Evolution of Union Budget

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View the presentation to understand the evolution in the composition of the budget with respect to taxes & expenditure. For more details on the Budget head to: http://bit.ly/WHTKfT

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  • Understand the evolution of our union budget over a period of time with various stats and facts. Kotak Securities also provide you various <a href="http://www.kotaksecurities.com/stock-market-news/equity/1000/equity-market/NSE/ALL/ALL">share market news/updates & happening.To stay updated with our upcoming budget 2013-14 news and analysis <a href="http://www.kotaksecurities.com/budget2013-14/India-union-budget-2013-14.htm">click here</a>
  • Evolution of Union Budget

    1. 1. Evolution of Union Budget
    2. 2. Pre 1991 Budgets INDIA’S FISCAL POLICY • Emphasis on public sector expansion for economic growth and industrial development • Fiscal policy focused on transfer private savings to cater to the growing consumption and investment needs • Reduction of income and wealth inequalities via taxes •High administrative controls • Licensing and quota system for private sector
    3. 3. Revenue Strategy
    4. 4. Direct and indirect taxes were focused on revenue from private sector • 1950-51: Indirect taxes at 2.3% of GDP • 1950-51: Direct taxes at 1.8% of GDP
    5. 5. Post 1991: Economic Liberalization INDIA’S FISCAL POLICY • India opened economy to foreign investment and trade • Private sector was encouraged • Quotas and licenses were abolished
    6. 6. Tax reform: Direct 1992-93: Personal income tax brackets reduced to 3at of 20%, 30% and 40% 1993-94: Distinction between closely and widely held companies removed. Uniform ` corporate tax rate brought down to 40% 1996-97: Minimum Alternative Tax or MAT was introduced. MAT required a company to pay a minimum of 30% of profits as tax 1997-98 :Personal income tax brackets reduced further to10%, 20%, and 30%. Uniform corporate tax reduced to 35% with 10% tax on distributed dividends 2004-05: STT or Securities Transaction Tax was introduced 2005-06: Fringe benefit tax or FBT was brought in
    7. 7. Tax reform: Indirect 1994: 95: Service tax was introduced and its net kept expanding 1996-97: MODVAT was expanded to cover most commodities 1997-98: Peak custom duty rate was brought down to 40% 1999-2000: Eleven rates were merged into three with a few luxury items subject to additional non-rebatable tax 2000-01: The three rates were merged in to a single rate and renamed as central VAT or CENVAT. Three additional excise duties at 8%, 16%, 24%were kept. 2002-03: Peak customs duty cut to 30% 2004-05: Peak customs duty cut by 5% to 25% 2005-06: Peak customs duty saw a 10% cut from 25% to 15%
    8. 8. Tax Reform
    9. 9. POST 1991: EXPENDITURE STRATEGY • Focus on reducing subsidies and cutting down on non-capital expenditure. • Composition of government expenditure takes time to have effect • 2003: FRBMA was adopted. • FRBM Act gave target for balancing current revenues and expenditures • FRBM Act set overall limits to the fiscal deficit at 3% of GDP to be achieved in phases • FRBM Act enhanced budgetary transparency • Fiscal prudence limiting public debt via higher revenue and controlled expenditure has been institutionalized • Expenditure reforms aim to target reduction of subsidies
    10. 10. Expenditure Strategy
    11. 11. Budget Simplified Facebook Website Twitter
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