Promising to halve poverty by 2014 and add 12 million jobs each year, Finance Minister Pranab Mukherjee presented India's budget for this fiscal that hikes income tax exemption limit and steps up allocations for welfare schemes and infrastructure, while assuring high growth for the $1.2 trillion economy once again.
The income tax exemption limit for senior citizens was sought to be hiked by Rs.15,000, while that for women and others was stepped up by Rs.10,000. The 10 percent surcharge on personal income tax also was sought to be removed in Mukherjee's budget presented in the Lok Sabha.
New incentives to farmers, 45 percent jump in funds for Bharat Nirman, India's flagship rural reconstruction programme, higher spending on urban development, fresh impetus on energy security and revival of the divestment programme were among the highlights of the 100-minute Mukherjee's budget.
He also announced that the national food security act will be enacted soon promising 25 kg of rice or wheat per month to the poor at Rs.3 per kg, while announcing a new health insurance scheme for those below the poverty line.
For India Inc, the corporate tax rate was kept unchanged, even as the finance minister sought to reduce the burden on industry by abolishing the commodities transaction tax, but hiked the minimum alternate tax to 15 percent of book profits.
Mukherjee also promised to scrap the fringe benefit tax to please corporates, introduce a pan-India goods and services tax from April next year and gave 100 percent tax deductions to political donations.
Dressed in a smart white bandgala suit, the 73-year-old politician - who had presented his last budget as finance minister in the government of prime minister Indira Gandhi 25 years ago - said the United Progressive Alliance (UPA) government would push forward an agenda that will ensure 12 million new jobs each year and reduce poverty by half by 2014.
"The government also recognises the challenges," he said, referring to the global slowdown and the decline in India's high growth rate in the past year to 6.7 percent from over 9 percent in the preceding three years.
"The first challenge is to bring back the GDP (gross domestic product) growth rate to over 9 percent per annum," he said, setting the tone of what is his fourth career budget watched by Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi.
He said the other challenges included better governance and to ensure that the fruits of development reached across regions to touch the lives of every citizen - the 'aam admi' (the common man) as he called them.
Mukherjee said infrastructure would also be a priority, especially in areas like roads, highways and energy. "I, on my part, will ensure that sufficient funds are made available to these sectors."
The finance minister also said the unique identification plan, approved by the previous UPA government will be operational in 12-18 months and the process begin to hand over biometric smart cards to 1.17 billion citizens.
He said the total central government expenditure for the current fiscal year had been stepped up to Rs.10,20,800 crore, and compared it with Rs.193 crore that was set aside in the country's first budget over six decades ago.
Mukherjee said with industry still under the grip of global recession, the finance minister said he was providing additional incentives in the form of both direct and indirect taxes.
He enhanced the customs duty on items like set-top boxes, LCD televisions and premium textile goods to encourage domestic production and value addition.
The government Monday came to the rescue of a recession-hit media by extending the hike in government advertisement rates for print media by another six months.
Since the print media is still reeling under recession, the government has decided to extend the hike in advertisement rates by another six months, Finance Minister Pranab Mukherjee said Monday while presenting the budget for fiscal 2009-10.
In February, the government had hiked the Directorate of Advertising and Visual Publicity (DAVP) advertisement rates by 10 percent and waived off the 15 percent agency commission till June 30.
The relief is subject to documentary proof of loss of revenue in non-governmental advertisements as compared to the same period last year.
The hikes were announced after some media barons and leaders met then minister of state for information and broadcasting Anand Sharma and sought the government's help to bail them out of the financial crunch due to recession.
Since the new government took charge, top industry representatives met the new information and broadcasting minister, Ambika Soni, and sought a further hike in advertisement rates. The DAVP rate structuring committee finally decided to extend the current special relief package, sources said.
The main opposition Bharatiya Janata Party (BJP) Monday described the 2009-10 budget presented by Finance Minister Pranab Mukherjee as "routine" while the Communist Party of India (CPI) termed it as "inconsequential" and not addressing the real economic issues.
"It is a routine budget. There is no suggestion to meet the global economic recession," BJP president Rajnath Singh told reporters.
He, however, welcomed the government's decision to implement one-rank-one-pension scheme for ex-servicemen and for lifting the fringe benefit tax.
CPI leader Gurudas Dasgupta said: "It is an inconsequential budget. It does not address the main problem that our economy is facing. It does not appear realistic."
Finance Minister Pranab Mukherjee Monday announced a grant of Rs 500 million (Rs.50 crore) for Panjab University in Chandigarh, the alma mater of Prime Minister Manmohan Singh.
"I announce a grant of Rs 50 crore for Panjab University," Mukherjee said in his budget speech.
The university, which is funded by the central and Punjab governments in a 60:40 ratio, will be able to tide over its financial crunch with the latest grant announced by the finance minister.
Prime Minister Manmohan Singh did his graduation and post-graduation in economics from this university in the 1950s. Later, he joined the university as a lecturer and went on to become a professor at the young age of 32 years.
In recent years, the Punjab government has drastically cut down its share of funding to the university, leading to a major resource crunch for the institution.
The Punjab government, after initially agreeing to let Panjab University become a central university, backed out from the move last year saying that the step would make its claim to Chandigarh weaker.
Chandigarh, the joint capital of Punjab and Haryana, is a centrally-administered union territory (UT) which Punjab wants that it should be transferred to the state.
The government will continue to hold at least 51 percent stake in the banks and insurance companies it owns, Finance Minister Pranab Mukherjee said while presenting the union budget for 2009-10 in the Lok Sabha Monday.
However, citing the average public float in listed entities - which is less than 15 percent - the finance minister said the government proposed to increase the non-promoter holding in listed companies.
Mukherjee also praised the late prime minister Indira Gandhi for nationalising bank and insurance companies, which insulated the Indian financial sector from the recent global slowdown.
Bowing to the long standing demand of India Inc, Finance Minister Pranab Mukherjee has abolished the fringe benefit tax and commodity transaction tax.
However, Minimum Allocation Tax (MAT) on book profits has been increased from 10 percent to 15 percent, but with a provision of carrying forward the tax credit on MAT to 10 years from the current seven years.
Finance Minister Pranab Mukherjee Monday proposed to increase the income tax exemption limit for senior citizens by Rs.15,000, for women and others by Rs.10,000 each, while keeping the corporate tax rate unchanged.
The exemption limit will now be Rs.240,000 for senior citizens, Rs.190,000 for women and Rs.160,000 for others.
The allocation for the Jawaharlal Nehru National Urban Renewal Mission has been increased by 87 percent to Rs.12,887 crore, Finance Minister Pranab Mukherjee said while presenting the union budget in parliament Monday.
Additionally, the Indira Awas Yojna, a housing programme for the poor, has been allocated Rs.2,000 crore, while a Rs.2,000-crore special fund has been set up to finance rural housing projects.
Mukherjee also announced a Rs.3,973-crore allocation for urban poor.
The government will raise the the allocation for cleaning India's rivers and lakes to Rs.562 crore ($110 million) in fiscal 2009-10 from Rs.335 crore last fiscal, Finance Minister Pranab Mukherjee announced Monday while presenting the union budget in parliament.
Mentioning that the government had unveiled its National Action Plan on Climate Change last year and that eight national missions under it were being finalised, Mukherjee committed that the government would provide "necessary funds" for all the missions.
The annual economic survey had estimated that India is now spending over 2.6 percent of its GDP in having to adapt to climate change, which is affecting farm output, making droughts, storms and floods more frequent and more severe, and raising the sea level.
The minister also announced special allocations for the Indian Council for Foresty Research and Education, the Botanical Survey of India and the Zoological Survey of India.
The government will set up mega industrial clusters to support textile and power industries, Finance Minister Pranab Mukherjee said Monday while presenting the union budget for 2009-10 in the Lok Sabha.
"We will set up handloom mega clusters in Tamil Nadu and a power mega cluster in Rajasthan," Mukherjee said.
