequate funds to be earmarked for Baglihar dam project in Jammu and Kashmir in 2005-06, in addition to 3 billion allocated in 2004-05.

Agriculture production to be expanded by enhancing public, private investment.

6.3 billion to be allocated in 2005-06 for new National Horticulture Mission.

45 billion allocation planned for Accelerated Irrigation Programmes in 2005-06.

Outlay of 300 billion for nurturing textile sector in post-quota regime.

10 percent capital subsidy scheme proposed for textile processing sector.

Life insurance scheme proposed to cover two million handloom weavers in next two years at a cost of 300 million.

Manufacturing competitiveness programme to be launched to help small and medium enterprises.

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