Eye on elections, India’s FM presents populist budget

Thursday, February 28, 2013
Indian Finance Minister P. Chidambaram arrives at Parliament House along with the Minister
of State for  Finance,
 S.S. Palanimanickam to present the General Budget 2013-14
New Delhi:  Brushing aside speculations regarding spending cuts in the union budget amid high fiscal deficit, Union Finance minister P Chidambaram on February 28 unveiled a budget for fiscal year 2013-14 levying high on super rich but sparing middle class and poor.

The federal budget gives a hint that the government now cannot afford to alienate middle class and poor, already facing heat of inflation with next general elections round the corner. Hence, it proposes to pump more funds in UPA flagship programmes like MNREGA, JNNURM while claiming that the UPA is committed to bring Food Security bill in the Parliament.

Some of the vital announcements made in the budget:

·         Nirbhaya Fund of Rs 1,000 crore -- women and girl child related schemes

·         Rs 150 crore proposed for health scheme for old. Ayurveda, Unani, Homeopathy to be mainstreamed

·         Education to get Rs 65,867 crore, 17 per cent more than last year's RE. Aligarh, Varanasi universities get Rs 100 crore

·         Mid-day meal scheme will get Rs 13,215 crore; Child development scheme to get Rs 17,700 crore

·         MNREGS to get about Rs 33,000 crore

·         Rural Development Schemes to get Rs 80,194 crore

·         Agriculture sector to get Rs 24,049 crore

·         Mobile phones priced over Rs 2,000 to attract 6 per cent duty

·         Defence allocation increased to Rs 2,03,672 crore

·         Tax free bonds in 2013-14 up to Rs 50,000 crore

·         Income limit for tax-savings under Rajiv Gandhi Equity Savings Scheme has been raised to Rs 12 lakh from Rs 10 lakh

·         PSU banks will have ATMs in all their branches by 2014. India's first public sector bank for women proposed with Rs 1,000 crore as initial capital

·         Private FM channels to reach 294 new cities, 839 new channels to be auctioned in 2013-14. All cities with over one lakh population will be covered by private channels

·         Service tax on all A/C restaurants with over 2,000 sq ft proposed

·         Royalty tax hiked from 10% to 25%

·         Import duty on set-top boxes increased to 10% from 5%

·         Import duty on raw silk increased to 15% from 5%

·         Taxing the rich further: Duty on imported goods like motor vehicles, yatchs and motor cycles increased

·         Equalise duty on grades of coal. 2% Customs and CVD duty on coal

·         Duty free limit on gold increased to Rs 50,000 for male passengers and Rs 1 lakh to female passengers

·         Cigarettes hit with an 18% rise in excise duty. So also cigars and cheroots

·         Excise duties on personal SUVs increased Excise duty on SUVs hiked to 30 per cent from 27 per cent. No duty on those used as taxi

·         No CVD on imported parts -- for shipbuilding

·         All silver to attract excise of 4 per cent

·         Surcharge of 10% on people with taxable income of Rs 1 crore or more. Only 42,800 persons with taxable income of over Rs 1 crore. Higher surcharge for only FY 2013

·         Tax slabs remain unchanged

Main opposition party, the BJP has termed the Chidambaram’s eighth budget as ‘accountant’s work’ saying it does not offer anything for manufacturing industries and agriculture sector, the main drivers of economic growth. Leader of opposition Sushma Swaraj said that the budget has nothing for creation of employment for youths. The party also called the budget a ‘verbose’ without any substance.

"The budget is verbose but on substance, extremely low," said leader of opposition in the Rajya Sabha Arun Jaitley.

Prime Minister Manmohan Singh lauded Chidambaram for presenting a ‘commendable’ budget.

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