UNION BUDGET 2010-’11

-Misha’al Hamza
 Kalam’s Vision!!
 Vision 2020 for building a strong
India
 How far are we?
 10 years more and

does the Union Budget

‘10 go in that direction?

Union Budget '10-'11

 What’s in store for this year?

Challenges:
 Double Digit growth path
 Harness economic growth to consolidate
the recent gains in making development
more inclusive
 Address the weaknesses in government
systems, structures and institutions at
different levels of governance.

Union Budget '10-'11

Overview of Indian Economy

 Broad-based counter-cyclic policy package to

respond to the negative fallout
 GDP Growth for 2009-10 pegged at 7.2%
 Growth Rate of Manufacturing Sector at 18.5%
 Emergence of the double digit Inflation rate

Union Budget '10-'11

 What Pranab offers…
 RBI to give additional banking licenses to private
sector players. NBFC’s could also be considered, if
they meet the RBI’s eligibility criteria
 Rs.16,500 crores provided to ensure that the Public
Sector Banks are able to attain a minimum 8% Tier-I
capital by March 31, 2011.
 Government to provide further capital to strengthen
the RRBs
 Extension of existing interest subvention of 2 per
cent for one more year for exports covering
handicrafts, carpets, handlooms and small and
medium enterprises
Union Budget '10-'11
 Agriculture
 Rs. 400 crores provided to extend the Green Revolution
 Rs. 300 crores provided to organize 60,000 “pulses and
oil seed villages” in rain-fed areas
 Rs. 200 crores provided for sustaining the gains already
made in the green revolution areas through
conservation farming
 FCI to hire godowns from private parties
for a guaranteed period of 7 years
 Agriculture credit flow through banks to
be set at a target of Rs.3,75,000 Crores

Union Budget '10-'11

 Infrastructure
 Rs 1,73,552 crore provided for infrastructure
development which accounts for over 46% of the total
plan allocation
 Allocation for road transport increased
by over 13 per cent from Rs. 17,520
Rs 19,894 crores
 Rs 16,752 crore provided for Railways,
which is about Rs.950 crore more than
last year.

Union Budget '10-'11

 Energy
 Plan allocation for power
sector excluding RGGVY
Rs.5,130 crores
 Bidding process for allocating
coal blocks for captive mining
 Ministry of New and Renewable Energy to get
Rs.1,000 crore in 2010-11
 Solar, small hydro and micro power projects at a
cost of about Rs.500 crore to be set up in Ladakh
region of Jammu and Kashmir
Union Budget '10-'11
 Environment and Climate
Change
 National Clean Energy Fund for funding research and
innovative projects in clean energy technologies to be
established.
 One-time grant of Rs.200 crore to the Govt of Tamil Nadu
towards the cost of installation of a zero liquid discharge
system at Tirupur to sustain knitwear industry
 Rs.200 crore provided as a Special Golden Jubilee package for
Goa to preserve the natural resources of the State, including
sea beaches and forest cover
 Allocation for National Ganga River Basin Authority (NGRBA)
doubled in 2010-11 to Rs.500 crore
(Contd..)
Union Budget '10-'11
 Environment and Climate
Change
 Schemes on bank protection works along river Bhagirathi
and river Ganga-Padma in parts of Murshidabad and Nadia
district of West Bengal included in the Centrally Sponsored
Flood Management Programme.
 A project at Sagar Island to
be developed to provide an
alternate port facility in West
Bengal.

Union Budget '10-'11

 Education
 Plan allocation for school education increased
by 16 per cent from Rs.26,800 crore in 2009-
10 to Rs.31,036 crore in
2010-11.
 In addition, States will have
access to Rs.3,675 crore for
elementary education under
the 13th Finance Commission
grants for 2010-11.
Union Budget '10-'11
 Health

 An Annual Health Survey to prepare

the District Health Profile of all Districts
shall be conducted in 2010-11.

 Plan allocation to Ministry of Health &

Family Welfare increased from Rs
19,534 crore in 2009-10 to Rs 22,300
crore for 2010-11.

Union Budget '10-'11

 Financial Inclusion
 Appropriate Banking facilities to be provided to
habitations having population in excess of 2000 by
March, 2012
 Insurance and other services to be provided using the
Business Correspondent model. By this arrangement,
it is proposed to cover 60,000 habitations.
 Augmentation of Rs.100 crore each for the Financial
Inclusion Fund (FIF) and the Financial Inclusion
Technology Fund, which shall be contributed by
Government of India, RBI and NABARD

Union Budget '10-'11

 Rural Development
 Rs. 66,100 crore provided for Rural Development
 Allocation for Mahatma Gandhi
National Rural Employment
Guarantee Scheme stepped up to
Rs.40,100 crore in 2010-11
 An amount of Rs.48,000 crore
allocated for rural infrastructure
programmes under Bharat Nirman
 Unit cost under Indira Awas Yojana increased to Rs.45,000 in
the plain areas and to Rs.48,500 in the hilly areas. Allocation
for this scheme increased to Rs.10,000 crore.
Union Budget '10-'11
 Rural Development
 Allocation to Backward Region Grant Fund enhanced by 26
per cent from Rs.5,800 crore
in 2009-10 to Rs 7,300 crore
in 2010-11
 Additional central assistance
of Rs 1,200 crore provided
for drought mitigation in
the Bundelkhand region

Union Budget '10-'11

 Urban Development
 Allocation for urban development increased by more than
75 per cent from Rs.3,060
crore to Rs.5,400 crore
 Allocation for Housing and
Urban Poverty Alleviation
Rs.1,000 crore
 Rs.1,270 crore allocated for
Rajiv Awas Yojana as
compared to Rs.150 crore last year

Union Budget '10-'11

 Social Welfare
 “Saakshar Bharat” to further improve female
literacy rate launched with a target of 7 crore
non-literate adults which includes 6 crore women
 Plan allocation for the Ministry of Minority Affairs
increased by 50 per cent from Rs.1,740 crore to
Rs.2,600 crore
 Mahila Kisan Sashaktikaran Pariyojana to meet
the specific needs of women farmers to be
launched with a provision of Rs 100 crore as a
sub-component of the National Rural Livelihood
Mission

Union Budget '10-'11

 STRENGTHENING TRANSPARENCY &
PUBLIC ACCOUNTABILTY

 Rs 1,900 crore allocated to the Unique Identification Authority

of India (UIDAI) for 2010-11. First set
of UID numbers in the coming year.
 A Technology Advisory Group for
Unique Projects (TAGUP) to be set up
to look into various technological and
systemic issues for effective tax
administration and financial governance
 Independent Evaluation Office (IEO) chaired by the Deputy
Chairman, Planning Commission to be set up to evaluate the
impact of flagship programmes.
Union Budget '10-'11
 Security and Justice
 Allocation for Defence increased to Rs. 1,47,344 crore
including Rs 60,000 crore for
Capital expenditure
 About 2,000 youth to be recruited
as constables in five Central Para
Military Forces from Jammu and
Kashmir in the year 2010.
 Government has approved the setting up of the National
Mission for Delivery of Justice and Legal Reforms to help
reduce legal backlog in courts from an average of 15 years
at present to 3 years by 2012.
Union Budget '10-'11
 BUDGET ESTIMATES 2010-11

 Gross Tax Receipts are estimated at Rs. 7,46,651 crore

 Non Tax Revenue Receipts are estimated at Rs. 1,48,118
crore
 Total expenditure proposed in the Budget Estimates is Rs.
11,08,749 crore, which is an increase of 8.6 per cent over last
year
 Plan expenditures in estimated at Rs. 3,73,092 Cr for ’10-’11
 Non-Plan expenditures in estimated at Rs. 7,35,657 Cr
 Fiscal deficit for BE 2010-11 at 5.5% of GDP, which works out
to Rs.3,81,408 crore.

Union Budget '10-'11

 TAX PROPOSALS
 Centralized Processing Centre at Bengaluru processing
20,000 returns daily
 Automation of Central Excise & Service Tax
 Bi-lateral discussions commenced to enhance the exchange
of bank related and other information to effectively track
tax evasion and identify undisclosed assets of resident
Indians lying abroad
 Income tax department to notify SARAL-II form for
individual salaried taxpayers for the coming assessment
year.

Union Budget '10-'11

 Direct Taxes
TAX SLAB

Nil ●
Income upto Rs 1.6 Lakh

10% ●
Rs 1.6 Lakh to Rs. 5 Lakh

20% ●
Rs 5 Lakh to Rs 8 Lakh

30% ●
Income above 8 Lakh
Union Budget '10-'11
 Direct Taxes
 Current surcharge of 10 per cent on domestic companies
reduced to 7.5 per cent
 Rate of Minimum Alternate Tax (MAT) increased from the
current rate of 15% to 18 % of book profits.
 Limits for turnover over which accounts need to be audited
enhanced to Rs. 60 lakh for businesses and to Rs. 15 lakh
for professions

Union Budget '10-'11

 Indirect Taxes
 Rate reduction in Central Excise duties to be partially rolled back
and the standard rate on all non-
petroleum products enhanced
from 8% to 10% ad valorem.
 Excise duty on large cars, multi-
utility vehicles and sports-utility
vehicles increased by 2% points
to 22 per cent
 Restore the basic duty of 5% on crude petroleum. Central Excise
duty on petrol & diesel enhanced by Re.1/litre each
 Excise duty on cigarettes, cigars and cigarillos to be made
coupled with some increase in rates
Union Budget '10-'11
 Medical Sector
 Uniform, concessional basic duty of 5 per cent, CVD
of 4 per cent with full exemption from special
additional duty prescribed on all medical
equipments
 Full exemption currently available to medical
equipment and devices such as assistive devices,
rehabilitation aids etc
 Specified inputs for the manufacture of orthopaedic
implants exempted from import duty.

Union Budget '10-'11

 Precious Metals

 On gold and platinum from Rs.200 per 10 grams to Rs.300

per 10 grams
 On silver from Rs.1,000 per kg to Rs.1,500 per kg
 Basic customs on Rhodium - a precious
metal used for polishing Jewellery
reduced to 2 per cent
 The excise duty on refined gold made
from such ore or concentrate reduced
from 8% to a specific duty of Rs.280
per 10 grams.
Union Budget '10-'11
 Other Proposals
 Customs Duty reduced on production of micro-wave ovens from
10% to 5%
 Value limit of Rs. 1 lakh per annum on duty-free import of
commercial samples as personal baggage enhanced to Rs. 3 lakh
p.a
 Toy balloons fully exempted from Central Excise duty
 Reduction in basic customs duty on long pepper from 70 per cent
to 30 per cent
 Reduction in basic customs duty on asafoetida from 30% to 20%
 Reduction in central excise duty on replaceable kits for household
type water filtersother than those based on RO technology to 4%

Union Budget '10-'11

 Other Proposals
 Reduction in central excise duty on corrugated boxes and
cartons from 8 per cent to 4 per cent
 Reduction in central excise duty on latex rubber thread from
8 per cent to 4 per cent
 Reduction in excise duty on goods covered under the
Medicinal and Toilet Preparations Act from 16 per cent to 10
per cent
 Proposals relating to customs and central excise are
estimated to result in a net revenue gain of Rs. 43,500
crore for the year

Union Budget '10-'11

 Service Tax
 Rate of tax on services retained at 10 per cent to pave the
way forward for GST
 Proposals relating to service tax are estimated to result in a
net revenue gain of Rs3,000 crore for the year
 Accredited news agencies which provide news feed online
that meet certain criteria, exempted from service tax

Union Budget '10-'11

 Proposals
 Proposals on direct taxes estimated to result
in a revenue loss of Rs. 26,000 crore
 Indirect Taxes estimated to result in a net
revenue gain of Rs.46,500 crore
 Net revenue gain is estimated to be Rs.
20,500 crore for the year

Union Budget '10-'11

THANK YOU

Union Budget '10-'11