News Chidambaram presents Budget 2013, makes strong pitch for inclusive development

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With the UPA gearing up for elections next year, finance minister P Chidambaram tried to provide some sops to every sector in his Budget presented to Parliament on Thursday.

The focus was on the social sector and rural India, with finance minister announcing several schemes for inclusive growth.

Health for all and education for all are govt's priorities, Chidamabram said.

Chidambaram announced Rs 41,000 crore for Scheduled Caste plan, Rs 97,000 crore for women's development, Rs 110 crore for department of disabilities and Rs 37,330 crore for the health ministry.

Chidambaram announced Rs 1000cr additionally for the UPA's flagship Food Security Bill.

Food inflation is worrying and we must take steps to boost the supply of food items, Chidambaram said.

Reaching out to the investors, Chidambram sought to dispel tax-burden and regulatory fears

"Doing business in India must be seen as easy and friendly," Chidambaram said.

Foreign investment is imperative, Chidamabram said.

The finance minister expressed concern over high current account deficit.

He announced the setting up of a regulatory authority for road sector.

Chidambaram also announced the setting up of two new major ports — one in West Bengal and the other in Andhra Pradesh

Earlier, Chidambaram started his speech with a reference to the condition of global economy.

We are not unaffected with what happens in other parts of the world and our economy has also slowed down after 2010, Chidambaram said.

The finance minister said the challenge was to get back the growth target and there was no reason for any gloom.

Chidambaram said only Indonesia and China were growing at a faster rate than India.

Getting back to 8% growth rate is a challenge for the country, Chidamabram said.

Chidambaram expressed confidence that the economy will once again return to high growth phase.

Read More : Chidambaram presents Budget 2013, makes strong pitch for inclusive development - The Times of India

 

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5 measures that will impact you

Attempting to woo the common-man, Finance Minister P Chidambaram on Thursday announced a slew of measures that will cheer most in the country. Even though Chidambaram did not tinker with the income tax slabs, a move that will be met with disappointment, many initiatives were announced that will encourage savings.

ET takes a look at some measures that will get Chidambaram thumbs up from the common-man:

1) Additional exemption for home loans:

In a move that will bring cheer to many prospective home-owners, Chidambaram announced incentives for home loan borrowers. Chidambaram 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 interest of up to Rs 1 lakh.

"A person taking a loan for his first home from a bank or a housing finance corporation up to Rs 25 lakh during the period 01-04-2013 to 31-03-2014 will be entitled to additional deduction of interest of up to Rs 1 lakh," he said.

2) Tax credit:

There will be no change in tax rates or slabs for FY14, Finance Minister P Chidambaram said in his Budget speech. However, he announced a tax credit of Rs 2000 for Rs 2-5 lakh tax payers bracket.

3) RGESS more attractive:

"The Rajiv Gandhi equity saving scheme will be liberalised to enable the first time investor to invest in mutual funds as well as listed shares and she can do so not in one year alone but in three successive years," he said.

"The limit for investors wanting to invest in RGESS has been raised from Rs 10 lakh to Rs 12 lakh," he added.

4) Inflation-indexed bonds

On the issue of inflation-indexed funds, Chidambaram said, "In consultation with RBI, I propose to introduce instruments that will protect savings from inflation especially the savings of the poor and middle classes, these could be inflation-indexed bonds or inflation-indexed national security certificates," he said.

The structure and tenure of the instruments will be announced in due course, he added.

5) More houses in urban areas:

"In the last budget we provided Rs 4000 crore to the fund in consultations with RBI proposed to provide Rs 6000 crore to the rural housing fund. Similarly it is proposed to start a fund for urban housing to mitigate the huge shortage of houses in urban areas," Chidambaram said.

"I propose to ask National Housing Bank to set up the Urban Housing Fund and in consultation with RBI, I propose to provide Rs 2000 crore to the fund in 2013-2014," he said.

Read More : Budget 2013: 5 measures that will impact you - The Economic Times

 

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Highlights of Union Budget 2013-14

India must make tough spending choices, finance minister P Chidambaram said on Thursday, even as he unveiled a bigger-than-expected outlay for the coming fiscal year in one of the most highly anticipated Indian budgets of recent years.

Following are highlights of the Budget:

FISCAL DEFICIT

* Fiscal deficit seen at 5.2 point of GDP in 2012/13

* Fiscal deficit seen at 4.8 point of GDP in 2013/14

* Faced with huge fiscal deficit, India had no choice but to rationalise expenditure

BORROWING

* Gross market borrowing seen at 6.29 trillion rupees in 2013/14

* Net market borrowing seen at 4.84 trillion rupees in 2013/14

* Short-term borrowing seen at 198.44 billion rupees in 2013/14

* To buy back 500 billion rupees worth of bonds in 2013/14

SPENDING

* 2013/14 major subsidies bill estimated at 2.48 trillion rupees from 1.82 trillion rupees

* Petroleum subsidy seen at 650 billion rupees in 2013/14

* Revised petroleum subsidy for 2012/13 at 968.8 billion rupees

* Estimated 900 billion rupees spending on food subsidies in 2013/14

* Revised food subsidies at 850 billion rupees in 2012/13

* Revised 2012/13 fertiliser subsidy at 659.7 billion rupees

GROWTH

* India faces challenge of getting back to its potential growth rate of 8 point

* India must unhesitatingly embrace growth as highest goal

SPENDING

* Total budget expenditure seen at 16.65 trillion rupees in 2013/14

* India's 2013/14 plan expenditure seen at 5.55 trillion rupees

* Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13, which is 96 point of budget estimate

* Set aside 100 billion rupees towards spending on food subsidies in 2013/14

REVENUE

* Expect 133 billion rupees through direct tax proposals in 2013/14

* Expect 47 billion rupees through indirect tax proposals in 2013/14

* Target 558.14 billion rupees from stake sales in state-run firms 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

INFLATION

* Food inflation is worrying, will take all steps to augment supply side

TAX

* Proposes surcharge of 10 point on rich taxpayers with annual income of more than 10 million rupees a year

* To increase surcharge to 10 point on domestic companies with annual income of more than 100 million rupees

* To continue 15 point tax concession on dividend received by India companies from foreign units for one more year

* Propose to impose withholding tax of 20 point on profit distribution to shareholders

* Amnesty on service tax non-compliance from 2007

* 10 billion rupees for first installment of balance of GST (Goods and Services Tax) payment

* Propose to reduce securities transaction tax on equity futures to 0.01 point from 0.017 point

* Time to introduce commodities transaction tax (CTT)

* CTT on non-agriculture futures contracts at 0.01 point

CORPORATE SECTOR AND MARKETS

* Plans to issue inflation-indexed bonds

* Proposes capital allowance of 15 point to companies on investments of more than 1 billion rupees

* Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements

* Insurance, provident funds can trade directly in debt segments of stock exchanges

* FIIs can hedge forex exposure through exchange-traded derivatives

* Investor with less than 10 point stake in a company will be regarded as FII, more than 10 point stake as FDI (foreign direct investment)

* Stock exchange regulator will simplify know-your-customer norms for foreign portfolio investors

* To implement quickly recommendations of financial sector legislative reforms commission

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 equalise duties on steam and bituminous coal to 2 point customs duty and 2 point cvd (countervailing duty)

FOREIGN TRADE

* To cut duty on exports of precious and semi-precious stones to 2 point from 10 point

* No duty on import of ships, vessels

BANKING

* To provide 140 billion rupees capital infusion in state-run banks in 2013/14

DEFENCE

* To allocate 2.03 trillion rupees to defence in 2013/14

AGRICULTURE

* To allocate 801.94 billion rupees to rural development in 2013/14

* Plan to allocate 270.49 billion rupees for agriculture in 2013/14

FINANCE MINISTER COMMENTS

* "Faced with a huge fiscal deficit, I have no choice but to rationalize expenditure. We took a dose of bitter medicine. It seems to be working."

Read More : Highlights of Union Budget 2013-14 - The Times of India

 

[Technoglitch]

1. 6% tax for mobiles above rs.2000

So we have to cut the spending on hotels/restaurants from now.
2. Service tax for hotels that do not serve alcohols too

 

[Heart]

1. 6% tax for mobiles above rs.2000

So we have to cut the spending on hotels/restaurants from now.
2. Service tax for hotels that do not serve alcohols too

Budget 2013 impact: Mobiles set to become costlier


Mobile phones in India are set to become costlier as Finance Minister P. Chidambaram has increased the excise duty on mobiles costing more than Rs. 2,000 from 1 percent to 6 percent.

"About 70 per cent of imported mobile phones and about 60 percent of domestically manufactured mobile phones are priced at Rs 2,000 or below," the Finance Minister said in his Budgetary speech.

"I do not propose to change that in the case of low priced mobile phones. However, on mobile phones priced at more than Rs 2,000, I propose to raise the duty to six per cent," Chidambaram said.

This means that a phone that earlier cost Rs. 10,000 will now cost approximately Rs. 10,495. Phones that earlier cost Rs. 20,000 all now cost approximately Rs. 20,990, while a phone that earlier cost Rs. 30,000, will now cost Rs. 31,485.

Reacting to the proposal, domestic handset maker Lava said in the short term, all players would have to increase prices.

"The mobile phone segment is very competitive. But we have no option but to increase prices. It is a hard Budget for the mobile phone segment," Lava Founder and Director S N Rai said.

Asim Warsi, Vice President, Samsung Mobile said, "The increase in the excise duty on mobile phones will not have a positive impact on the mobile industry and should lead to an increase in prices for end consumers."
Nokia praised the decision to keep concessional excise duty on sub-Rs. 2,000 mobiles, but requested a rollback on the increase in excise duty for mobiles over Rs. 2,000.
"The Government's decision to keep concessional excise duty of 1% intact on mobile phones in the sub-Rs. 2,000 category is welcome," P. Balaji, VP and Managing Director, Nokia India, said. "However, we would request the Finance Minister to roll back excise duty increase on mobile phones beyond Rs. 2,000, as mobile phones are the primary mode of access to information and services; a tool for learning, development and income generation for the youth and non urban consumers."

"It is likely to increase sale of grey, unbranded sub standard handsets which is not good for the consumer, industry and exchequer."
The Finance Minister has however, proposed to increase the duty free allowance for individuals returning from foreign travel. According to the proposed norms, men will be allowed a duty-free allowance of Rs. 50,000, while women will have a duty-free allowance of up to Rs. 100,000.

Coupled with the increase in excise duty on mobiles, the minister seems to have indirectly incentivised purchasing a mobile on your next holiday abroad.


Read More :
Budget 2013 impact: Mobiles set to become costlier | NDTV Gadgets

 

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Following is a list of what will be costlier and what will be cheaper:

Costlier

* Mobile phone handsets priced above Rs. 2000

* Sports utility vehicles

* Imported cars and high-end vehicles priced over $40,000

* Imported bikes with engine capacity of 800cc and above

* Imported yatch and motorboats

* Cigarettes

* Dining at air-conditioned restaurants

* Sales of immovable property worth over Rs. 50 lakh

* Home/flats with a carpet area of 2,000 sq ft or more or of a value of Rs. 1 crore or more

* Marbles for flooring

* Silk clothes produced using imported raw materials

* Set-top boxes

* Parking fees

Cheaper

* Branded apparel

* Precious stones

* Imported cheaper hazel nuts and dehulled oat grain

* Sabudana (tapioca sago)

* Truck chassis

Read More :
Union Budget 2013: what is costlier, what is cheaper - Hindustan Times

 

[IndianMascot]

Nice compilation and update Heart

 

[IndianMascot]

This budget seems to be a disgusting and nothing productive toa person like me.

Someone should tell Chidambaram that in Mumbai , no one can purchase a Flat @ Rs 25 lac. Hence, his investment saving plan upto Rs 2.5 lac is useless for financial capital of this country.

 

[Technoglitch]

even in suburban too,let alone metro cities.

 

[IndianMascot]

And Bank for Ladies Why was this required ??