2010 Union budget of India

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2010 (2010) Union Budget of India
2009
2011
Submitted February 26, 2010
Submitted by Pranab Mukherjee
Website http://indiabudget.nic.in/

The Union budget of India for 2010-11 was presented by Finance minister Pranab Mukherjee in the Lok Sabha on Friday, February 26, 2010.[1][2]

Highlights[edit]

  • The Indian economy was facing grave uncertainty. Growth had started decelerating when the interim and full budget for 2009-10 were presented.
  • At home there was added uncertainty because of subnormal southwest monsoon.
  • Yet, the economy now in a far better position than it was eight years ago.
  • India weathered the economic crisis well and emerged from the global slowdown faster than any other country.
  • First challenge before the government is to quickly revert to high GDP growth path of 9%.
  • Expects 10% economic growth in the near future.
  • Second challenge is to harness economic growth to make it more inclusive and consolidate gains.
  • Third challenge is to overcome weakness in government's public delivery mechanism; a long way to go in this.
  • Impressive recovery in the past few months. Can witness faster recovery in the coming months.
  • Food security has been strengthened. But bottleneck of the public delivery mechanism can hold us back.
  • Fiscal year 2009-10 was challenging for the economy.
  • Focus shifted to non-governmental actors and an enabling government. Government now concentrates on supporting and delivering services to the poorer sections.
  • Economy stabilised in the first quarter of 2009 itself.
  • 18.5% manufacturing growth in December was the highest in two decades.
  • Figures for merchandise exports for January encouraging after turnaround in November and December last year.
  • Double digit food inflation last year due to bad monsoon and drought-like conditions.
  • Government conscious of the price rise and taking steps to tackle it.
  • Erratic monsoon and drought-like conditions forced supply-side bottleneck that fuelled inflation.
  • Need to review stimulus imparted to economy last year to overcome the recession.
  • Need to ensure that the demand-supply imbalance is managed.
  • Need to make growth more broad-based.
  • Need to review public spending and mobilise resources.
  • Status paper on public debt within six months.
  • Government hopes to implement direct tax code from April 2011.
  • Earnest endeavour to implement general sales tax in April 2011.
  • Government will raise INR25,000 crore from divestment of its stake in state-owned firms.
  • Kirit Parekh report on fuel price deregulation will be taken up by petroleum minister Murli Deora in due course.
  • Nutrient-based fertiliser subsidy scheme to come into force from April 1 this year.
  • Nutrient-based fertiliser subsidy will reduce volatility of subsidy and also reduce it.
  • Market capitalisation of five public-sector undertakings listed since October increased by 3.5 times.
  • FDI inflows steady during the year. Government has taken series of steps to simplify FDI regime. Intends to make FDI policy user friendly by compling all guidelines into one document.
  • Government has decided to set up apex-level Financial
  • Stability and Development Council.
  • RBI considering issuing banking licences to private companies. Non-banking finance companies will also be considered if they meet the criteria.
  • Government to provide INR16,500 crore to public-sector banks to maintain tier-I capital.
  • Government to continue interest subvention of 2% for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.
  • Government to provide INR300 crore to organise 60,000 pulse and oilseed villages and provide integrated intervention of watershed and related programmes.
  • INR200 crore provided for climate-resilient agriculture initiative.
  • Government committed to ensuring continued growth ofspecial economic zones
  • Need to take firm view on opening up of the retail sector.
  • Deficit in foodgrains storage capacity to be met with private-sector participation.
  • Period for repayment of loans by farmers extended by six months to June 30, 2010, in view of the drought and floods in some parts of the country.
  • Interest subvention for timely repayment of crop loans raised from 1% to 2%, bringing the effective rate of interest to 5%.
  • Road transport allocation raised by 13% to INR19,894 crore.
  • Proposal to maintain thrust of upgrading infrastructure in rural and urban areas. IIFCL authorised to refinance infrastructure projects.
  • INR1,73,552 crore provided for infrastructure development.
  • Allocation for railways fixed at INR16,752 crore, an increase of INR950 crore over the last financial year.
  • Government proposes to set up Coal Development Regulatory Authority.
  • Mega power plant policy modified to lower cost of generation; allocation to power sector more than doubled to INR5,130 crore in 2010-11.
  • Government favours competitive bidding for coal blocks for captive power plants.
  • INR500 crore allocated for solar and hydro projects for the Ladakh region in Jammu & Kashmir.
  • Clean Energy Fund to be created for research in new energy sources.
  • Allocation for new and renewable energy ministry increased by 61% to INR1,000 crore.
  • One-time grant of INR200 crore provided to Tirupur textile cluster in Tamil Nadu.
  • Allocation for National Ganga River Basin Authority doubled to INR500 crore.
  • Alternative port to be developed at Sagar Island in West Bengal.
  • Draft of Food Security Bill ready, to be placed in the public domain soon.
  • Outlay for social sectors pegged at INR1,37,674 crore, accounting for 37% of the total plan allocation.
  • Plan allocation for school education raised from INR26,800 crore to INR31,036 crore in 2010-11.
  • 25% of plan outlay earmarked for rural infrastructure development.
  • Plan allocation for health and family welfare increased to INR22,300 crore from INR19,534 crore.
  • For rural development, INR66,100 crore have been allocated.
  • Allocation for National Rural Employment Guarantee Authority stepped up to INR40,100 crore in 2010-11.
  • Indira Awas Yojana's unit cost raised to INR45,000 in the plains and INR48,500 in hilly areas.
  • Allocation for urban development increased by 75% to INR5,400 crore in 2010-11.
  • 1% interest subvention loan for houses costing up to INR20 lakh extended to March 31, 2011; INR700 crore provided.
  • Allocation for development of micro and small-scale sector raised from INR1,794 crore to INR2,400 crore.
  • INR1,270 crore provided for slum development programme, marking an increase of 700%.
  • Government to set up National Social Security Fund with initial allocation of INR1,000 crore to provide social security to workers in the unorganised sector.
  • Government to contribute INR1,000 per annum to each account holder under the new pension scheme.
  • Exclusive skill development programme to be launched for textile and garment-sector employees.
  • Allocation for woman and child development increased by 80%
  • Plan outlay for the social justice ministry raised by 80% to INR4,500 crore.
  • Plan allocation for minority affairs ministry raised from INR1,740 crore to INR2,600 crore.
  • Financial-Sector Legislative Reforms Committee to be set up.
  • INR1,900 crore allocated for Unique Identification Authority of India.
  • A unique identity symbol will be provided to the rupee in line with the US dollar, British pound sterling, euro and Japanese yen.
  • Defence allocation pegged at INR1,47,344 crore in 2010-11 against INR1,41,703 crore in the previous year. Of this, capital expenditure would account for INR60,000 crore.
  • Planning Commission to prepare integrated action plan for
  • Naxal-affected areas to encourage "misguided elements" to eschew violence and join the mainstream.
  • Gross tax receipts pegged at INR7,46,656 crore for 2010-11, non-tax revenues at INR1,48,118 crore.
  • Total expenditure pegged at INR11.8 lakh crore, an increase of 8.6%.
  • Fiscal deficit at 5.5%.
  • Fiscal deficit seen at 4.8% and 4.1% in 2011-12 and 2012–13, respectively.
  • Non-plan expenditure pegged at INR37,392 crore and plan expenditure at INR7,35,657 crore in budget estimates. Proposed increase of 15% in plan expenditure and 6% in non-plan expenditure.
  • Cash subsidy for fuel and fertiliser instead of previous practice of bonds to continue.
  • Fiscal deficit pegged at 6.9% in 2009-10 as against 7.8% in the previous fiscal.
  • Government's net borrowing to be INR3,45,010 crore for 2010-11.
  • Income-tax department ready with two-page Saral-2 returns form for individual salaried assesses.
  • Personal income-ax rates pruned:
    • Income up to INR1.6 lakh — nil
    • Income above INR1.6 lakh and up to INR5 lakh — 10%
    • Income above INR5 lakh and up to INR8 lakh — 20%
    • Income above INR8 lakh — 30%
  • Additional deduction of INR20,000 allowed on long-term infrastructure bonds for income-tax payers; this is above INR1 lakh on savings instruments allowed already.
  • Investment-linked tax deductions to be allowed to two-star hotels anywhere in the country.
  • Weighted deduction of 125% for payments to approved associations doing social and statistical research.
  • One-time interim relief to housing and real-estate sector.
  • Businesses with a turnover of up to INR60 lakh and professionals earning up to INR15 lakh to be exempted from the obligation to audit their accounts.
  • Housing projects allowed to be completed in five years instead of four to avail of tax breaks.
  • Revenue loss of INR26,000 crore on direct tax proposals.
  • Central excise duty on all non-petroleum products raised to 10% from 8%.
  • FM increases customs duty on crude oil to 5%, on diesel and petrol to 7.5%, and on other petroleum products to 10%.
  • Structural changes in excise duties on cigarettes, cigars, and cigarillos.
  • Clean energy cess of INR50 per ton to be levied on coal produced in India.
  • Concessional excise duty of 4% on solar cycle-rickshaws.
  • Balloons exempted from central excise duty.
  • Customs and central excise proposals to result in a net revenue gain of INR43,500 crore.
  • More services to be brought under the service tax net.
  • Certain accredited news agencies exempted from payment of service tax.
  • Net revenue gain from tax proposals pegged at INR20,500 crore.

See also[edit]

References[edit]

  1. ^ "Key features of Union Budget 2009-2010". Indian Express. Jul 6, 2009. 
  2. ^ "Union Budget 2010: Renewable energy sector earmarked Rs 380 crore more". The Economic Times. 26 Feb 2010. 

External links[edit]