It's that time again - the one that the pink papers hype from 1 month in advance, and which gives analysts of all hue their 15 minutes of fame in the immediate aftermath. Yes, the Union Finance Minister Pranab Mukherjee presented the much-awaited Finance Bill (budget) 2010 in Parliament today.
The Union Budget for 2010-2011 focused mostly on the common man and social causes, with high increases in spending for infrastructure, the social sector, rural and urban development, and education.
However, the really big highlights of the budget were the drastic changes in personal income taxes, that will benefit the middle classes hugely.
The key budget 2010 highlights are:
1. The government is getting more aggressive on biting the divestment bullet - it proposes to raise Rs. 25,000 crore in the current fiscal through sale of stake in NMDC and SVJN
2. The proposed radical changes in the GST and Direct Tax Code will be in place by April 2011
3. The FDI policy will be made more user-friendly
4. The government will review the stimulus it gave to industry to combat the recession of 2008 and 2009 soon, and move towards fiscal consolidation
5. Allocation for the power sector has been more than doubled to Rs.5,130 crores.
6. The
income tax brackets in budget 2010 have been drastically altered, taking the 10% bracket to Rs. 5 lacs, and the 20% bracket to Rs. 8 lacs
7. In perhaps the largest allocation, the budget apportions Rs. 1.73 lakh crores for infrastructure, with Rs. 19,894 crores to roads
8. Crop loan interest subvention for timely repayment has been raised to 2%
9. Social sector spending has been put at Rs. 1.38 lakh crores for FY 2011
10. The plan allocation for school education is Rs. 31,600 crores
11. The health and family welfare plan allocation rises to Rs. 22,300 crore from Rs. 19,534 crore
12. The big one, given who all our neighbours are - the defence expenditure this year will be Rs. 1.47 lakh crores (with Rs. 60,000 being capex)
13. The total expenditure by the government for 2010-11 is expected to be Rs. 11.8 lac crores, up by 8.6%
14. Where will that be funded from? The gross tax receipts are expected to be Rs. 7,46,656 crore for 2010-11, and non-tax revenues are expected to be Rs. 1,48,118 crore. The rest (Rs. 2.85 lac crores) is what they call the deficit - where the government borrows.
15. The fiscal deficit for FY 2011 is targeted at 5.5% (further reducing to 4.8% by FY 2012). This the minister says is 5.5% of the GDP, which means the GDP of India (the total income of the country) next year is expected to be around Rs. 51 lac crores (or $1.1 trillion - the USA is $14 trillion).
15. The allocation for women and child development has been upped by 80%.
16. Rural development has received Rs. 66,100 crores.
17. Service tax (10%) was left untouched, but the excise duty (levied on goods) was hiked on all non-oil products to 10%, up from 8%.
18. Excise duty on petrol and diesel has been hiked by Rs. 1 per litre. The opposition walked out at the last 2 announcements.
Keep following the union budget 2010 highlights live, and the implications for AP, on fullhyd.com