India--Chidambaram focus on social benefits, avoids populism
Finance Minister P. Chidambaram in his Union Budget for 2013-14 on Thursday laid emphasis on health, education, women and child welfare, sops for farmers but did not do much to exempt the income-tax levels.
In a move that will bring cheer to many prospective home-owners, Chidambaram announced incentives for home loan borrowers borrowers in his Budget speech. Chidamabram said that any person taking a first time home loan up to Rs 25 lakh during the financial year 2013-14 will be allowed an additional tax deduction of of interest of up to Rs 1 lakh. The Finance Minister said that the move will help promote affordable housing and also provide employment to many in the construction sector.
There will be no change in tax rates or slabs for FY14, he said in his Budget speech. However, he announced a tax credit of Rs 2500 for Rs 2-5 lakh tax payers bracket.
Chidambaram said that only 42,800 people in India last year declared a taxable income over Rs 1 crore. Therefore, he levied a surcharge of 10% on people earning a taxable income of Rs 1 crore and above.
India will soon get its first women's public sector bank , which will lend mostly to women and be staffed with women employees, Chidambaram said. He added that a sum of Rs 14,000 crore will be meant for capital infusion in public sector banks.
In an attempt to cheer the youth of the country, the minister in his speech announced allotting Rs 1 lakh crore to expand their skills. "Skill training will be given to boost employment and productivity," Chidambaram said. "10 lakh youth can be motivated in one year," he added. Union Budget's overarching goal is to create opportunities for our youth, Chidambaram said.
Chidambaram started his speech by reiterating the resolve of his government to cut expenditure and bring the Current Account Deficit back on track. He also pointed out how India is still the third fastest growing economy amongst the bigger countries.
As the speech progressed, the FM went on to reiterate UPA's pet goal of inclusive development. he subsequently announced many schemes & allocations for SC, ST, women, differently-abled and other schemes such as Sarv Shiksha Abhiyan & provided additional allocation for the food security plan.
Chidambaram said that India needs to attract more investment, both domestic and foreign. "Investment is an act of faith and we will take policy measures to remove fears in the minds of investors," Chidambaram said. "Doing business in India should be seen as easy, friendly and mutually beneficial," Chidambaram emphasized. He said that the government will take due measures to encourage the same.
Chidambaram highlighted the need to attract investment in the infrastructure sector. He announced measures such as infrastructure debt funds to encourage investments.
Following are highlights of the Budget:
* Faced with huge fiscal deficit, India had no choice but to rationalize expenditure
* India faces challenge of getting back to its potential growth rate of 8 pct
* India must unhesitatingly embrace growth as highest goal
* Total budget expenditure seen at 16.65 trillion rupees in 2013/14
* India's 2013/14 plan expenditure seen at 5.55 trillion Indian rupees ($103 billion)
* 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
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
* Food inflation is worrying, will take all steps to augment supply side
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
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 allocate 801.94 billion rupees to rural development in 2013/14
* Plan to allocate 270.49 billion rupees for agriculture in 2013/14
- Asian Tribune -