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Defence
outlay up by Rs 13,000 crore NEW DELHI, Feb 29 — In the steepest hike in defence allocation ever, Finance Minister Yashwant Sinha today raised the budget for the ministry by almost Rs 13,000 crore to Rs 58,587 crore for the modernisation of the armed forces to meet the post-Kargil challenges. The Budget for 2000-2001 sees expenditure on defence doubling from Rs 29,505 crore only five years ago. Defence experts had for long been demanding such a hike keeping in view the urgent need for state-of-the-art military hardware for the three services and electronic surveillance systems. While in 1996-97, the budget estimate was Rs 29,505 crore subsequent years saw it rise to Rs 35,277 crore, Rs 41,200 crore and Rs 45,694 crore in 1997-98, 1998-99 and 1999-2000, respectively. The Kargil review committee this month also said that a number of experts had suggested the need to enhance defence outlay as budgetary constraints had affected the process of modernisation and created certain operational voids. It said among aspects of modernisation to which priority should be given is that of equipping infantrymen with superior light weight weapons, equipment and clothing suited to the threats they face in the icy heights. The Finance Minister said the largest ever increase in the Budget, up 28.2 per cent from last year, showed his government’s resolve to not compromise on the safety and security of the country. Defence spending in 1998-99 was close to Rs 52,000, including the supplementary demands. The outlay then was 2.3 per cent of the Gross Domestic Product (GDP) which has gone up to around 2.5 per cent this year. The defence needs have further heightened after the Kargil conflict last summer which highlighted the ‘gross inadequacies’ in the country’s surveillance capability, particularly through satellite imagery. The Subrahmanyam committee recommended immediate acquisition of high altitude unmanned aerial vehicles (UAVs) with night vision and thermal imaging capabilities. It also said there was urgent need for communication interception equipment and satellite imagery capability of world standards. Maintaining troops along the LoC in Kargil sector has resulted in additional financial burden of nearly Rs 10 crore a day. The three services after the Kargil episode have drawn up their lists for weapons and force multipliers. The Indian Air Force has plans to acquire 60 advance jet trainers and Mirage-2000 fighters while the Army needs T-90 tanks, weapon locating radars, self propelled guns and multi-barrel rocket launchers. The Army will also be acquiring UAVs and electronic warfare systems. Defence experts have been urging for a substantial increase in defence spending which they say is very low compared to the allocations made by countries like Pakistan and China. Pakistan’s defence spending at $ 2.8 billion last year was 4.7 per cent of their GDP. According to the Budget presented today, this year’s allocation for defence was also among the highest in the terms of the GDP in the recent years. It was almost 2.5 per cent of the GDP, which was not in the keeping with the trend of a steady drop in the allocation which has been seen over the past 10 years. The outlay last year was 2.33 per cent of the GDP. Presenting the Budget, Mr Sinha said: “We shall not shirk from making any sacrifice to guard and protect every inch of our beloved motherland.” The experts pointed out that this rise would be a great booster to the armed forces specially as in the past the increase in the allocation was at a standstill in real terms. While last year the rate of inflation was 7.5 per cent, the military index of inflation was much higher. Besides, keeping in mind the depreciation of the rupee, which was about 10 per cent, the allocation for the armed forces had been at a standstill in real terms, despite a rise of almost Rs 4,570 crore over the revised estimates. Army chief V.P. Malik told PTI that “substantial increase” in capital outlay would boost armed forces’ modernisation which had suffered in recent years. The Air Force budget, which has been hiked from last year’s Rs 6159.73 to Rs 7896.03 crore, shows a jump of Rs 1736 crore. The Naval outlay has been increased to Rs 4040.47 crore from last year’s revised Budgetary estimates of Rs 3596.96 crore, a hike of over Rs 444 crore, as also an allocation of Rs 682.50 crore in capital outlay. The additional funds for
the Navy could look after the induction of a second
aircraft carrier, possibly Russian “Admiral
Gorshkov” and spares for frontline Russian
equipment. Sops for women, senior citizens NEW DELHI, Feb 29 — The Finance Minister, Mr Yashwant Sinha, today decided not to touch personal taxation while announcing some sops to senior citizens and women by enhancing tax rebate level to Rs 15,000 as part of direct tax proposals in the Union Budget presented to Parliament. Mr Sinha also proposed to extend the scheme of tax exemption for pension and family pension of gallantry awards winners of defence forces to those of paramilitary and other forces. However, he proposed to increase the surcharge on total taxable income for non-corporate taxpayers having an income of over Rs 1.50 lakh from 10 per cent to 15 per cent. “Having restrained myself from imposing any additional taxes during the course of the year when there was much talk of a Kargil tax, I now propose increasing the surcharge moderately from 10 per cent to 15 per cent,” he said. For senior citizens, he had proposed to raise tax rebate from Rs 10,000 to Rs 15,000 and Rs 5,000 additional rebate for women taxpayers, subject to overall ceiling of Rs 15,000 if they were also senior citizens. The income tax rebate level on repayment of housing loan has been enhanced to Rs 20,000 per annum and tax payers who now own a house can still make an investment in a new house and claim exemption from capital gains tax. The maximum amount of repayment of loan to higher education has been raised to Rs 40,000 for allowable deduction. To strengthen capital markets, he proposed to provide 100 per cent exemption to income of investors protection funds of stock exchanges. The rate of tax on dividends distributed by domestic companies has been raised to 20 per cent while dividend income in the hands of shareholders will remain tax free. The tax rate on income
distributed by debt-oriented mutual funds and UTI has
been hiked to 20 per cent. However, income distributed
under the US-64 and other open-ended equity oriented
schemes of the UTI and mutual funds will continue to
remain exempt. The interest rate of 2 per cent on bank
and financial institutions has been abolished to benefit
the financial sector. |
Rs 5,000-crore plan to meet 5 rural needs NEW DELHI, Feb 29 (UNI) — A new scheme, Pradhan Mantri Gramodaya Yojana, has been launched to undertake time-bound programmes to fulfil the five basic rural needs — primary education, health care, drinking water, housing and rural roads. Announcing this, the Finance Minister, Mr Yashwant Sinha, said a sum of Rs 5,000 crore had been provided separately in the budget for the scheme. Out of this, Rs 2,500 crore would be earmarked for launching a nationwide programme for constructing rural roads and improving rural connectivity. Under the scheme, Central assistance would be provided to states for implementing specific projects in the identified sectors. The ministries concerned in the Central Government would lay down the guidelines and monitor the implementation of these programmes. The erstwhile basic minimum services scheme would be merged with the new scheme. As far as the other basic rural needs were concerned, there was a new initiative in elementary education. This was a scheme for universalisation of elementary education and would be called ‘the Sarva Shiksha Abhiyan’. The scheme would enable enrolment of all children by 2003 and expansion of the district primary education programme to cover the remaining districts in Uttar Pradesh, West Bengal, Orissa and Gujarat. Moreover, the National Literacy Mission (NLM) would be revamped so that the literacy rate could be raised to 75 per cent by 2005. The plan allocation for elementary education had been increased from Rs 2931 crore to Rs 3729 crore. The outlay for the
Department of Drinking Water Supply in the Ministry of
Rural Development had been enhanced to Rs 2,100 crore
from Rs 1,807 crore. It was proposed to cover around
60,000 habitations and 30,000 schools in the next year.
The reproductive and child health programmes would
receive Rs 1,051 crore as against an allocation of Rs 695
crore in 1999-2000. For rural housing schemes, a
provision of Rs 1,710 crore has been made. |
Little for common man in Budget NEW DELHI, Feb 29 (UNI) — There is little in the Budget for the common man and the small investor, was the common complaint of the general public to the proposals unveiled by Finance Minister Yashwant Sinha. However, some people said they were “relieved” that the Budget was not “harsh” as had been expected and there was no additional burden on personal taxation barring a 5 per cent increase in the surcharge on those earning more than Rs 1,50,000 per year. Mr M.L. Sachdeva, a retired government advocate, welcomed the additional Rs 5,000 rebate given to senior citizens in personal income tax but added that it would have been better if senior citizens were exempted from paying tax altogether, keeping in view the high cost of living. Mrs Uma Singh, a government school teacher, while happy at the additional Rs 5,000 rebate for working women in income tax, said it was “disappointing” that the BJP had “forgotten” its earlier promise to hike the exemption limit from Rs 50,000 to Rs 1 lakh. The proposal to impose a single excise rate central value added tax of 16 per cent in place of the earlier three-slab rate of 8, 16 and 24 per cent would mean that certain consumer goods would be costlier. The reduction in fertiliser subsidy and the failure of the government to bridge the fiscal deficit combined with the burden of indirect taxes would mean that the poor people and the middle class would be hit while the rich would be spared, said Mr Rahul Verma, a former trade unionist. Women’s rights activist Brinda Karat also criticised Mr Sinha for not increasing the allocation for the social sector and wondered from where the minister would get the money for the proposed upgradation of rural infrastructure. “While everyone keeps emphasising reduction in expenditure, why is nobody talking about taxing the rich to meet the fiscal deficit. India continues to have among the lowest tax-to-GDP ratios in the world,” she added. As for doubling of the PDS allocation for the families below the poverty line (BPL), the government should first of all give a proper definition of the BPL families. “It is a tough Budget for the poor, not for the rich,” Ms Karat said. Dr Suneet Khanna, a practising physician, said the rationalisation of excise duty would mean higher prices of items like cars and air conditioners. However, he was happy that oxygen and life-saving drugs had been exempted from duty as had been household items like diapers and children’s toiletries. The proposed decrease in excise duty from 24 to 16 per cent on cars for handicapped persons was also praised. The exclusion of sugar
from the PDS entitlement of income tax payees would mean
an increase in the price of this commodity and an
additional burden on the middle class, said Mr P.
Bhargava, a journalist. |
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NEW DELHI, Feb 29 (UNI) — The Finance Minister today announced reduction in the peak rate of customs duty from 40 per cent to 35 per cent and reduced the slabs from five to four.The four slabs of import duty are: 5 per cent, 15 per cent, 25 per cent, and 35 per cent. The Finance Minister retained the 10 per cent surcharge, which will also apply to the new peak rate of 35 per cent. Crude oil and petroleum products and a few WTO, bound items and gold and silver would continue to be exempted. The Budget, while continuing with the special additional duty of customs, also extended it to manufacturers-importers. Presenting the Budget, the Finance Minister also announced major cuts in customs duty in the areas of information technology (IT), telecommunications, entertainment sector, jewellery, petroleum and crude oil. Agricultural and horticultural products will attract customs duty at the peak rate of 33 per cent (plus surcharge). This will provide adequate protection to farmers in the light of the proposal of several hundred items being placed on the free list of imports from April 1, 2000. In IT sectors 5 per cent duty reduction has been announced for computers, mother boards, floppy diskettes, microprocessors, memory storage devices, CD-ROMS, integrated circuits and microassemblies and data graphic display tubes, duty on specified capital goods for manufacture of semiconductor and ICS has been reduced from 15 per cent to 5 per cent. In telecommunications, specified raw materials for manufacture of optical fibres has been reduced from 15 per cent to 5 per cent. On cellular phones reduction has been from 25 per cent to 5 per cent and on their battery packs from 40 per cent to 15 per cent. Now Internet service providers will also be benefited from the concessional rate of 5 per cent basic duty applicable to specific telecom equipment. Basic customs duty on platinum and non-industrial diamonds has been reduced from 40 per cent to 15 per cent in order to boost jewellery exports. In order to give effect to agreements with the European Union and USA, several varieties of fabrics and garments would be subjected to higher ad-valorem or specific rates of duties prescribed for them. Basic customs duties on crude oil has been reduced from 20 per cent to 15 per cent and on petroleum products from 30 per cent to 25 per cent. However, on kerosene for parallel marketing, the basic duty will be raised to 35 per cent from 30 per cent. In order to encourage
payment of tax due, the Finance Minister has proposed
that if the amount of tax evaded is paid along with
interest within 30 days of communication of order, a
penalty equal to only 25 per cent of the duty evaded
would be payable as against 100 per cent earlier. |
Congress serves notice on leakage NEW DELHI, Feb 29 (UNI, PTI) — The Congress has served a notice of breach of privilege demanding the resignation of the Finance Minister, Mr Yashwant Sinha, for ‘leakage’ of certain portions of the Union Budget proposals to a multinational news agency before it was presented to the Lok Sabha today.The privilege notice against the Finance Minister was served to the speaker, Mr G.M.C. Balayogi, by the chief whip of the Congress, Mr Priyaranjan Dasmunshi, minutes before he presented the Budget this afternoon. Mr Dasmunshi raised the issue briefly in the House but was told by the Speaker that his notice was under consideration. Talking to newspersons, the Congress leader said from a cursory glance of the Budget proposals it was clear that Budget proposals relating to infotech, petroleum, polyster and farm houses had been leaked by the news agency. Consequently, the stocks belonging to this sector skyrocketed in the Mumbai Stock Exchange even before the Budget was presented. The notice said the Congress had authentic information that the Budget had been leaked before it was presented to the Lok Sabha. Quoting Rule 204 of the House relating to presentation of the Budget, the notice contended that it amounted to breach of privilege of the entire House and therefore the Finance Minister should tender his resignation. The charge of Budget leakage was made by Mr P.R. Dasmunsi as the House reassembled for the presentation of the Budget saying the leak was a serious matter. He was supported by several of his party colleagues. Mr Balayogi said he had received the notice 10 minutes before the House reassembled. “Since it (the notice) is under my observation, it is not proper to raise the matter,” he said asking the Finance Minister to present the Budget. The presentation of the budget got delayed for 10 minutes in the process. Urging the Speaker to take up his privilege notice, Mr Dasmunshi said, “We have reasons to believe that the taxation proposals have been leaked before the presentation of the budget.” If it tallied, the government should resign, he said. Ms Renuka Chowdhury, also of the Congress, sought the Chair’s permission to present to the House “salient features” of the Budget much to the amusement of all present. At one stage, Parliamentary Affairs Minister Pramod Mahajan angrily stood up to protest the repeated interruptions from the Opposition benches. Deputy Leader of Congress, Madhavrao Scindia said the minister should not lose his temper. Speaker GMC Balayogi observed, “It is unfortunate that everybody is losing temper in the House. I am sorry to say that.” “The entire nation is watching what is going on in this House,” he said in an apparent reference to the live telecast of the Budget speech. Mr Scindia contended that even the Union Cabinet was informed of the proposals only shortly before its actual presentation in the Lok Sabha. “It is a very serious matter,” he said. The speaker on three occasions asked the Finance Minister to start his Budget speech but was confronted with repeated interruptions. He lamented at one point, “It is very difficult for me to run the House.” When RJD member
Raghuvanshi Prasad Singh showed no signs of taking his
seat despite several requests from the Chair, he warned
the member, “I will take action against you.” |
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NEW DELHI, Feb 29 (UNI) — Finance Minister Yashwant Sinha in his Budget proposals said one of the major initiatives towards better tax compliance had been the introduction of the one-by-six scheme. This scheme, along with other measures, had contributed substantially in increasing the number of tax payers which had now crossed the 2 crore mark. The one-by-six scheme had been extended to an additional 79 cities in the country from the existing 54 cities. All cities having a population of 2 lakh and more on the basis of the 1991 census would stand covered. In keeping with the international practice, the Finance Minister proposed to promote a common business identification number to be used by different agencies and departments. In the Indian context, the permanent account number (PAN) of income-tax would be that instrument. To begin with, CBEC and DGFT will use PAN for their assessees, the improters and exporters. Special counters will be opened to issue PAN cards in all cities where one-by-six scheme will be in operation. The issue of PAN cards to the tax payers will be done within 30 days of their filing the application. This facility will become operational with effect from July 1, 2000. The Finance Minister said in order to expand and revamp the presently available facilities of tax collection, the tax payers would be able to pay their tax in any branch of the nationalised bank where they maintain an account. This facility would be available in all towns and cities covered under one-by-six scheme with effect from August 1, 2000. To streamline the system of refunds, the Finance Minister said the Tax Department would also offer the facility of issuing refunds directly on the bank accounts of assessees if the tax payers so desire. This facility will
continue along with the present practice of sending the
refund cheques to tax payers under advice the to their
banks. NEW DELHI, Feb 29 (PTI) — Non-plan expenditure was today hiked by Rs 26,044 crore to Rs 2,50,387 crore mainly on account of defence expenditure, interest payments and grants to states. Major subsidies on food and fertilisers constituted a significant portion of the non-plan expenditure, Finance Minister Yashwant Sinha said presenting the 2000-01 Budget in the Lok Sabha. Accordingly, from next year, the allocation for foodgrains to below poverty line (BPL) families is being doubled under the targeted public distribution scheme (TDPS) from 10 kg to 20 kg. He said the issue price of foodgrains for BPL families was being fixed at 50 per cent of economy cost in line with the decision taken by the government in December 1996. The Finance Minister said the Ministry of Chemicals and Fertilisers would bring out a road map for phasing out the retention price scheme of fertilisers in the medium term. Central plan assistance
to states and union territories in 2000-01 was placed at
Rs 36,824 crore as compared to Rs 35,735 crore in revised
estimates of last year. |
Downsizing of government on cards: PM NEW DELHI, Feb 29 (PTI, UNI) — Prime Minister Atal Behari Vajpayee today declared that steps were being considered to downsize the government and asserted that the highest-ever Rs 13,000 crore hike in the defence outlay was necessitated due to the deteriorating security environment after the Kargil conflict. “Yes, we are considering downsizing the government”, Mr Vajpayee told reporters here after Finance Minister Yashwant Sinha presented the Budget. On the defence expenditure which had been increased from Rs 45,694 crore last year to Rs 58,587 crore for the coming year, he said: “It is being hiked to meet the security needs of the country.” “This was required in the wake of deteriorating security environment. After the Kargil war, India has to gear itself up,” he said, adding that “I am fully confident that people will understand the country’s defence needs.” Asked why the salaried class had not been extended any tax benefits, the Prime Minister said it had not been taxed any further, and added that there was “no need” to provide it with any more benefits. Mr Vajpayee said the burden on the people “is not very heavy” and added that “we are confident that people will understand that the government had no other alternative but to reduce public expenditure”. Describing the Budget as “responsible, reform-oriented and forward looking”, he said the increase in fiscal deficit was causing concern to the government and “hard steps” had to be taken to reduce it. “The Budget is aimed at increasing the rate of growth of the gross domestic product by 6 to 7 per cent,” he said. The Prime Minister said the Budget would give a boost to overall development, especially in the village and social sectors, and would help provide employment opportunities to the needy. Some plans announced in the Budget would give a fillip to rural development, construction of roads and provide basic minimum facilities to the common people, he added. Meanwhile, Central government employees organisations condemned the downsizing of government machinery as proposed by the Finance Minister. Describing it as a “total reversal of the agreement made by the United Front government with employees organisations in 1997”, they condemned the 1 per cent reduction in the interest rate on GPF and said the employees would hold a national convention on March 8 to chalk out further strategies. However, HUDCO welcomed
the major initiatives announced in the Budget,
particularly the additional equity infusion of Rs 100
crore for giving thrust to rural housing. |
Post-lunch Budget raises yawns NEW DELHI, Feb 29 (PTI, UNI) — Presented post-lunch on a soporific afternoon, the millennium’s first Union Budget literally raised a hundred yawns among the benches as well as the various galleries. Members were seen fighting hard to smother their yawns which infected the entire political spectrum. Quite a few listened to the 100-minute speech by Finance Minister Yashwant Sinha with their eyes closed. However, the speech itself was preceded by high drama and sparks of anger over allegations of leak and notice of privilege given on this account by Opposition Congress member P.R. Das Munshi. As usual all galleries were full, except the diplomats’ gallery which was vacant, possibly because the diplomats could see them all on the web. Political activity in Bihar and Orissa had its impact on the House with Defence Minister George Fernandes and Agriculture Minister Nitish Kumar being conspicuous by their absence — presumably away in Patna. Mr Nitish Kumar is the leader of the NDA legislature party in Bihar, while Mr Fernandes is a major player in the politics of the state where a new government is due to be formed after the recent elections. Union Minister for Mines Navin Patnaik, the Chief Minister-elect of Orissa, was present in the House for a brief while but left during the 10-minute uproar over the alleged Budget leak. He did not return. Mr Sinha was very serious and businesslike throughout his 100-minute long Budget speech in the Lok Sabha today. This was a marked difference from the witty and couplets-laden Budget presentations by himself and his predecessors in earlier years. An opposition MP remarked outside the House that Mr Sinha’s speech was like a company chairman’s address to the board meeting. Only twice the Finance Minister recited couplets, customary in all such presentations. The first one was when he said hard decisions had to be taken to vitalise the economy. How long we can steer through the coastal waters, fearing turbulence, was the gist of the couplet. The second was when he quoted a poem to say that access to water to everybody was ordained by God himself. The Finance
Minister’s brisk delivery did not give much room for
the opposition members to react or protest. The only hue
and cry they could raise was when Mr Sinha came up with
the proposal to effect moderate increase in fertiliser
prices and cut in food subsidy. |
Summary of FM’s speech (part B) NEW DELHI, Feb 29 (UNI) — Following is the summary of Finance Minister Yashwant Sinha’s speech (part-B): The Budget for the next financial year offers incentives to promote industrial and commercial growth while sparing the common man of any heavy burden. Ad valorem rates of basic excise duty have been merged into a single one while peak rate of customs duty reduced. Basic rates of direct tax and personal tax rates remain unchanged. The three ad valorem rates of basic excise duty have been merged into a single rate of central value-added tax (cenvat) of 16 per cent. However, in case of certain items, three rates of special excise of 8 per cent, 16 per cent and 24 per cent will be levied. Excise duty is totally abolished on some items of medicare and others like medicinal grade oxygen and hydrogen peroxide, anesthetics, potassium iodate, medical and surgical gloves and items of common use like cutlery and knives, household glassware, electric bulbs, clocks and watches, toothpowder, sanitary towels, baby napkins, chicory and soaps for supply through public distribution system (PDS). Specified cold chain equipment have been totally exempted in larger public interest. The rate structure in case of kerosene, LPG, laundry soap, cotton yarn and diesel engines up to 10 HP have been so designed to prevent any increase in the price. Raw materials or intermediates such as plastic materials, films, trade rubber, cellular rubber, nylon filament yarn, textile materials of transmission belts, sacks and bags made of synthetic textiles etc., are to attract lesser excise duty. Excise duty on sterile contact lens solutions, shikakai powder and cars for the physically handicapped is also to be reduced. The items that are now charged to a total duty of 30 per cent has been brought to a total duty of 32 per cent, comprising 16 per cent Cenvat and 16 per cent special excise duty. However, soft drink concentrates supplied to bottlers will be charged 16 per cent Cenvat being Modvatable. The Modvat scheme will henceforth be known as Cenvat with the replacement of existing plethora of rules by a simple set of transparent regulations. The Modvat scheme is being fully extended to include cigaratte for the first time to provide a cheer to the industry. But the rate of excise duty on all categories of cigarettes will go up by 5 per cent. In the sector-specific proposals, it has been decided to restore ad valorem excise duty structure on steel produced by re-rollers and in induction furnaces. These will be subjected to Cenvat of 16 per cent. In case of textiles, it is proposed to raise the rates of compounded levy from the existing Rs 1.5 lakh to Rs 2 lakh per chamber per month. The units engaged in texturising of duty paid polyster yarn will henceforth pay specific rate of excise duty to reduce valuation disputes. It is also decided to include cosmetics and toilet preparations, air conditioning and refrigerating machinery and their parts, tread rubber and articles of plastic in the general scheme of exemptions for small-scale units. In case of customs duty, it is proposed to reduce the peak rate from 40 per cent to 35 per cent, thereby the number of customs duty rates will come down from 5 to 4. Hereafter, all importers will have to pay the special additional duty of customs. This will not apply to petroleum products. More items will now be placed in the free list of imports. Most of these are consumer goods including agricultural products. To accord adequate tariff protection, these are being placed at the peak rate. To give a boost to the IT sector, customs duty on a number of items have been reduced. These include computers, mother boards, floppy diskettes, specified capital goods, microprocessor, memory storage devices, CD-roms, integrated circuits and data graphic display tubes. To give a push to the telecom sector, it has been decided to reduce the basic customs duty on specified raw materials for the manufacture of optical fibres. The duty on cellular phones and battery packs has been drastically reduced and the concessional rate of 5 per cent basic duty available to specified telecom equipment is being extended to Internet services providers. To give a thrust to the enterainment industry, it has been proposed to bring down duty on cinematographic cameras and related equipment, and colour positive and negative films. In a bid to raise jewellery exports, the basic customs duty on platinum and non-industrial diamonds has been brought down subsantially. Some adjustments have been made in customs duty on fibres, yarn, textile fabrics and garments to give effect to India’s agreements with the European Union and the USA. As far as the petroleum sector is concerned, it has been decided to reduce the basic customs duty on crude oil and petroleum products except kerosene. The proposals on the excise duty are estimated to result in the revenue gain of Rs 3,252 crore in a year while on the customs side, the revenue loss will be Rs 1,428 crore. In the direct tax proposals, the Finance Minister has decided not to touch the personal taxation. However, he has proposed to increase moderately the surcharge on non-corporate tax payers having a total taxable income above Rs 1,50,000 per year. He decided to give some sops to senior citizens and women by enhancing the tax rebate level to Rs 15,000. The exemption from tax for the pension and family pension of gallantry award winners of defence forces is now being extended to paramilitary and other forces. In a bid to give a boost to knowlede based industries, floating of venture capital funds has been made easy. Tax benefits available for the infrastructure sector are now being extended to urban infrastructure like water treatment and waste management. The income tax rebate level on repayment of housing loan has been enhanced to Rs 20,000 per annum. Tax payers now, even if they own one house and still make an investment in a new house can claim exemption from capital gains tax. The maximum amount of repayment of loan to higher education has been raised to Rs 40,000 for allowable deduction. Keeping in view the transportation requirements for international trade, it has been decided to allow ship owners to claim deduction of their entire profits if these are used for the purchase of new ships. A deduction of 100 per cent will also be allowed in case of donations made by corporates for the development of sports infrastructure. The minimum alternate tax (MAT) is now proposed to be modified and levied at the revised rate of 7.5 per cent of the book profits instead of 10.5 per cent, to provide better efficacy to provisions currently available and bring all zero-tax companies within the tax net. The tax holiday available for new units set up in industrially backward areas has been extended for another two years along with tax benefits. To strengthen capital markets, it is also proposed to provide 100 per cent exemption to the income of investors protection funds of stock exchanges. The rate of tax on dividends distributed by the domestic companies has been enhanced to 20 per cent while the dividend income in the hands of shareholders will continue to renaim tax free. The rate of tax on income distributed by debt oriented mutual funds and UTI has been hiked to 20 per cent. However, income distributed under the US -64 and other open-ended equity oriented, schemes of UTI and mutual funds will continue to remain exempt. The interest tax of 2 per cent on bank and financial institutions has been abolished to benefit the financial sector. The one-by -six tax identifier scheme is now proposed to be extended to 79 more cities of the country, taking the total to 133. Suitable changes will be made in the law to ensure that income from farmhouse other than genuine agricultural operations is brought under the tax net. It has been decided to phase out in five years tax concessions available to export earnings of various kinds, from the next financial year. The proposals made in
the Budget concerning direct taxes are estimated to bring
in a revenue of Rs 72,105 crore including additional
mobilisation of Rs 5080 crore. The total central tax
revenue receipts will be Rs 1,46,209 crore with a deficit
of Rs 1,11,275 crore. |
VRS for government staff proposed NEW DELHI, Feb 29 (PTI) — Finance Minister Yashwant Sinha said today 69 schemes of eight departments would be discontinued or merged as part of zero-based budgeting and proposed a voluntary retirement scheme for government employees. Presenting the Budgetary proposals, he said the zero-based budgeting scrutiny, which was started in last year’s Budget, would be completed in a time-bound manner. Manpower requirements of government departments will be reassessed by reviewing the norms for creation of posts, he said, adding that fresh recruitments in government departments and institutions would be limited to “minimum essential needs”. The scheme for redeploying surplus staff would be made more effective and provide facilities for retraining, he said, adding that voluntary retirement schemes would also be introduced for “staff in the surplus pool”. Sinha said subsidies
would be reviewed with a view to bringing in cost-based
user charges wherever feasible. NEW DELHI, Feb 29 (PTI) — The interest rate of General Provident Fund is being reduced by 1 per cent to 11 per cent from April 1 this year. Presenting the Union Budget for 2000-2001 in the Lok Sabha, Finance Minister Yashwant Sinha said this was being done to align the GPF with the overall interest rate structure. He said in order to reduce expenditure on account of debt-service payments, a portion of disinvestment proceeds would be earmarked for retiring government debt. An initial provision of Rs 1,000 crore has been made in the Budget for this purpose. He said further collective measures would be taken next year for promoting fiscal reforms in the states as the financial position of state governments had deteriorated sharply in the last few years. A committee had been set
up to examine the issue of strong institutional mechanism
embodied in a fiscal responsibility act, he said. |
Group insurance scheme launched NEW DELHI, Feb 29 (PTI) — A new scheme of group insurance — Janashree Bima Yojana — is being introduced to extend social security cover to the poorer sections of society. Presenting the Union
Budget for 2000-2001 in the Lok Sabha today, Finance
Minister Yashwant Sinha said under the new scheme
beneficiaries would have insurance cover of Rs 20,000 in
case of natural death, Rs 50,000 in case of accidental
death or total permanent disability and Rs 25,000 for
partial permanent disability due to accident. 561 crore more for Home Ministry NEW DELHI, Feb 29 (UNI) — The Union Budget for 2000-2001 has enhanced the allocation for the Home Ministry to Rs 8,304 crore. This is Rs 561 crore more than the Rs 7,473 crore allocated to the ministry in the last fiscal. The additional funds
have been provided to meet additional expenditure on
modernisation of police force, beefing up security
measures on Pakistan and Bangladesh borders, besides the
development of north-eastern region. A sum of Rs 200
crore has been set aside for the modernisation of police
force. |
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NEW DELHI, Feb 29 (PTI) — The following are the highlights of Part-A of the Budget.
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