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Friday,
March 1, 2002,
Chandigarh, India  
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Border tension pushes MEA allocation Summary of FM’s speech (Part-B) Defence outlay reflects increasing concern
Non-Plan expenditure 2,96,809 cr |
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5 pc security surcharge proposed Agitated MPs delay proceedings Meagre hike in MHA outlay States to get 7 pc more funds 12,200 govt posts to be abolished Exemption on VRS scheme extended Householder feels
the pinch Jai Prakash Rozgar Yojana launched Rs 10,000 penalty for quoting false PAN Property sale made easier Customs duty goes on cancer drugs How rupee comes, goes Health clubs, beauty
parlours in tax net IT rebate under Sec 88 halved IT liability up Cheaper computers, mobiles ushered in Cut in interest rates effective from today 30 pc more for education, literacy Postal articles’ tariff hiked Toothbrush, TVs, candles costlier
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Border tension pushes MEA allocation New Delhi, February 28 The MEA’s budgetary allocation for 2002-03 has been put at Rs 3238.34 crore as against the previous year’s allocation of Rs 2883.39 crore. An interesting feature is that allocation for “special diplomatic expenditure” has been increased by nearly Rs 100 crore from the last year’s revised estimate of Rs 690 crore to Rs 785 crore in 2002-03. “Special diplomatic expenditure” provides for discretionary expenditure. Diplomatic activities in the country had gone into the fifth gear in the wake of September 11 and December 13 events and a galaxy of foreign dignitaries visited India. This is evident from the fact that Rs 28 crore was spent during 2001-02 under the sub-head “entertainment charges”, exceeding the budgetary allocation by Rs 5 crore. Today’s Budget pegs allocation for “entertainment charges” at Rs 24.50 crore. The explanation offered in the budget documents for this hike is that it is “mainly on account of increase in costs of services related to incoming VVIP visits, increase in airlift charges of the Indian Air Force and upgradation and repair work of Hyderabad House.” The bulk of the MEA’s budget goes under the sub-head of “embassies and missions” wherein Rs 787.82 crore has been allocated in today’s Budget, up from last year’s allocation of Rs 756.09 crore. this provides for expenditure on India’s representation of 157 Mission/Posts abroad. Budgetary allocation for “technical and economic cooperation with other countries and advances to foreign governments” for some neighbouring countries is as follows: Bangladesh — Rs 90 crore (last year Rs 114.45 crore); Bhutan — Rs 831.45 crore (last year Rs 630 crore) and Nepal — Rs 107.26 crore (last year Rs 109.01 crore). |
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Summary of FM’s speech (Part-B)
New Delhi, February 28 The Budget 2002-03 proposes a revenue gain of about Rs 6,700 crore in a year on account of a hike in the Excise duty and a loss of Rs 2,200 crore on account of various relieves in the customs duty. The proposals envisage buoyancy in indirect tax revenue estimating a surge in revenue collection of the order of Rs 1,43702 crore. The proposals in the Budget on the direct taxes will yield a revenue gain of Rs 6,000 crore including the surcharge of Rs 2,750 crore, with an estimated revenue from direct taxes at Rs 91,585 crore. The estimated total tax revenue receipts for the Centre have been pegged at Rs 1,72,965 crore and the fiscal deficit at Rs 1,35,524 crore or 5.3 per cent of the GPD. The Budget proposals, which are developmental, seek to consolidate, widen and deepen the reform process and promote bonds of cooperation between the Centre and the states for a better tomorrow and prosperous India. Excise duty The Central Value Added Tax (CENVAT) in the excise duty structure which had introduced the rate of 16 per cent last year has been refined further. The 16 per cent special excise duty on a number of items has been abolished. Hereafter, the special excise duty will be confined to 8 items of polyester filament yarn, motor cars, multi-utility vehicles, tyres for replacement, aerated soft drinks and soft drink concentrates, air conditioners, pan masala and chewing tobacco and miscellaneous tobacco preparations. The concessional rate of 8 per cent excise duty applicable to LPG, kerosene, auto CNG and diesel engines upto 10 hp has been dispensed with and brought under the 16 per cent CENVAT. A moderate rate of 4 per cent excise duty imposed last year on a few items has been increased to 8 per cent this year. Besides excise duty at 4 per cent on a few more items which have remained exempted so far has been proposed. A 16 per cent cenvat has been extended to cover cigars, cheroots, cigarillos of tobacco or tobacco substitutes which have been exempted so far. Changes in the excise duty structure of petroleum products have also been made following abolition of the Administered Price Mechanism. Accordingly, the rate of cess applicable to indigenous crude oil has been increased from Rs 900 per metric tonne to Rs 1,800 per metric tonne from March 1, 2002. At the same time, ad valorem rate of excise duty applicable to motor spirit has been reduced from 90 per cent to 32 per cent and a surcharge of Rs 6 per litre imposed. However, surcharge on ethanol doped motor spirit will be Rs 5 and 25 paise per litre Textile industry gets a special package for its revival and growth. The excise duty rate of yarns has been extended to hank yarn at 8 per cent to ensure that the benefit accrues only to the handloom weavers. At the same time, an appropriate subsidy on the price of hank yarns purchased by the handloom sector will be continued to put an end to its misuse. Weavers of grey fabrics have been enabled to pay excise duty on an optional basis to avail of the CENVAT credit scheme. A similar scheme has been extended to the knitting sector. However, in the case of fabrics made-ups and garments, the CENVAT rate of 16 per cent has been reduced to 12 per cent which shall continue up to February 28, 2005. Industrial fabrics would continue at 16 per cent CENVAT rate. Exemption from excise duty on hand processing to textile fabrics used so far on 12 specified processes in the case of cotton fabrics or 7 specified processes in the case of man made fabrics will henceforth be confined to only 3 processes of scouting, hydro-extraction and calendering. The compounded levy scheme for independent power processors has been abolished. Exemption has been granted to handloom garments also from the excise duty subject to certification by the Handloom Export Promotion Council. Excise duty on automatic shuttleless looms, specified processing machinery and specified silk reeling, weaving and twisting machinery has been exempted to enable the textile industry to modernize itself. Petroleum products from the petroleum refineries located in the North-East region will pay excise duty at half of the normal rate of the excise duty otherwise applicable to the petroleum products. Inland air Travel Tax exempted for air travel within the North-East states has been extended to air travel to and from the North-East states. Tea industry has been granted a reduction in the excise duty from Rs 2 per kg to Re 1 per kg. Specified anti-AIDS drugs have been exempted from excise duty from March 1, 2002. To preserve fruits and vegetables, the exemption on specified cold chain equipment has been extended to three more equipment. Excise duty exemption to granite has been withdrawn.
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Defence outlay reflects increasing concern New Delhi, February 28 Although some experts would still say that the budgetary allocation for the Defence should have been even higher, but the allocation this year is the highest of the GDP in recent memory. Although, it cannot be compared to the almost 30 per cent hike after the Kargil conflict, but there is no denying that the government’s attention is on improving the defence needs of the country. In the past, it was only on four occasions that the
budgetary allocation had seen big jumps. Before the Kargil conflict, the budget for the year 1971-72, 1974-75 and then in the year 1986-87 had seen big hikes. The year 1971-72 being actually the eye opener for the government to also concentrate on the defence expenditure. Incidentally, for the first 15 years after India’s Independence, defence allocations received low priority and hovered around 1.80 per cent of the Gross Domestic Product (GDP). India’s debacle in the Sino-Indian war in 1962 was also widely attributed to the prolonged neglect of the Indian defence forces. Over the past few years also there had not been much change in the successive government’s attitude towards the defence needs. Despite yearly increases in the allocations, the rate of increase in defence outlays at current prices had shown a significant decline during the past decade. Defence spending, which was increasing at an annual average rate of growth (AARG) of 14.55 per cent during the 25 years following the 1962 Sino-Indian war, started growing at an annual average rate of 16.52 per cent during the past 10 years of this period (1978-1987). There was, however, a substantial drop in the annual average growth rate to 11.50 per cent in the period 1988-97, over the preceding decade (1978-87). This constituted a decline of 30 per cent. During this period, the rupee depreciated by over 70 per cent as compared to the US dollar. Experts point out that a major victim of the decline in defence expenditure had been the defence modernisation and replacement of obsolete equipment and weapons systems. This process was particularly vulnerable to fluctuations in the currency exchange ratios.
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Non-Plan expenditure 2,96,809 cr New Delhi, February 28 While the total revenue expenditure for 2002-03 is estimated at Rs 2,70,169 crore as against the revised estimates of Rs 2,42,471 crore, the capital expenditure is pegged at Rs 26,640 crore as against Rs 22,811 crore in 2001-02. Out of the total incremental expenditure of Rs 31,527 crore, the maximum increase of Rs 10,133 crore is to meet the interest obligation for fiscal deficit during 2001-02. Increased provision of Rs 8000 crore has also to meet enhanced expenditure on pay and allowances and modernisation of the defence forces. The Budget has also made enhanced provision for petroleum subsidy of Rs 6,695 crore and food subsidy of Rs 3,588 crore out of the total expenditure of Rs 39,801 crore on subsidies. Higher provision of Rs 8,352 crore, an increase of Rs 1,047 crore, has also been made for police for special operations required to maintain internal security as against revised estimate of Rs 7,305 crore in 2001-02. The increase is also on the basis of recommendations of the 11th Finance Commission regarding non-plan grants to state governments pegged at Rs 18,524 crore as against Rs 16,306 crore in 2001-02. Enhancement has also been made on account of pensions, which is pegged at Rs 15,035 crore against revised estimates of Rs 14,628 crore in 2001-02, an increase of Rs 407 crore. The Budget has also provided for an increased expenditure of Rs 2,728 crore for education as against Rs 2,381 crore in 2001-02 as also miscellaneous expenses pegged at Rs 30,857 crore as against revised estimates of Rs 30,849 crore in 2001-02.
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5 pc security surcharge proposed
New Delhi, February 28 The government at the same time withdrew the 2 per cent surcharge imposed after the Gujarat earthquake. Mr Sinha said national security was an overriding concern and its cost has to be shared by all of us and keeping this in mind, a surcharge of five per cent across-the-board on all categories of tax payers, except individuals and Hindu Undivided Families (HUFs) having total income up to Rs 60,000, is being imposed. In his Budget recommendations for the fiscal 2002-2003, the Finance Minister announced that the present income tax slabs of 10 per cent on income between Rs 50,000 and Rs 60,000, 20 per cent on income between Rs 60,000 and Rs 150,000 and 30 per cent on income above Rs 150,000 would remain unchanged. Mr Sinha also announced that income tax rebate on investments under Section 88 for those earning more than Rs 150,000 would be 10 per cent instead of the existing 20 per cent. The Finance Minister felt that the personal income tax rates of 10 per cent, 20 per cent and 30 per cent and corporation tax of 35 per cent, which have been continuing for several years, are reasonable and “presently, there was no need to change them’’.
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Agitated MPs delay proceedings New Delhi, February 28 Even before the Lok Sabha formally assembled and Speaker
G.M.C. Balayogi announced the commencement of the day’s proceedings, BJP MP from Faizabad Vinay Katiyar was heard saying that “he would not allow the Budget to be presented as this government must go”. The moment Mr Balayogi asked Finance Minister Yashwant Sinha to present the Budget 2002-2003, Mr Katiya in company of another BJP MP from Uttar Pradesh Ram Nagina Mishra, stormed the well, waving Hindi newspapers carrying reports of the attack on Sabarmati Express in which 58 persons were reportedly killed and 43 injured. At the same time, Shiv Sena MPs, led by Mr Anant Geethe raised
slogans like “Ram Sevak ke hatyaron ko, fansi do, fansi do (hang murderers of Ram
sevaks)” and “Jo Hindu hit ki bat karega, wohi desh par raj karega (those who take up interests of Hindus, only they will rule the country)”. Repeated pleas of the Speaker, Human Resource Development Minister Murli Manohar Joshi, Home Minister L.K. Advani, BJP spokesman Vijay Kumar Malhotra and others went unheeded. Even as Prime Minister Atal Behari Vajpayee stood up to intervene, he was persuaded by the Home Minister to remain sitting. Eventually, efforts of Mr Advani, BJP Parliamentary Party spokesman Vijay Kumar Malhotra, Parliamentary Affairs Minister Pramod Mahajan and ministers Ananth Kumar and Vijay Goel succeeded in persuading the two party MPs to resume their seats. During his one hour and 45 minutes speech, Mr Sinha received a pat from the treasury benches and jeers from the Opposition desks with the former congratulating him with thumping of desks when he announced schemes for farmers and the latter criticising the Finance Minister for hiking the prices of fertilisers for eliminating subsidies on these in the long run shouting “shame, shame”. The RJD MP, Mr Raghuvansh Prasad Singh, Congress Chief Whip P.R. Dasmunshi and Congress MP from Andhra Pradesh Renuka Choudhary, RPI Ramdas Athawale, Samajwadi Party member Akhilesh Singh and Shiv Sena MP Geethe tried to interrupt Mr Sinha during his speech on different occasions. The Finance Minister took the House by surprise when he uttered “shame, shame” after he announced that the interest rate on the loans portion of central assistance to state Plans was being reduced by 50 basis points. The Lok Sabha burst into laughter thus breaking the monotony of the long speech for a while. BJP MPs with close ties with the Vishwa Hindu
Parishad, including Mr Katiyar and Mr Mishra, went out of the House several times. |
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Meagre hike in MHA outlay New Delhi, February 28 The Union Budget 2002-03 earmarks a total of Rs 10,743.20 crore as compared to the revised Budget outlay of Rs 9,560.92 crore during the last financial year 2000-2001. While there has been a nearly 100 per cent increase in the allocation for Indo-Pak Border Works from Rs 91.95 crore to Rs 186.99 crore, outlay for Indo-Bangladesh Border Works has been brought down from Rs 100 crore to Rs 75 crore. The Non-Plan outlay for the modernisation of the police force has been kept at the same level of Rs 1000 crore in the 2002-03 Budget as that of the last Budget. Under this modernisation scheme, assistance is provided to the state governments in the form of 50 per cent grants-in-aid and 50 per cent loan to be utilised for expenditure of non-recurring nature on the purchase of vehicles, wireless equipment, computers and other sophisticated equipment. Among the central police organisations, the maximum increase in the allocation has gone to the Border Security Force (BSF), followed by Special Security Bureau (SSB), CRPF, Assam Rifles, Central Industrial Security Force (CISF) and National Security Guard. The BSF’s allocation has been increased from Rs 2289.55 crore to Rs 2,607.24 crore, SSB from nil to Rs 341.79 crore, CRPF from Rs 1791 crore to Rs 1998.79 crore, Assam Rifles from Rs 669.80 crore to Rs 719.17 crore, CISF from Rs 1,791 crore to Rs 1998.79 and NSG from Rs 84.40 crore to Rs 97.69 crore. In the Budget 2002-03 an amount of Rs 208.17 crore has been allocated for the construction of residential accommodation for police personnel in the Central Police Organisation, which is Rs 23.90 crore more than the previous financial year. However, allocation for the construction of buildings for Central Police Organisation has been reduced by Rs 3.24 crores in this Budget from Rs 280.22 crore to Rs 276.98 crore. |
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States to get 7 pc more funds
New Delhi, February 28 Presenting the details of allocation to states in the Budget Finance Minister Yashwant Sinha proposed a higher share in tax revenue and duties to states at Rs 61,235 crore, up by around 16 per cent from this year’s revised estimates of Rs 52,845 crore. The share of taxes was actually lower from the budgeted Rs 61,618 crore for 2001-02. The grants to states had been proposed to increase by about 15 per cent to Rs 19,190 crore for 2002-03 as compared to estimates of Rs 16,694 crore in the current fiscal, which was lower than the budgeted figure of Rs 18,538 crore in 2001-02. Loans to states are slated to increase only marginally to Rs 590 crore as compared to Rs 582 crore in 2001-02 which went down from the budgeted estimates of Rs 589 crore for this fiscal. The Budget has estimated a near 22 per cent increase in central assistance to states at Rs 44,121 crore as against the revised estimate of Rs 36,077 crore for 2001-02, which was marginally lower than the budgeted figure of Rs 37,640 crore for the year. Grants were estimated at Rs 19,606 crore and loans at Rs 24,515 crore as compared to revised estimates of Rs 16,675 crore and Rs 19,402 crore respectively for 2001-02. The Budget estimates for 2001-02 were Rs 18,847 crore and Rs 18,793 crore towards grants and loans.
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12,200 govt posts to be abolished New Delhi, February 28 A surplus manpower of as much as 42,200 has been identified so far, Mr Sinha said in his Budget speech. It has already been announced that the government staff strength would be reduced by 10 per cent in the next five years, by filling up only 1 per cent of posts.
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Exemption on VRS scheme extended New Delhi, February 28 Under the existing provision in clause 10C of section 10 of the Act, any amount received by an employee of companies and authorities not exceeding Rs 5 lakh at the time of voluntary retirement, or termination of his service in accordance with any scheme or schemes of voluntary retirement or a scheme of voluntary separation, will not be included in the total income of such employee. Finance Minister Yashwant Sinha said in his budgetary proposals that the amendment would be applicable in institutions to be specified by the Central Government by notification in the Official Gazette for the purpose of the clause.
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Householder feels
the pinch New Delhi, February 28 Home-makers are disappointed with the hike in price of the LPG by
about Rs 40 per cylinder and of kerosene through the PDS by Rs 1.50
per litre from Friday. Those in the food business are also upset with
the aforesaid hike and say that they will be forced to revise rates on
their menu cards.
Migrant women labourers, feel that their opinion does not count,
anyway. Shanti, a teenaged fruit vendor and a Class X student, says
they have no choice but to accept the government’s announcements.
She said that our “objections” to the announcements made in the
Budget are not going to change things. She, however, could not help
remarking that the hike in price of the LPG by Rs 40 per cylinder may
not mean anything to the well-to-do families but means a lot to the
poor.
Ramesh Dutt, owner of an eatery on Vishnu Digambar Marg here, says
that their LPG consumption is rather high. “We exhaust one cylinder,
in two days as we have to cater to about 100 persons everyday. We will
be forced to revise our rates.”
On the other end of the spectrum of the food business are the
deluxe five-star hotels. Abha Negi, Public Relations Manager of Park
Royal International, termed the Budget as “pragmatic, positive and
pro-reforms.” She said the government could have done without
levying five per cent service tax on health clubs and gyms. “This is
an additional burden. Besides, the increase in price of the LPG is
bound to have a spillover effect.”
Samir Gupta a 23-year-old final year student of Physiotherapy for
an undergraduate degree course at the Institute of Physically
Handicapped, is thrilled with the news that he will have to pay less
for petrol in Delhi. A tax consultant with Price Water House Coopers,
a multinational, complained that the Budget did not take into account
the economic growth the country needs. “It is hard-hitting for the
salaried class if one examines the taxation of individuals. Earlier,
dividends were not taxable in the hands of the individual. The rebate
under Section 88 of the IT Act has been withdrawn for persons earning
over Rs 5 lakh per annum.”
The revision of postal tariffs as Rs 5 for a 20 gm letter envelope
as against the existing Rs 4 and a 50 paise increase in the rate of
inland letter card from Rs 2 is bound to affect the migrant labour
frequently write home. Urban Indians, used to the revolution in
information technology, are content with their e-mail accounts which
ensure delivery of messages instantly. |
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Jai Prakash Rozgar Yojana launched
New Delhi, February 28 The programme is aimed at providing employment guarantee to the unemployed in the most distressed districts of the country. Mr Sinha, in his budget presentation for 2002-03, also said the public sector insurance companies were designing an insurance scheme called ‘Janraksha’ for ensuring good health care to the rural population. With a payment of Re 1 per day as insurance premium, a person will be entitled to hospitalisation treatment of up to Rs 30,000 per year at the selected and designated hospitals, Mr Sinha said. Out patient treatment up to Rs 2,000 per year will also be covered under this scheme, Mr Sinha said.
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Rs 10,000 penalty for quoting false PAN
New Delhi, February 28 In his Budget proposals for 2002-2003, Mr Sinha announced the launch of a scheme called ‘Sampark’ by the Income Tax Department to enable taxpayers to obtain information and forms through the Internet. User-friendly software will be made available by the department to enable taxpayers to prepare their returns of income, he said, adding that effective use of information technology will depend critically on the strict compliance of requirements relating to PAN. The Finance Minister proposed to extend the list of high-value transactions, where the use of PAN would be mandatory. Transactions like expenditure exceeding Rs 25,000 incurred in cash on foreign travel, purchase of bank drafts exceeding Rs 50,000 in cash and making cash deposits exceeding Rs 50,000 in any bank account were added to the list which currently includes purchase or sale of motor cars and expenditure incurred in hotels and restaurants. He further proposed to introduce in rules to provide that any transaction in cash, under the above list, would have to be reported, within a specified period, to the Income Tax Department. UNI
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Property sale made easier
New Delhi, February 28 Under the existing provisions, any person intending to transfer immovable property in specified areas at values exceeding specified amounts, was required to file a statement in Form 37-1 before the appropriate authority within the prescribed time before the intended date of transfer. The transfer could be registered only if the authority did not pass an order of pre-emptive purchase of the property, and issued a ‘no-objection certificate.’ “Since these provisions were causing procedural delays in registration of transfers, and with a view to remove a source of hardship for the taxpayers, it is proposed to make the provisions of Chapter XX-C inapplicable in respect of any transfer of immovable property effected on or after July 1, 2002,” the Finance Bill tabled in Parliament today said noting that the amendment would take effect from July this year.
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Customs duty goes on cancer drugs
New Delhi, February 28 Presenting the Budget, the Finance Minister said vaccine for immunisation against Japanese encephalitis shall also be exempted from Customs duty. All anti-AIDS drugs would be exempted from excise duty from tomorrow, he said. Pointing out that certain drugs that are presently exempted from Customs duty are now made indigenously, Mr Sinha also imposed a basic customs duty of 5 per cent on these drugs in order to provide reasonable incentives to the domestic manufacturers of these medicines. Stating that India has a large number of diabetic patients and that they have to undergo frequent blood sugar tests, Mr Sinha sought to reduce the customs duty on Glucometers and test strips from 25 per cent to 10 per cent.
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How rupee comes, goes
New Delhi, February 28 Borrowings and other liabilities constitute 29 paise in every rupee generated by the government while it pays one-fourth of the rupee in interest liabilities, the Budget for 2002-03, presented by Finance Minister Yashwant Sinha in Parliament today, showed. Excise duties contribute 19 paise in every rupee earned by the government. Corporation and customs duties chip in 10 paise each, income-tax 9 paise and other non-tax revenues 2 paise. Non-tax revenue contribute 15 per cent in the rupee while non-debt capital receipts contribute 6 per cent. Allocation for the Defence sector and the Central Plan takes 14 paise each of every rupee earned by the government. Subsidies eat 8 paise. States’s share of taxes and duties is 13 per cent of the total revenues while other non-plan expenditure accounts for 12 per cent. Central assistance to states and union territories is 10 paise of every rupee earned. PTI
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Health clubs, beauty parlours in tax net
New Delhi, February 28 Hotels have been exempted from the service tax for one more year under the Budget proposals announced in the Lok Sabha by Finance Minister Yashwant Sinha. Stating that the service tax confined to a limited number of services has gained ground, Finance Minister Yashwant Sinha said the service tax would be extended to the services provided by life insurance, including insurance auxiliary services. These relate to life insurance, inland cargo handling, storage and warehousing services (except for agriculture produce and cold storages), event management, rail travel agents, health clubs and fitness centres, beauty parlours, fashion designers, cable operators and dry cleaning services. Pointing out that service tax is applicable to specified services provided by banks and non-banking financial companies, he further extended the service tax to corporate bodies that provide similar services. The tax on these services will come into force from a notified date. Observing that the tourism industry has been adversely affected by recent events, he proposed that the services provided by hotels be exempted from the service tax net for one more year up to March 31, 2003.
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IT rebate under Sec 88 halved
New Delhi, February 28 Finance Minister Yashwant Sinha, in his budgetary proposals for fiscal 2002-2003, said today that Section 88 investments by people with incomes between Rs 150,000 and Rs 5 lakh would in future get a rebate of only 10 per cent against the existing 20 per cent. Investments by people earning more than Rs 5 lakh will not be entitled for any income tax rebate. A tax rebate of 20 per cent on the amount invested in certain short-term deposits specified in section 88 of the Act was allowed to all individuals and Hindu undivided families (HUFs) as an incentive for retaining a part of their earnings in the form of savings. The special rebate of 30 per cent for persons having taxable salary income up to Rs 1 lakh will, however, continue, he said.
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IT liability up New Delhi, February 28 Against a tax liability of Rs 12,240 earlier, they will have to now pay Rs 21,000 against an income of Rs 2 lakh following the reduction of the rebate from 20 per cent to 10 per cent and imposition of 5 per cent surcharge in the Budget 2002-03.
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Cheaper computers, mobiles ushered in
New Delhi, February 28 The prices of computers will also go down as custom duty in the IT hardware sector will be reduced between 10 per cent and 5 per cent as per the WTO binding. “The use of cellular phones is increasing by leaps and bounds but import through unauthorised channels is a matter of concern. I, therefore, propose to exempt phones and pagers from CVD,” Finance Minister Yashwant Sinha said while presenting Union Budget 2002-03 in the Lok Sabha. The basic customs duty is, however, being increased to 10 per cent from 5 per cent, Mr Sinha said. In addition, the benefit of carry forward and set-off of past losses in case of mergers of companies owning industrial undertakings has been extended to firms providing telecom services and eligible for deduction under Section 80-1A. Mr Sinha said there had been a persistent demand that the benefit of carry forward and set-off of past losses in cases of mergers of companies owning industrial undertakings, be extended to more sectors, adding, the move would encourage growth in the telecom sector which was undergoing a phase of rapid consolidation and expansion.
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Cut in interest rates effective from today New Delhi, February 28 Presenting the Budget, Finance Minister Yashwant Sinha told the Lok Sabha that the benefit of reduction in interest rates on small savings deposits will be fully passed on to the states. He said the administered interest rates will now be benchmarked to the average annual yields of government securities of equivalent maturities in the secondary market. The government relief bonds will also have a reduction of 50 basis points in interest rate. A ceiling of Rs 2 lakh per year has been put on investments in these bonds. The entire net proceeds of small savings are to be transferred to state governments from April 1, up from the current transfer of 80 per cent. It has also been proposed that the interest rate on the loan portion of central assistance to state plans will be reduced by 50 basis points.
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30 pc more for education, literacy New Delhi, February 28 The Department of Secondary and Higher Education also got enhanced allocation at Rs 2,125 crore, getting Rs 305 crore more. The Women and Child Development Department has also got enhanced allocation of Rs 2,200 crore with the increase being over 33 per cent. Overall the Ministry of Human Resource Development got a hike of Rs 2,005 crore with the outlay for 2002-03 fixed at Rs 9,225 crore.
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Postal
articles’ tariff hiked New Delhi, February 28 Cost of the printed postcard has been doubled to Rs 6 while the price of the inland letter card has been increased to Rs 2.50 as against Rs 2 at present. The cost of envelopes has also been proposed to be increased to Rs 5 as against Rs 4 at present while the cost of the competition postcards has been doubled to Rs 10.
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Toothbrush, TVs, candles costlier New Delhi, February 28 Imitation jewellery, powered goggles, table and kitchenware of glass, watches and clocks up to Rs 500 per piece will also be affected by this increase.
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