Budget Highlights 2010

The finance minister on Monday outlined plans to speed infrastructure development and unveiled increased spending for farmers and the poor in the first budget since the Congress-led government was re-elected convincingly in May.

Following are the highlights from the budget speech: "The first challenge is to return the GDP growth rate of 9 percent per annum at the earliest."

"The second challenge is to deepen and broaden the agenda for inclusive development." "There are signs of revival in domestic industry and foreign investors have also returned to Indian markets in the last couple of months."

"It is possible that the two worst quarters since the global financial meltdown in September 2008 are behind us."

"While the global financial condition has shown improvement over the recent month, uncertainty relating to the revival of the global economy remains. We cannot, therefore, afford to drop our guard. "We have to continue our efforts to provide further stimulus to the economy."

2008/09 GDP growth seen at 6.7 pct To Plans return to fiscal responsibility reforms to targets control "at the fiscal earliest" deficit

institutional

"It is important to recognise that almost three quarters of our oil consumption makes through imports. Domestic prices of petrol and diesel have to be brought in sync with the global prices of these items."

"Governnment will set up an expert group to advise for a viable and sustainable system of pricing petroleum products.

"The public sector undertakings are the wealth of the nation and part of this wealth should rest in the hands of the people."

"While retaining at least 51 percent government equity in our enterprises, I propose to encourage a people's participation in our disinvestment programme."

"Here I must state clearly that public sector enterprises such as banks and insurance companies will remain in the public sector and will be given all support including capital infusion to grow and remain To create an environment for private competitive." investment

To raise in a phased manner the limit for non-founder holdings in all companies To Have ensure asked more states flexibility to to India Infrastructure on Finance infrastructure Co Ltd

remove

bottlenecks

projects

Allocates 5 bln rupees ($104 million) for Mumbai flood project Liquefied natural gas infrastructure to be expanded To To raise raise allocation allocation for for urban National poor credit Highways schemes of to development 39.73 3.25 billion by rupees trillion 23 in percent 2009/10 rupees

Targeting

agriculture

To pay additional interest subvention of 1 percent to farmers who pay short-term farm loans on schedule To provide additional 10 billion rupees over interim budget for irrigation To Plans extend to move agriculture towards debt nutrient-based waiver subsidy by regime 6 for months fertilisers

To offer direct subsidy to farmers To To extend give interest relief subvention to to exporters hit in by 7 sectors global till March 2010 crisis

exporters

financial

To To

allocate set aside

40 1

billion billion

rupees rupees

to for

encourage banking

lending services in

to

small

firms areas

unbanked

To allocate of 391 billion rupees for rural jobs programme in 2009/10 , 144 percent more than in 2008/09 To raise allocation for rural roads scheme by 59 pct in 2009/10 To To To raise allocation 70 billion to Bharat billion rupees Nirman rupees for rural infrastructure for housing rural under programme by 45 percent scheme Bank

allocate allocate 20

electrification National Housing

To set up 2 handloom clusters, 1 power loom cluster

Small Scale Industrial Undertakings

The following requirements are to be complied with by an industrial undertaking to be graded as Small Scale Industrial undertaking w.e.f. 21.12.1999

An industrial undertaking in which the investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million. (Subject to the condition that the unit is not owned, controlled or subsidiary of any other industrial undertaking)

(Subject to the condition that the unit is not owned, controlled or subsidiary of any other industrial undertaking) Explanation: For the purpose of this note:-

a.

"owned" shall have the meaning as derived from the definition of the expression "owner" specified in clause (1) of section 3 of the said Act;

b.

"subsidiary" shall have the same meaning as in clause (47) of section 2, read with section 4, of the Companies Act, 1956 (1 of 1956);

c. i.

the expression "controlled by any other industrial undertaking" means as under:where two or more industrial undertakings are set up by the same person as a proprietor, each of such industrial undertakings shall be considered to be controlled by the other industrial undetaking or undertakings,

ii.

where two or more industrial undertakings are set up as partnership firms under the Indian Partnership Act, 1932 (1 of 1932) and one or more partners are common partner or partners in such firms, each such undertaking shall be considered to be controlled by other undertaking or undertakings,

iii.

where industrial undertakings are set up by companies under the Companies Act, 1956 (1 of 1956), an industrial undertaking shall be considered to be controlled by other industrial undertaking if:-

a. b.

the equity holding by other industrial undertaking in it exceeds twenty four percent of its total equity; or the management control of an undertaking is passed on to the other industrial undertaking by way of the Managing Director of the first mentioned undertaking being also the Managing Director or Director in the other industrial undertaking or the majority of Directors on the Board of the first mentioned undertaking being the equity holders in the other industrial undertaking in terms of the provisions of the following items (a) and (b) of sub-clause (iv);

(iv) the extent of equity participation by other industrial undertaking or undertakings in the undertaking as per subclause (iii) above shall be worked out as follows:-

a.
b.

the equity participation by other industrial undertaking shall include both foreign and domestic equity; equity participation by other industrial undertaking shall mean total equity held in an industrial undertaking by other industrial undertaking or undertakings, whether small scale or otherwise, put together as well as the equity held by persons who are Directors in any other industrial undertaking or undertakings even if the person concerned is a Director in other Industrial Undertaking or Undertakings;

c.

equity held by a person, having special technical qualification and experience, appointed as a Director in a small scale industrial undertaking, to the extent of qualification shares, if so provided in the Articles of Association, shall not be counted in computing the equity held by other industrial undertaking or undertakings even if the person concerned is a Director in other industrial undertakings or undertakings;

(v) where an industrial undertaking is a subsidiary of, or is owned or controlled by, any other industrial undertaking or undertakings in terms of sub-clauses (i); (ii); or (iii) and if the total investment in fixed assets in plant and machinery of the first mentioned industrial undertaking and the other industrial undertaking or undertakings clubbed together exceeds the limit of investment specified in paragraphs (1) or (2) of this notification as the case may be, none of these industrial undertakings shall be considered to be a small scale or ancillary industrial undertaking. Note 2(a) In calculating the value of plant and machinery for the purposes of paragraphs (1) and (2) of this notification, the original price thereof, irrespective of whether the plant and machinery are new or second hand, shall be taken into account. (b) In calculating the value of plant and machinery, the following shall be excluded, namely:-

i.

the cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores;

ii. iii. iv.

the cost of installation of plant and machinery; the cost of research and development equipment and pollution control equipment; the cost of generation sets and extra transformer installed by the undertaking as per the regulations of the State Electricity Board;

v.

the bank charges and service charges paid to the National Small Industries Corporation or the State Small Industries Corporation;

vi.

the cost involved in procurement or installation of cables, wiring, bus bars, electrical control panels (not those mounted on individual machines), oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the plant and machinery or for safety measures;

vii. viii.

the cost of gas producer plants; transportation charges (excluding of sales tax and excise) for indigenous machinery from the place of manufacturing to the site of the factory;

ix. x.

charges paid for technical know how for erection of plant and machinery; cost of such storage tanks which store raw materials, finished products only and are not linked with the manufacturing process; and

xi.

cost of fire fighting equipments.

(c) In the case of imported machinery, the following shall be included in calculating the value, namely:-

i.

import duty (excluding miscellaneous expenses as transportation from the port to the site of the factory, demurrage paid at the port);

ii. iii. iv.

the shipping charges; customs clearance charges; and sales tax.

Every industrial undertaking which has been issued a certificate of registration under section 10 of the said Act or a license under sections 11, 11A and 13 of the said Act by the Central Government and are covered by the provisions of paragraphs (1) and (2) above relating to the ancillary or small scale industrial undertaking, may be registered, at the discretion of the owner, as such, within a period of one hundred and eighty days from the date of publication of this notification in the Official Gazette. Ancillary Industrial Undertakings

The following requirements are to be complied with by an industrial undertaking for being regarded as ancillary industrial undertaking: -

An industrial undertaking which is engaged or is proposed to be engaged in the manufacture or production of parts, components, sub-assemblies, tooling or intermediates, or the rendering of services and the undertaking supplies or renders or proposes to supply or render not less than 50 per cent of its production or services, as the case may be, to one or more other industrial undertakings and whose investment in fixed assets in plant and machinery whether held on ownership terms or on lease or on hire-purchase, does not exceed Rs 10 million. Tiny Enterprises Investment limit in plant and machinery in respect of tiny enterprises is Rs 2.5 million irrespective of location of the unit. Women Entrepreneurs A Small Scale Industrial Unit/ Industry related service or business enterprise, managed by one or more women entrepreneurs in proprietary concerns, or in which she/ they individually or jointly have a share capital of not less than 51% as Partners/ Shareholders/ Directors of Private Limits Company/ Members of Cooperative Society.

NEW DELHI: Highlights of 2010-11 budget presented by Finance Minister Pranab Mukherjee in parliament Friday: -- Clean energy cess of Rs.50 per tonne on coal produced in India -- Concessional duty of 4 percent for solar power rickshaw developed by Council of Scientific and Industrial Research -- Concessional customs duty of 5 percent for cable TV operators for importing equipment -- Toys fully exempt from central excise duty -- Service sector tax retained at 10 percent to aid the introduction of GST; more services to be taxed -- Accredited news agencies exempt from service tax -- Net revenue gain Rs.22,500 crore -- Taxes on large cars and SUVs increased 2 percent to 22 percent -- Basic duty of 5 percent on crude oil restored

-- Tax on cigarettes, cigars and chewing tobacco increased -- Rs. 26,000 crore revenue loss due to reduction of direct taxes -- Partial roll back of reduction in central excise duty -- Income up to Rs.1.6 lakh per year exempt from income tax; up to Rs.5 lakh to be taxed at 10 percent; income of Rs.5-8 lakh to be taxed at 20 percent and income above Rs.8 lakh to be taxed at 30 percent -- IT returns forms for individual tax payers to be further simplified -- Expenditure in 2010-11 estimated at 11,l8,749 crore -- Fiscal deficit estimated at 5.5 percent in 2010-11; an improvement of 1 percent over 2009-10 -- Two more centralised tax processing centres to be set up in addition to the one at Bangalore -- National Social Security Fund created for workers in unorganised sector with allocation of Rs.1,000 crore -- Government to give Rs.1,000 for each National Pension Scheme account opened by workers in the unorganised sector -- Exclusive skill development programme for the textile sector -- Fifty percent hike in allocation for schemes for women and child development -- Rs.4,500 crore allocated for ministry of social justice and empowerment, a hike of 80 percent -- Rs.2,600 crore allocated for ministry of minorities affairs

-- Rs.1,900 crore for Unique Identification Authority of India -- Rs.147,344 crore allocated for defence -- 2,000 youth to be recruited in central paramilitary forces -- Draft Food Security Bill prepared and will be put in the public domain -- Allocation on primary education raised from Rs.26,800 crore to Rs.31,300 crore -- Banking facilities to be provided to all habitations with a population of 2,000 and more -- Rs.66,100 crore allocated for rural development in 2010-11; Rs.40,100 crore for National Rural Employment Scheme; RS.48,000 crore for Bharat Nirman -- Rs.1,270 crore allocated for Rajiv Awas Yojana for slum dwellers, up from Rs.150 crore, an increase of 700 percent with the aim of creating a slum free India. -- Forty-six percent of plan allocations in 2010-11 will be for infrastructure development -- Coal Regulatory Authority to be set up to benchmark standards of performance -- Allocation for new and renewable energy sector increased 61 percent from Rs.620 crore to Rs.1,000 crore in 2010-11 -- National Clean Energy Fund to be established -- Rs.200 crore allocated as special package for Goa to prevent erosion and increase green cover

-- Government committed to growth of SEZs -- Four-pronged strategy for growth of agricultural sector -- Rs.200 crore to be provided in 2010-11 for climate-resilient agricultural initiative -- Involvement of private sector in grain storage to continue for another two years -- In view of drought and floods, debt repayment period extended to June 2010 -- Five more mega food processing projects in addition to 10 existing ones -- FDI flows in April-December 2009 $20.9 billion -- FDI policy to be made more user-friendly with one comprehensive document -- Apex level financial stability council to be set up for banking sector -- Indian Banking Association to give additional licences to private players -- Provision for further capital for regional rural banks -- Roadmap for reducing public debt in six months -- Implementation of direct tax code from April 2011 -- Government actively engaged in finalising structure of general sales tax regime; hopes to implement it from April 2011 -- New fertiliser policy from April 2010; will lead to improved productively and more income for farmers

-- Economy stabilised in first quarter of 2009-10; strong rebound in second quarter; overall growth at 7.2 and could be higher when Q3 and Q4 are taken into account -- Export figures for January encouraging -- Hope to breach 10 percent growth mark in not too distant future -- Government set in motion steps to bring down food inflation -- Need to review stimulus package; need to make growth more broad-based -- India has weathered global economic crisis well; Indian economy in far better position than it was a year ago. In 2009 Indian economy faced grave uncertainty; delay in southwest monsoon had undermined agricultural production -- First challenge now is to quickly revert to 9 percent growth and then aim for double digit growth; need to make recovery more broadbased -- Second challenge is to make growth more inclusive; have to strengthen food security -- Third challenge is to overcome weakness in government's public delivery mechanism; a long way to go in this Read more: Budget highlights - Union Budget 2010 - Home - The Times of India http://timesofindia.indiatimes.com/home/union-budget-2010/Budgethighlights-/articleshow/5618600.cms#ixzz0x9UdYvl7