Union Budget 2009 Highlights: Focus on Growth, Infrastructure and Farmers

New Delhi: Union Finance Minister Pranab Mukherjee, presented the Union Budget 2009 in the Lok Sabha today. Mr. Mukherjee, who was presenting a full-fledged budget after a gap of 25 years, focused on growth, development, infrastructure and agriculture, while announcing a few sops for the taxpayers. Mr. Mukherjee failed to impress the business houses and industries, as the Sensex crashed by over 650 points, which continued presenting the budget.

While the Finance Minister thanked people for giving a thumping mandate to the Congress-led UPA government, he fulfilled the promises made the poor, backwards and minorities. He also came up with a nominal income tax exemption for senior citizens (+Rs. 15,000), women and all others (+Rs. 10,000). Most importantly, he scrapped the Fringe Benefit Tax (FBT), but kept the Corporate Tax structure unchanged.

There is some bad news for people, who want to buy raw Gold and Silver jewellery and Set Top Boxes. Since the FM increased the custom duties on these products, they will become expensive, while Live Saving Drugs, LCD TVs, Mobile Phones, Computers, Laptops, Footwear, Pressure Cooker, Water Filters and CFL Bulbs will become cheaper. However, branded jewellery and gems will become cheaper.

Here are the Highlights of Union Budget 2009:

Achievements & Focus:

1) Priority for Inclusive Growth
2) High quality Public Service to be provided
3) High inflow of Foreign Investment is required
4) To create close to 12 million jobs
5) To focus on increased GDP Growth at 9 per cent
6) The GDP Growth was 6.7% in 2008
7) Need to improve Delivery Mechanism
8) Fiscal Deficit is 6.2 per cent of the GDP in 2008-09
9) Fiscal Deficit is 6.8 per cent of the GDP in 2009-10
10) Fiscal Stimulus of Rs. 1,86,000 crore provided in the last 3 years
11) Need to provide further stimulus to Economy
12) Total Expenditure crosses Rs. 10 lakh crore
13) Planned Expenditure raised by 34% to Rs. 3.9 lakh crore
14) Non-panned Expenditure - Rs. 6.96 crore
15) Interest Expenditure increased by Rs. 2 lakh crore
16) Allocation for Ninth Plan raised by Rs. 40,000 crore
17) Revenue Deficit is 4.8 per cent of GDP.

Agriculture:

1) To increase Agriculture Growth by 4% a year
2) Additional Rs. 1000 cr for Irrigation System
3) Agriculture Credit at Rs. 3.25 lakh crore in 2009-10
4) Loan Waiver Schemes require special attention
5) Farmer Loan Waiver period extended by 6 months
6) Loans for Farmers at lesser interest rates
7) 30% increase in Krishi Vikas Yojna
8) Banks will be asked to provide agricultural sops to Farmers
9) Crop Loan to Farmers at 7 per cent
10) 1% incentive to farmers, who repay their loan.

Business & Finance:

1) More funds for SIDBI for SMEs
2) Trade is 39% of the GDP, Capital growth is 9% of the GDP
3) IIFCL to be given greater flexibility
4) Export Credit Guarantee Scheme extended
5) Foreign Investors are returning to Indian Market
6) To increase investments in Infrastructure and Social Sectors
7) Public Ownership in all Government Limited Companies
8) Government Shares will be open for Public Sale
9) Banks and Insurance to remain with Public Sector
10) Expert Committee on Petroleum Products to be set up.

Print Media:

Stimulus for Print Media extended till December 31, 2009

Labour, Infrastructure & Rural Development:

1) NREGA provided 4.47 people with jobs
2) Minimum wage to be raised to Rs. 100 per day under NREGA
3) NREGA Allocation increased by Rs, 39,100 crore in 2009
4) NREGA to include Water Resources and Fisheries
5) NREGA outlay increased by 144%
6) 100 days of work to be
7) Rs. 7,000 crore allocated to Rural Electrification
8) BPL Families to get 25kg Rice/Wheat at Rs. 3 per kg
9) Rs. 350 crore allocated for BPL Families
10) PM Adarsh Gram Yojna for Backward Villages
11) Allocation for Rural Housing Fund
12) 50% of Rural Women to be enrolled in SHGs
13) Villages with over 50% SCs/STs population to get Rs. 100 crore
14) Indira Awaas Yojna outlay raised by 63%
15) Public-Private Partnership in Railways, Airports etc.
16) Powerloom Hub planned in Rajasthan
17) Handloom Hubs planned in Tamil Nadu and West Bengal
18) Unique IDs in 12-18 months
19) Rs. 120 crore provided for National Unique ID Project
20) Allocation for Commonwealth Games increased to Rs. 3,472 crore
21) LNG Infrastructure is being expanded in the country
22) Local production of natural gas to be doubled
23) Railway Allocation increased by 26% to Rs. 15,800 cr
24) NHAI support up by 23%
25) Allocation for Jawaharlal Nehru Urban Renewal Mission (JNURM) increased by 87 per cent to Rs 12,887 crore
26) Allocation for Bharat Nirmal Yojna increased by 45%
27) Food Security Bill to be introduced in Parliament soon.

Education & Employment:

1) National Mission for Literacy of Women to be launched
2) Female Literacy to be doubled in the next three years
3) Full interest subsidy on educational loans
4) All Employment Exchanges to go Online
5) Stimulus for Job Seekers
6) To create close to 12 million jobs
7) Sops for students from economically weaker sections
8) Higher Education outlay hiked by 100 crore
9) Rs. 50 crore allocation for Punjab University
10) Rs. 2,113 crore for NITs and IITs.

Welfare of Minorities:

1) Allocation of Minority Welfare increased to Rs. 1,740 crore
2) Rs. 1,000 crore for Cyclone Aila victims in West Bengal
3) Rs. 500 crore for displaced Sri Lankan Tamils.

Health:

1) Rs. 350 crore for PHCs, 40% increase in allocation
2) NRHM to get Rs. 2,057 crore more
3) 46 lakh BPL Families under new Health Insurance Plan
4) Rural poor to get Biometric Health Cards.

Defence:

1) Defence Outlay increased to Rs 62,000 crore from Rs 54,824 crore
2) All Defence Pensioners to get increased salary
3) 1 Rank, 1 Pension extended to all security forces
4) 100,000 homes for Central Paramilitary Forces
5) Rs. 430 cr for Police Modernisation.


Taxation:

1) Saral Form 2 to be introduced
2) Tax distortions to be eliminated
3) Centre's Direct Tax Shares increased to 56%
4) Centralised Tax Processing Centre to be set up in Bangalore
5) New Direct Tax Code to come up in 45 days
6) To introduce GST from April 1, 2010
7) No changes in Corporate Tax Structure
8) Income Tax Exemption Limit to be raised to Rs. 2.40 lakh from Rs. 2.25 lakh for Senior Citizens
9) Income Tax Exemption Limit to be raised to Rs. 1.90 lakh from Rs. 1.80 lakh for Women
10) Income Tax Exemption Limit to be raised to Rs. 1.60 lakh from Rs. 1.50 lakh for All Others
11) Fringe Benefit Tax (FBT) abolished
12) Surcharge on Personal Income Tax scrapped
13) Investment Link tax benefits for Business Houses
14) Minimum Alternate Tax (MAT) increased to 15% from 10%
15) Corporate Tax under MAT extended from 7 to 10 years
16) The Commodity Transaction Tax abolished
17) Political Funding will get 100% Deduction
18) Tax-GDP Ratio improved to 11.5% in 2008-09
19) Tax Holidays for Exporters extended till 2011
20) Tax Holidays for Commercial Production of Natural Gas extended
21) National Pension Scheme exempted from STT
22) Tax Exemption for all High Education Loans.

Custom & Excise Duties:

1) Custom Duty on life saving drugs reduced by 5%
2) Custom Duty on LCD, Footwear, Mobile Phones, Pressure Cooker, Water Filters, CFL Bulbs reduced by 5%
3) Custom Duty on Gold Bars raised by Rs. 200 per 10 grams
4) Custom Duty on Gold Jewellery raised by Rs. 500 per 10 grams
5) Branded jewellery items exempted from Excise Duty. Tax exemptions have also been announced for gems, jewellery and textiles.
6) 4% Excise Duty on Cotton Textiles restored
7) 5% Custom Duty on Set Top Boxes
8) Custom Duty on Bio-diesel reduced
9) Excise Duty on Petrol-driven trucks reduced to 8% from 20%
10) 8% Excise Duty on Manmade Fibers restored
11) Service Taxes extended to Legal Consultants
12) No Service Tax on consultancy provided by Chartered Accounts and Company Secretaries.