ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported me dur ng the wr t ng o! th s "ook# My deepest thanks to Le$turer, MRS. KIRAN NARANG the Gu de o! the pro%e$t !or gu d ng and $orre$t ng &ar ous do$uments o! m ne w th attent on and $are# 'he has taken pa n to go through the pro%e$t and make ne$essary $orre$t on as and when needed# Thanks and appre$ at on to all the help!ul people !or the r support# I would also thank my Inst tut on and my !a$ulty mem"ers w thout whom th s pro%e$t would ha&e "een a d stant real ty# I also e(tend my heart!elt thanks to my !am ly and well w shers#

Government Budget Mean ng

A government budget is a legal document that is often passed by the legislature, and approved by the chief executive-or president. For example, only certain types of revenue may be imposed and collected. Property tax is frequently the basis for

municipal and county revenues, while sales tax and/or income tax are the basis for state revenues, and income tax and corporate tax are the basis for national revenues. he two basic elements of any budget are the revenues and expenses. !n the case of the government, revenues are derived primarily from taxes. "overnment expenses include spending on current goods and services, which economists call government consumption# government investment expenditures such as infrastructure investment or research expenditure# and transfer payments li$e unemployment or retirement benefits. %udgets have an economic, political and technical basis. &nli$e a pure economic budget, they are not entirely designed to allocate scarce resources for the best economic use. hey also have a political basis wherein different interests push and pull in an attempt to obtain benefits and avoid burdens. he technical element is the forecast of the li$ely levels of revenues and expenses.

O"%e$t &es
(i) (ii)
'conomic "rowth( to promote rapid and balanced economic growth so as to improve living standard of people. )eduction of Poverty and &nemployment( o eradicate mass poverty and unemployment by creating employment opportunities and providing maximum social benefits to the poor. !n fact, social welfare is single most important ob*ective. 'very !ndian should be able to his basic needs li$e food, clothing, and housing along with decent health care and educational facilities. )eduction of !nequalities( o reduce inequalities of income and wealth through levying taxes and granting subsidies. "overnment levies high rate of tax on rich people and lower rate on lower income group. Again government provides subsidies and amenities to people whose income level is low. +ore emphasis is laid on equitable distribution of wealth and income. 'conomic progress in itself is not a sufficient goal but the goal must be equitable progress. )eallocation of )esources( o reallocate resources so as to achieve social and economic ob*ectives. Again, government has to allocate resources into areas where private sector initiative is not coming, e.g., public sanitation, rural electrification, education, health, etc.

(iii)

(iv)

Types o! )udget
National Budget

,ational budgets are legal documents, which are provided by legislatures before being passed by the executive head of the nation, such as the president, prime minister or other chief official of a nation. he budgeting process of a nation involves( -lassifying expenses( he expenses allocated in a government budget include consumption and investment expenditure on infrastructure development and research and development. !t also includes transfer payments, such as social security and unemployment benefits. )evenue determination( he primary source of revenue generation for a government budget is taxes. Preparing budgets( A government budget may be for a quarter, a year, five years or ten years. he period of the budget and the procedure of revenue allocation are exclusively mentioned by the government.

'xamples of specific country budgeting processes, such as those in &., -anada, &/, "ermany, Australia, ,ew 0ealand, 1apan, !ndia and %ra2il, are detailed at the end of this article.

Company Budget A company budget is prepared by the owner and shareholders of the company. !t may also be prepared with the inputs of other sta$eholders, such as employees and creditors. he budgeting process of a company involves( -ategori2ing 'xpenses( %usiness expenses include capital expenditure on acquisition and modification of assets and revenue expenditure on routine activities such as payment of electricity and rent. )evenue calculation( .ources of business revenue include capital, borrowed funds and sale of goods. %udget preparation( his is generally prepared for a financial year. he purpose of the budget is to allocate funds for various business activities, such as production and distribution.

Personal Budget A personal budget is prepared by individuals and families to allocate income for various expenses, savings, investments and other financial obligations, such as debts. A personal budget is prepared by( 3rgani2ing expenses( Personal expenses include expenditure on present consumption or future savings and investments. his includes incorporation of travel and leisure expenses and savings for the education fund of children.

)evenue summation( An individual earns an income from a number of sources, including salary, social security, wor$er4s compensation and rent collection. %udget preparation( his is generally prepared on a wee$ly or monthly basis. he idea of a personal budget is to allocate income for various expenses, while setting aside a portion for savings.

he budgeting process of governments, companies and individuals involves reevaluation and revision of the budget. he budget is periodically monitored with respect to established targets and results obtained. .hortcomings in the outcome are evaluated and necessary modifications are made in the future budget to avoid unnecessary expenses.

Impact of the Government on the Budget Economy

*n on )udget +,-, Impa$t on Agr $ulture se$tor
In an attempt to lay a major impact on Agriculture sector expansion, the Finance Minister of India Pranab Mu herjee proposed various benefits and initiatives for the sector !hile presenting the "nion budget #$%$ in parliament on February #&, #$%$' "nion (udget #$%$ Impact on Agriculture sector )he Finance Minister in his speech supported the strategies for the development of agriculture and other sectors related to it such as a*uaculture, poultry, apiary, meat, and horticulture, marine and dairy' +e tal ed about fe! chief areas !hich demand immediate attention' )hey are,

Introduction of a po!erful supply chain to support the processing and mar eting of consumable farm turn out, Introduction of advanced technology and infrastructure to assist the conversion of farm produce into a finished value added product and Introduction of technology to enhance agricultural turn out'

)he various benefits offered by the Finance Minister to support agriculture sector in "nion budget #$%$ are,

Facilitating project import status to the sector along !ith a concessional import tariff of -. for the establishment of automatic management systems' /omplete service tax exemption for the establishment and sponsoring of such apparatus' Installation of cold storage rooms for conservation of agriculture turn out and establishment of processing divisions /omplete customs tax exemption for refrigeration divisions re*uired for the production of chilled vans or truc s

(enefit of -. concessional customs tariffs on particular agricultural e*uipment not created in India )ax exemption from central excise tariff on particular e*uipment for conservation and processing of agriculture and associated sectors )ax exemption from service tariff on the conservation and !arehousing of farm produce' 0ervice tax exemption on the testing and documentation of agricultural seeds 0ervice tax exemption on the transportation of cereals and pulses by rail and road'

*n on )udget +,-, Impa$t on "ank ng se$tor

)he Indian ban ing sector has emerged unaffected from the economic crisis !hich recently hit the !orld' +ence to ensure the continuance of the sector1s economic expansion and to meet the pre2re*uisites of a ne! financial system, FM proposed the re*uirement of international exposure to ban s and improvement in the accessibility of ban ing services' In his "nion (udget #$%$ speech the Finance Minister Pranab Mu herjee announced fe! benefits and initiatives !hich are projected to trigger the expansion and have a great impact on ban ing sector in F3 #$%$2%%' Union Budget 2010 Impact on banking sector )he Finance Minister in his "nion budget #$%$ speech proposed ban ing licenses to Indian ban s to ensure the expansion of ban ing sector in si4e and turnover' +e thus notified the consideration of 5(I in offering extra ban ing licenses to private ban s and also to non (an ing Financial /ompanies, if the latter satisfies the 5(I1s re*uirements' Union Budget 2010 Initiatives for Public Sector Bank 6uring the financial year #$$72$8, the 9overnment invested 5s'%8$$ crore as )ier2I funds in : public sector players to uphold a contented level of /apital to 5is ;eighted Asset 5atio' In addition an extra amount of 5s'%#$$ crore has been invested cuurently and for the F3 #$%$2%%, the FM suggested an amount of 5s'%&,-$$ crore to guarantee that the public sector players can achieve 7. )ier2I funds by March <%, #$%%' "nion (udget #$%$ Initiatives for 5egional 5ural (an s

=ver the years 5egional 5ural (an s (55(s) have played a significant part in offering monetary help to rural economy' )he funds derived from these ban s are distributed among the subsidi4ed ban s, /entral 9overnment and 0tate 9overnments' >eeping in consideration that the ban s !ere last subsidi4ed in F3 #$$&2$?, the FM proposed investment of more capital in order to reinforce the functioning of 55(s and to assist an improved lending to the rural financial system'

*n on )udget +,-, Impa$t on edu$at on se$tor

)he Finance Minister of India suggested various benefits and allo!ance for education sector of India !hile presenting the "nion budget #$%$ in parliament on February #&, #$%$' )he proposed steps and subsidiaries are anticipated to have a major impact on education sector in #$%$2#$%%' "nion (udget #$%$ Impact on education sector )he Finance Minister in his "nion budget #$%$ speech suggested the restoration of 5ight of /hildren to Free and /ompulsory @ducation Act, #$$8 !hich formulates a legal agenda for privileges of children falling under the age group of & to %: years' +e also notified the achievements of 0arva 0hi sha Abhiyan (00A) launched by the government, in the field of education and improving infrastructure for basic education' Mr Mu herjee suggested a monetary hi e for elementary education to 5s'<%, $<& crore in the current fiscal year against the previous 5s'#&, 7$$ crore, in addition all states access to basic education !ith a grant of 5s'<, &?- crore for #$%$2%%'

)here has been a mixed response from people on initiatives proposed by the Finance Minister in education sector' ;hile some call it a balanced budget, others feel that the need for subsidi4ing corporate sector to train freshers has been ignored' According to corporate houses, the involvement of big firms in the graduate level education should have been listed in the agenda to trigger the employability of undergraduates' Moreover, the involvement of private industry in association !ith government should be encouraged to polish the s ills of the students' )he response from students and business professionals has not been positive' )hey believe that higher education !as completely ignored by the Finance Minister and more importance !as given to elementary and basic education by allocating a %&. hi e'

*n on )udget +,-, Impa$t on energy se$tor

The various benefits announced by the Finance Minister of India Pranab Mu herjee !hile presenting the "nion budget #$%$ in parliament on February #&, #$%$ are projected to have a colossal impact on energy sector of India' "nion (udget #$%$ Impact on energy sector )he Finance Minister in his speech declared a hi e in the monetary incentives for energy sector up to 5s'-,%<$ crore in current fiscal year against the previous 5s'#,#<$ crore' )he government also intends to initiate guidelines to establish A/oal 5egulatory AuthorityA !hich !ould assist issues such as monetary costing of coal and setting a performance

benchmar ' +e has also allocated an incentive hi e of &%. for the Ministry of Be! and 5ene!able @nergy from the previous 5s'&#$ crore to 5s'%, $$$ crore in the current F3' In addition, to deal !ith the problem of energy shortage in the Cada h district of Dammu and >ashmir, the minister has suggested establishing of solar plants and other micro po!er plants at a price of 5s'-$$ crore' According to the Finance Minister, the government also intends to initiate an aggressive bidding method for assigning coal bloc s for caged mining to guarantee better transparency and improved contribution in construction from these bloc s' =ther benefits for energy sector proposed in "nion (udget #$%$

:. of reduction in central excise tariff on C@6 lights, energy2proficient supply of street, homes and offices lighting' Full central excise tax exemption on electric cars and automobiles that propose to be an eco2friendly substitute to petrol or diesel automobiles' :. of tariff on such vehicles have been imposed in order to neutrali4e the tariff paid by the manufacturers of such components' :. concessional excise tariff on battery2run ric sha!s

*n on )udget +,-, Impa$t on enterta nment se$tor

@ntertainment industry is one of the biggest industries in India' (ut recently it has been undergoing major complexities in importing digital masters of its movies for replication loaded on a digital carrier in comparison !ith those traded in on cinematographic coating' )his results in variations in the structure of customs tariff' >eeping this in consideration, the Finance Minister in his "nion budget #$%$ speech proposed different measures !hich are expected to leave a colossal impact on entertainment sector of India' Un on Budget !"#" Impact on enterta nment $ector )he Finance Minister has proposed to charge custom tariff only on the cost of the medium of entertainment' )he same allo!ance !ill be application to music industry and import of gaming soft!are' In such cases the cost of relocation of intellectual rights !ould be charged under service tax la!s' /able broadcast of infotainment is experiencing a major alteration !ith the implementation of digital technology' )his calls for the multi2service operators to infuse in 6igital +ead @nd machinery' In an attempt to offer project import status to the multi2

service operators, the FM has allotted a -. concessional customs tariff !ith an entire tax exemption from extra tariffs to the introductory activities of such schemes'

*n on )udget +,-, Impa$t on e(port se$tor

To trigger the gro!th of export sector in India, the Finance Minister Pranab Mu herjee has recommended some major initatives !hile presenting the "nion budget #$%$ in parliament on February #&, #$%$, that are expected to lay a considerable impact on the export sector in coming years' "nion (udget #$%$ Impact on energy sector )he Finance Minister in his "nion budget #$%$ speech extended the interest funding of #. for another fiscal year for exports sector encompassing handicrafts, carpets, handlooms and 0M@s' 9overnment has also offered interest funding of #. on pre2consignment export credit and has extended it up to March <%, #$%$ for exports in specific industries' "nion (udget #$%$ reactions from exporters If on one hand "nion (udget #$%$ offered a sign of relief to exporters, it also left them dissatisfied on the other' ;hile the extension of concessional export investment system to another one year !as hailed by selective exporters, they also felt that more initiative could have been implemented to enhance the sector' @xporters believe that the segregation of textiles, marine, gems and je!ellery and leather from the comprehensive plan add to the anguishes of these industries !hile some are still indicating a steady decline or lo! /A95'

)he Apparel @xport Promotion /ouncil (A@P/) said that the finance minister neglected the exporters1 petition for exclusion of service tax, inspite of asserting compensations' )hey believe that the refund method being so un!ieldy has hardly proved beneficial to the exporters' Fe! exporters expressed their discontent !ith the (udget for not ta ing the chief issues of 0ection %$( (A) relief for tax exemption into consideration for handicraft exporters' )he total impact of the "nion (udget #$%$ on export sector is not favorable for labor2 intensive industries li e handicrafts'

*n on )udget +,-, Impa$t on Automo" les se$tor

Though the "nion (udget #$%$ did not satisfy all the expectations of the sector, but it is anticipated to have a positive impact on the automobiles sector in the coming years as !ell as on the Indian economy as a !hole'

"nion (udget #$%$ Impact on Automobiles sector )he Finance Minister in his "nion (udget #$%$ speech announced implementation of ne! tariffs on cars and other vehicles' (elo! is the list of "nion (udget #$%$ Automobiles sector proposals,

%$. tariff imposed on small cars !hich until no! benefited from the 7. excise tariff' )ax on big cars !ill be charged at ##. against the previous #$. in addition to 5s %-, $$$ @xcise tariff to be charged on 6iesel and Petrol at 5e % on the every litre' )his can also be translated as an increase in price of 5s #'-7 per litre and 5s #'&? per litre on diesel and petrol respectively' +i e in car prices due to higher input price and increase in excise tariff on steel' Maruti, +yundai and )ata have already declared an increase in their car costs' :. of excise tariff on electric cars against the previous 7.' Full exemption from custom tax on electric automobiles and on its components' /oncessional tax on 0olar po!er ric sha!s due to removal of excise tariff on solar panels'

*n on )udget +,-, !eed"a$ks !rom Automo" les se$tor Automotive industry experts believe that the several proposals announced by the FM !ill have a fruitful impact on Automobiles sector of India' )he improvement in @xcise tariff on electric cars !ill help the manufactures to access /@BEA) credit and avail for tax exemptions on customs tariff on electric cars components' As the automotive industry is recovering from the financial do!nturn, it did not expect any increase in excise tariff and implementation of tariff on petrol and diesel' (eing one of the major gro!th drivers of Indian economy, the sector expected the extension of incentive allocation for some time till its complete recovery' )he industry !as hoping for a decrease in the huge gaps in excise tariffs bet!een small cars and /Es !hich the FM did not address' +o!ever, the tax consessions granted to eco2friendly vehicles !ere !elcomed by the sector'

*n on )udget +,-, Impa$t on IT se$tor

*n on (udget #$%$ has introduced some excellent proposals for ban ing, pharma, construction, and education and hospitality industries but has failed to produce any such impact on the I) sector of India' "nion (udget #$%$ Impact on I) sector 0ince the )ax 5ebate has not been mentioned in the budget declaration and is expected to

end on March #$%%, the (P= players li e ;ipro, Infosys )echnologies, )ata /onsultancy 0ervices, etc are estimated to incur losses from the budget announcements in future years' Another expectation !hich the FM failed to meet !as the extension of 0)PI (0oft!are technology Par of India) in I) sector, to !hich he counter argued by notifying the industry1s gro!th in the last fiscal' >eeping this in consideration the government has hi ed its factory gate tariffs' +o!ever, the allo!ance of 5s %8$$ crore by the government to I) sector for "I6 ("ni*ue Identity) project !ill be of great benefit and the declaration of the improvisation of national employment exchanges !as !elcomed by the industry' )o attain the 90) rollout by April #$%%, the FM has called for the revamping of in2house !or methods by both the central and state indirect tax governments' +e suggested that the renovation should be based on the extensive utili4ation of Information )echnology and also proposed the initiation of project A/@0 2 Automation of /entral @xcise F 0ervice throughout the nation in an attempt to impart precision in tax government and recovery in the release of taxpayer facilities' =n the same note a project named Mission Mode has been initiated for mechani4ation of /ommercial )axes in 0tates !ith an allo!ance of 5s'%%<< crore out of !hich 5s'7$$ crore is allocated for /entral government' )he FM suggested the simplification of the method of repayment of accrued credit to service exporters by implementing re*uired alterations in the characteri4ation of service exports and methods'

Union Budget 2010 Impact on health sector

;hile presenting the "nion budget #$%$ in parliament on February #&, #$%$, the Finance Minister of India Pranab Mu herjee proposed various benefits for health sector of Indian economy' )hese initiatives are expected to have a significant impact on health sector in the current fiscal year' Union Budget 2010 Impact on health sector )he Finance Minister in his "nion budget #$%$ speech called for the execution of an Annual +ealth 0urvey of all Indian districts in F3 #$%$2%%' )he findings derived from the revie! are expected to be of great assistance to the general public and for the future health proposals formulated by Bational 5ural +ealth Mission' 9oing by the past records, B5+M had effectively filled the gaps in the deliverance of critical health facilities in rural districts' In addition, the finance minister proposed to offer health facilities at household levels and in urban and rural areas' 0ince the implementation of the plan calls for utili4ation of important resources, he promised to locate those resources !ith the re*uired support of the central government' +e also recommended a hi e in monetary incentives for the Ministry of +ealth and Family ;elfare to 5s'##, <$$ crore for the current fiscal year against the previous 5s'%8,

-<: crore' Incentives to /entral 9overnment +ealth 0cheme (/9+0) have also been permitted as deductions !ithin the entire limit for tax rebate along !ith incentives to health insurance plans !hich are presently permitted as deductions under the Income )ax Act'

Union Budget 2010 Impact on Infrastructure sector

)he Finance Minister Pranab Mu herjee in his "nion budget #$%$ speech gave due importance to the expansion of excellent *uality of physical infrastructure in the form of roads, airports, ports and rail!ays to maintain economic development' +e proposed fe! initiatives !hich are estimated to have a considerable impact on Infrastructure 0ector in F3 #$%$2%%' "nion (udget #$%$ Impact on Infrastructure sector ;hile tal ing about bridging the policy gaps in Infrastructure sector, the Finance Minister in his "nion budget #$%$ speech proposed the sustain the driving force for improving infrastructure in urban and rural districts' +e allocated 5s'%, ?<,--# crore for infrastructure gro!th in the country in budget #$%$' 9overnment has set the target of constructing #$ m of national high!ays on daily basis and to trigger these changes projects have been underta en via public private partnerships (PPPs)' )he FM increase the allotment of road transport to 5s'%8, 78: crore against the previous 5s'%?, -#$ crore for #$%$2%%' In an attempt to revise and enlarge the rail!ay net!or , he also allocated 5s'%&, ?-# crore !hile presenting the union budget' +e notified the completion of introductory activities for the establishment of & industrial investment nodules !ith ecological infrastructure of international standard' In addition, the 6elhi2Mumbai Industrial /orridor project has been underta en for integrated local expansion' 5estoration of Infrastructure (onds after a period of - years !as also in the (udget #$%$ agenda' It is one of the best taxes saving schemes and eeping this in consideration the FM has proposed an extra limit of 5s'#$, $$$G2 for investing in Infrastructure (onds' In order to provide long term monetary support to infrastructure projects, government has also set up the India Infrastructure Finance /ompany Cimited (IIF/C)' )he expenditures of IIF/C are li ely to reach 5s'8, $$$ crore by the end of March #$%$ and 5s'#$, $$$ crore in the corresponding period of F3 #$%%'

Union Budget 2010 Impact on medical sector

Medical sector in India got tax exemptions in the manufacturing of its devices from "nion (udget #$%$2%% along !ith the introduction of excellent initiatives to!ards the development of the sector' )hese measures !ere proposed by the Finance Minister in

his "nion budget #$%$ speech in the parliament on February #&, #$%$ and are estimated to have a significant impact on medical sector in F3 #$%$2%%' "nion (udget #$%$ Impact on medical sector )he Finance Minister in his "nion budget #$%$ speech proposed a concessional tariff of -., /E6 of :. in addition to tax exemption from exclusive additional tariff on all medical apparatus' A -. concessional tariff has also been proposed on components for the production of such apparatus along !ith an exemption from /E6 and exclusive tariff' )he FM has proposed to extend the tax exemption on medical apparatus and devices and concessional tariff available to certified government hospitals' Moreover, the producers of orthopaedic implants have been relieved from import tax' )he manufacturers of orthopaedic implants !ere demanding for a greater rate if tariff on their inputs rather than their finished products' /urrently the =rthopedicG prosthetic products industry !orth 5s' -?-$ crores, as per a recent industry analysis carried out by Bational Institute of Pharmaceutical @ducation and 5esearch by (BIP@5), Ahmedabad' )he incentives proposed by the FM are expected to trigger the expansion of already fast developing medical apparatus and machinery sector in India' (y #$%$ the medical apparatus and machinery industry is estimated to reach "06 %'7 billion and is projected to expand at a rate of #<. on annual basis as per the BIP@5 report' )he ministry has also declared some tax incentives for the medical sector for establishing Acold chainA road and rail net!or along !ith a hi e in subjective deduction on 5F6 expenses up to #$$. on internal 5F6 operating costs' )he budget has also declared to increase the subjective deduction on expenses accrued on central labs, 5F6 organi4ations, institutions, universities, to facilitate scientific investigation to %?-. against the previous %#-.'

Union Budget 2010 Impact on metal sector

While the costs of precious metals continue to mount, the Finance minister in his (udget #$%$ speech proposed various index rates for gold, platinum and silver' +e also recommended fe! steps that are expected to leave immense impact on metal sector of India and trigger its production' "nion (udget #$%$ Impact on metal sector !hile gold and platinum prices have been increased from 5s #$$ to 5s <$$ on every gram by the FM, the silver price has also been hi ed from 5s'%, $$$ to 5s'%, -$$ on every g' In the 9ems and je!elry sector, the basic customs tariff on 5hodium a valuable metal has been reduce by #. and !ill currently be charged at %$.' )o trigger in2house refining

capacity for gold, the FM reduced basic custom tariff on gold ore and laid more emphasis to specific duty rather than the #. ad valorem' )he specific tariff !ill be charged at 5s %:$ on every %$ grams of gold !ith full tax exclusion from exclusive extra tariff' In addition, the excise tariff on concentrated gold is reduced to 5s #7$ on every %$ grams of gold content' "nion (udget #$%$ feedbac s from gems F je!elry sector of India Follo!ing the proposals announced by the FM, 9ems and De!ellery @xports Promotion /ouncil expressed their anguish over the hi e in customs tariff' Previously, custom tariff of 5s #$$ !as charged on gold !hen the cost of the metal !as 5s %#,$$$ on every gram and no! as per ne! proposals the dury has been increased to 5s <$$ !ith a cost of 5s %?,$$$ on every %$ grams' +o!ever the percentage has not been touched' At the time !hen the industry !as gearing up to emerge from the do!nturn, the (udget announcement arrived as a bolt from the blue' )he sector expected a # year tax exemption to recover from the crisis !hich it had suffered during the recession'

T.E Go&ernment

)udget +,-,/+,-0-1The go&ernment "udget +,-,/+,-- At a Glan$e#

0+1The & ews o! the top e$onom sts o! the $ountry 2INDIA3# 041The op n on o! the e(perts !rom d !!erent ! elds# 051The e(pe$tat ons o! the $ommon man#

[b] THE IEW! "# THE T"$ E%"&"'I!T! "# THE

%"U&T()*
Ushar Poddar, vice president Goldman Sachs (India) & chief economist,

A)he central fiscal deficit is projected to come do!n to -'-. in F3%% from a revised &'?. in F3%$' @ven though this !as in line !ith mar et expectations, the government also laid out a medium term plan for fiscal consolidation, aiming to reduce the deficit to :'7. in F3%#, and to :'%. in F3%<' ;e see this as a positive move, as it aims for more consolidation than recommended by the %<th Finance /ommission' ;e li ed the overall revenue and expenditure gro!th number, and thin that financing the deficit !ill not be a big problem for in F3%%, !hich is an incremental positive for government bonds, e*uities, and the IB5' =ur sector analysts thin the budget is a positive for financials, infrastructure, oil producers, but negative for utilities, oil mar eting companies'A

Chandrajit Banerjee, director general, Confederation of Indian Industry

)he Finance Minister1s fine balancing act is visible in the budget proposals !here on the one hand he has clearly set the roadmap for fiscal consolidation by setting the targets for fiscal deficit reduction over the next three years, raising resources for capital expenditure by setting disinvestment targets and partially rolling bac the excise duty stimulus and on the other hand, he has set the stage to address productivity issues in agriculture, putting more disposable income in the hand of common man, positive environment for gro!th'

Madhabi Puri Buch, managing director and chief executive officer, ICICI Securities Ltd.

A)he budget reflects A/onfidence and /larityA' /onfidence in the ability of the Indian economy to aspire to double digit gro!th and the ability of the government to contain the fiscal deficit' /larity on the priorities of the government, Infrastructure and the rural economy' Infrastructure !ill include not just conventional po!er but also rene!able energy, not just roads and ports but also social infrastructure' )he rural economy !ill see momentum on account of increased allocation to social schemes, access to farm credit and rural infrastructure,A

Saurabh anavati, chief executive officer, !eligare Mutual "und

A)his is a gro!th budget' 0trong anticipated 96P gro!th numbers of %:2%-. in nominal terms is allo!ing the Finance Minister to continue !ith the stimulus pac age and increased expenditure' )here !ere positive surprises on the personal income tax front, reduction in corporate surcharge, infrastructure and social sectors, ban ing reforms side and not much tin ering on the service tax' Fiscal discipline implementation !ill be the ey and only time !ill tell, but the intent of the finance minister is heartening' +aving said this, the mar et has rallied on very lo! expectations from the budget today and !ill fall in line !ith the real issues going for!ard !hich include corporate earnings1 gro!th visibility, domestic consumption gro!th and global head!inds'A

#nalysts at India Info line Ltd.

HIn !hat is seen as a !elcome relief for the mar et, "nion Finance Minister Pranab Mu herjee shunned populism and chose a more balanced approach in devising the (udget for #$%$2%%' )here !eren1t too many big bang reform2centric announcements' (ut, !hat probably came as a relief to the mar ets !as absence of major negatives, barring the hi e in MA) and increase in the levy of oil prices' 0till, it !asn1t completely devoid of concerns, especially given the fact that the Finance Minister failed to give any definite timeline on ey reforms 2 90), 6)/ and =il 0ubsidies'A

#tul Punj, chairman, Punj Lloyd $rou%

1Punj Cloyd 9roup applauds the initiatives underta en by the Finance Minister in (udget #$%$' )he government has given due importance to all important sectors li e po!er, roads, rail!ays, rene!able energy etc' ;e appreciate the allocation of :&. of total plan outlay to the infrastructure industry' Infrastructure is extremely crucial as the !orld is loo ing at India and this announcement could not have come at a more opportune time' )o facilitate #$$$$ MM; of solar po!er by #$## is another !elcome step as development of rene!able energy is extremely crucial for the country' )he taxation relief to individuals is also appreciable outcome of the budget' Increased allocation for 5ural and "rban development infrastructure !ill further help in improving the living standard of the people' (udget #$%$2#$%% has presented a rene!ed sense of optimism over the country1s gro!th and clear signals from policyma ers to bring deficits bac to manageable levels'I

5c6 7' 3P!,!3, '8P') . F)3+ 9!FF')',

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Subrahmanyam peri, Financial coal"ields ltd, ccountant, spit! eastern

(udget #$%$ has given relief to middle income group of salaried class' (ut, the lo!er income group has been left out' Added to the misery, increase in the fuel prices and enhanced excise duty is bound to have a spiralling effect on the prices of various commodities' If the middle income salaried class gets relief in tax and needs to pay more for fuel and other commodities, ho! come the lo!er income group meet this price hi es' 0econdly, there !as a big tal in almost every ne!s channel in discussions !ith panel of experts that a big tax relief has been given for salaried people' India does not consist of only salaried people of organi4ed sector' ;hat about the people !or ing in un2organi4ed sectors !ho are not supported by regular 6A compensation for price hi e' )he only !ay

to give relief to the people is by controlling inflation and controlling the prices of essential commodities' A meager percentage of poor are covered by (PC criteria and at least, are getting rice and !heat at cheaper rates' +igher income groups, including salaried employees of organi4ed sector are getting 6A relief compensating the price hi es' 5ests are being crushed constantly by the increasing prices and inflation' 9ovt' should impartially, thin about this section, !hich constitutes a larger chun and do really something for their benefit' It is possible, for the 9ovt' if it tries to control the prices earnestly' 'onam Kapoor 'o!tware De&eloper6 I)M I mean this is seriously hampering all, prices are too steep for a common man, its even giving a pinch to the upper middle class and the rich !ith this high inflation, and !hat about the middle class and the poor people ho! !ill they afford such high prices, and to top it all politicians giving comments li e, people !ill not die if they donIt eat sugar, and they also !ent further saying that it is bad to eat sugar as it !ill cause diabetes, this is absurd from the politicians to go on and say something li e that' 0o this year1s top agenda should be to contain this high price rise that !e are seeing, in fe! more months li e this it !ill get really difficult for all to lead a normal life as there is a great mismatch of !hat one gets salary and the current spending that happens due to the high price rise'

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In"o%ech

;ell according to me, the main issues that !ill be given top priority in this budget !ould be, )axes, )he common men and the corporate are loo ing for decrease in taxes' )he Finance Minister is li ely to augment exemption limit of individual taxes to 5s < la h from 5s%'&$ la h for salaried people' @xemption limit for !omen is expected to be increased from %'7$ la h to : la h and for senior citi4en from 5s # la h to - la h' +o!ever, taxes levied on the per s availed by income earners are expected to be restructured on higher level' )his arrangement may satisfy junior employees and senior citi4ens' (ut, it may not go !ell !ith the people belonging to higher position' 0timulus,

As high prices of diesel and petrol !ould bear adverse effect on the transport rates of food products, the stimulus pac ages are expected to continue in the oil industry' +o!ever, partial !ithdra!al of the stimulus aid can be expected in this sector to tac le the situation of increasing fiscal deficit' George +arghese ,roprietor, -aycees Bot only the present budget of the government, the prime aim of all government of India and states should be providing e*ual right of living and education of the citi4ens' "ntil all the citi4ens of India feel they are e*ually responsible for building the nation, any number of budgets cannot bring the nation in to progress' )he price hi e can be due to the loss of value of the money' )he !ages of a farm !or er is increased to meet his daily expenses' )his is a valued reason for hi ing the price of foodstuff' 9ovt' is giving subsidies to help the farm sector and or the !ea sectors' (ut until an individual is made capable of thin free and act free the nation cannot progress the !ay !e are expecting' 0o the prime importance on this budget should be right of education and right of living Pradee% sales and service &ngineer, 'rim line Medical system AIndia1s bac bone is Agriculture A this sentence is seen in geography boo no!adays, our 9overnment doesn1t ta e it as serious issue '(oom of 5eal @state is nothing but appearance of hify multi2storey building !ith disappearance of Agriculture land and in presence of suicide of farmers' Proper management of agriculture land !ould be one of the solution in addition I have personal idea that ;hy government can ta e the agriculture land from Farmers for lease !here govt can pay constant salary to farmers, so the farmers can !or in their o!n land and all expenses for grains and manures !ill be ta en care by govt '0o the entire yield from the land !ould be directly ta en by Food /orporation of India' If loss occur 9ovt !ould bare that, itIs far better than canceling Agriculture Coan fully (-$$$ /r) during @lection by politicians' Its huge Coss ')his Idea is difficult to implement in practical but it should be initiative' =ur Indian 0cientist 0hould is given more funds for 5F6 in Agriculture 0ector' )hen Preserving )echni*ues of Food items as to be developed by 9ovt' )ransportation for Food items should be regulari4ed' )hese things are possible only !hen corruption dies from all and if !e thin our future generation should be good '0ure everything !ill go in right !ay'

0d1E78ECTATION' O9 COMMON MAN

'axes(

)he common men and the corporates are loo ing for decrease in taxes' )he Finance Minister is li ely to augment exemption limit of individual taxes to 5s < la h from 5s%'&$ la h for salaried people' @xemption limit for !omen is expected to be increased from %'7$ la h to : la h and for senior citi4en from 5s # la h to - la h' +o!ever, taxes levied on the per s availed by income earners are expected to be restructured on higher level' )his arrangement may satisfy junior employees and senior citi4ens' (ut, it may not go !ell !ith the people belonging to higher position' Cor%orate 'ax( A reduction of <$. is expected in the corporate tax' )he expectation is found in line !ith the introduction of 6irect )ax /ode (6)/) suggesting a #-. rate' )he individual rate !as lo!ered by <$. previous year also' Ca%ital $ains 'ax( As far as the #$%$ India (udget expectation in the area of capital gain tax is concerned, finance minister is unli ely to bring any reform in this category of tax' It is predicted to be included under the 6irect )ax /ode, to be implemented from April #$%%' !e)fixing of 'ax Slabs( As mentioned earlier, the tax slab for !omen is expected to be revised to : la h and senior citi4ens to 5s - la h' +o!ever, second and third slabs of tax !ould see significant change' )he second tax slab is expected to be augmented from the existing 5s < la h to 5s % million to be taxed at #$.' )he third slab is li ely to be increased from 5s - la h to 5s #- la h to be taxed at the rate of <$.' )hese revisions !ould act in favor of the reputed advocates as !ell as the doctors' Gratuity .imit/ )he India (udget #$%$ expectations sho! that significant revision in gratuity limit is also considered' )he gratuity limit of the income class is expected to be raised to 5s%$ la h in the budget #$%$ from 5s <'- la h' (oth the upper as !ell as middle level executives !ill benefit a lot, if this revision is brought into effect' @mployees are paid gratuities in the government as !ell as corporate organi4ations during the time of their retirement' )he amount that is dished out as gratuity falls outside the tax regime' If the gratuity limit is enhanced, the employees !ill surely benefit from it' Sel" ssessment Slab/

)he self assessment slab for businessmen and professionals is 5s :$ la h at present' According to expectations, the slab may be revised to 5s % crore to lo!er the burden felt by the business people and professionals' Stimulus/ India (udget #$%$ speculations suggest that it is not the right time for the government to roll bac stimulus pac ages, despite the fact that 96P gro!th of the nation in the J# (Duly K 0eptember) of the current fiscal stood at ?'8.' +o!ever, experts believe that government !ould !ithdra! fe! of the subsidies from the mar et' )he oil companies !ere aided !ith the stimulus pac age to chec loss' 9overnment did not allo! the =il companies to raise product costs of erosene and diesel, !hich !ould have forced the common men to pay more' As high prices of diesel and petrol !ould bear adverse effect on the transport rates of food products, the stimulus pac ages are expected to continue in the oil industry' +o!ever, partial !ithdra!al of the stimulus aid can be expected in this sector to tac le the situation of increasing fiscal deficit' Bevertheless, stimulus pac ages from engineering as !ell as export sectors are expected to be rolled bac '

griculture Sector/ According to India (udget #$%$ expectations, the agriculture sector !ould be the highlight of the session' )his sector is li ely to receive enormous boost from the government' Finance ministerIs invitation to the farmers for the pre2budget meet is held to be the main reason behind such speculation'

In"rastructure and Social Sector/ Infrastructure industry is also expected to be the focus of the budget results of #$%$' Many believe that development in this sector !ould account for massive gro!th in 96P' +o!ever, it is unli ely to ease monetary policy to better infrastructure' Interest rate cannot be reduced as !ell' #ail0ays/

According to #$%$ budget speculations, the transportation charges for bul commodities in rail!ay industry are li ely to be increased' )he turnaround in the economic conditions of India is expected to boost the transport costs of cement, coal, iron ore and steel' Previous year, the Ministry of 5ail!ay refrained from raising transportation costs to help sector tac le the scenario of global meltdo!n' )he ministry has not come up !ith its plan for hi es yet' (ut, the range can be fixed some!here bet!een - and %$.' If this becomes effective, one !ould need to pay 5s' %$$ to #$$ per tonne' 'ther Sectors/ ;hile ta ing into account the India (udget #$%$ expectations of various sectors, it !as found that the garment industry of India is loo ing for considerable cut in interest rates in its exports segment' )he garment exporters also !ant the ministry to remove all the confusion faced in the case of excise as !ell as custom duties' )he sector !ants major commercial as !ell as fiscal relief' 0imilarly, the Indian tea industry is expecting to get an allocation of more than 5s %<$ crore, !hich !as granted in the fiscal year #$$82%$'

Some o" the scenario o" the common man "rom the Union Budget 2010/
11 Income ta2 slab must be raised to #s1 2,30,000 "or individual males1 For "emales the limit 0ill be suppose to #s1 4,00,000 and "or senior citi5ens it should be increased "rom #s1 2,60,000 to #s1 4,30,0001 21 %o encourage saving o" common man the deduction limit o" u7s 809 should be increased "rom 1,00,0007: to 2,30,0007:1 41 ;edical e2penses ta2 "ree limit o" #s1 13,000 should be increased as increasing health care cost in medical sector1

61 %ransport allo0ance is allo0ed upto #s1800 per month "or travelling "rom home to o""ice and bac<1 %his should be increased to #s12,300 per month1 31 Interest paid "or $ousing .oan under Sec 26 is #s1 1,30,000 at present to #s1 2,30,000 1 =1 Senior citi5ens are considered people aged above =3 years1 %his should be reduced to =0 years1 %he age "actor to determine senior citi5ens discrepancy should be eliminated1

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