Key Highlights of Union Budget 2010-11

Key Highlights of Union Budget 2010-11

Economy

• Business sentiment weak at the time of last Budget
• Averted crisis, Indian economy far better situation
• Short-term global outlook bleak during FY10 Budget
• Need to make recovery broad based in coming months
• Economy can achieve 10% GDP growth
• Indian economy is in a far better situation.
• Need to review stimulus, go back to fiscal prudence
• To follow calibrated exit strategy
• First challenge is to get to the high GDP growth path
• Efforts to lower inflation in next 2 months
• GDP rebounded in Q2FY10
• Renewed momentum in MFG led recovery
• High fuel prices added to inflationary pressures
• Q3 GDP at 6% Vs 7.9% (QoQ) – expectation was 7.2%
• Apr 09 –Dec 09  GDP at 6.7% vs 7.1%
• Manufacturing Output up 14.3% vs 1.3%(YoY)
• Agriculture Output at -2.8% vs -1.4%(YoY)
• Construction output up 8.7% vs 3% (YoY)
• Divestment target of 25000 Crs in FY10 & Rs.40,000 Crs in FY11.
• Focus to improve food security and health care systems
• Emergence of double digit food inflation a concern
• $20.9 bn FDI inflows during Apr-Dec '09
• Fiscal deficit revised to 6.9% in FY10.
• Rolling targets of fiscal deficit at 4.8% in 2011-12 and 4.1% in 2012-13
• 15% increase in plan expenditure and 6% in non-plan expenditure
• Fy11 Net market borrowing pegged at 3.45 lakh cr

Financial Services Sector

• RBI mulling over giving banking liscense to pvt players, nbfcs
• Sets aside Rs 16500 cr for PSU banks to get minimum 8% tier 1 capital by March 2011
• Repayment tenure for farmer loans extended by 6 months to June 30th 2011

Infrastructure

• Road transportation kitty increased 13% to Rs 19894 cr
• Budget allocates 1.73 lakh cr for infrastructure
• Govt allocates Rs 16500 cr for railways
• Delhi-Mumbai industrial corridor taken up for development
• To set up 5 more mega food park projects
• More than doubled the allocation to power sector
• Government  to set up coal regulatory authority
• To establish  national clean energy fund
• Propose to hike allotment for renewable energy by 61%
• Funds for power allocation raised from Rs 2232 cr to Rs 5132 cr
• Govt to have a coal regulator for allocation of coal blocks
• Govt to facilitate 20000 MMW of solar power by 2022
• 44% of total plan outlay allocated to infrastructure.
• IIFCL  to double refinancing to banks for infra
• Allocation for urban development up 75% from Rs 3062 cr to Rs 5400 cr

Taxation

• Government in position to implement direct tax code and GST from April 1 2011
• Deduction of Rs 20000 on investment in infra bonds
• Change in TDS threshold limits
• Interest rate on TDS hike to 18% from existing 12%
• Change in slabs for Tax Audit
• Weighted deduction on R&D raised to 200% from 150%
• No tax on Income up to Rs 1.6 lacs
• Current surcharge on companies reduced to 7.5%
• Minimum Alternate tax hiked to 18%
• 30% tax on income above Rs 8 lacs
• 20% tax on income between Rs 5 lacs to 8 lacs
• 10% tax on income between Rs 1.6 lacs to 5 lacs
• IT tax slabs broadened
• IT dept to notify Saral 2 form for individual tax payers
• New Corporate Tax Rate at 33.21%
• Online news agencies to attract service tax
• Service Tax rates unchanged
• Account auditing for all income above Rs 15 lacs
• More services to be brought under tax net
• Rationalisation of customs duty on gaming software
• Toys exempted from excise duty, to become cheaper
• Jewellery to be more expensive
• Monorail granted project import status
• CDs to be cheaper
• Excise duty on CFL halved to 4%
• Refrigerators to be costlier
• Customs duty on Gold and Platinum hiked
• Televisions to be costlier
• Mobile phones to become cheaper
• Peak customs duty unchanged at 10%
• Cement to be costlier
• Air conditioners to be costlier
• Excise on all non smoking tobacco raised
• 7.5% duty on petrol and diesel restored
• 5% duty on crude petroleum restored
• Fuel prices likely to go up
• Excise duty on petrol and diesel raised to Rs 1/litre
• Cigarettes to be costlier
• Excise on large cars,SUVs, MUV raised to 22%
• Partial rollback in Excise Duty from 10% to 8%
• Excise on large cars,SUVs, MUV raised to 22%
• Presumptive tax limit raised to Rs 60 lacs
• Investment linked deduction benefit for 2 Star hotels