Overview of Indian Buget

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2. Budget 2013

3. Background
• Low growth of economy 5%/5.5%
• Weak Current Account
• Inflation
• Growing fiscal deficit – Now 5.2/ projected 4.8
• Tight monetary policy
• High Govt. borrowing
• Looming downgrading by rating agencies

4. INDIA’S GROWTH RATE

5. INDIA’S CURRENT ACCOUNT

6. INDIA’S INFLATION RATE

7. Revenue numbers
Actual
2011-12
(Rs. in cr.)
Revised
2012-13
(Rs. in cr.)
Increase
2013-14 Increase
(Rs. in cr.)
Corp. Tax
322,816
358,874
11%
419,520
17%
Other IT
164,485
199,930
21%
240,919
25%
Customs
149,327
164,853
10%
187,308
15%
Excise
144,900
171,315
19%
198,805
18%
97,509
132,697
36%
180,141
37%
Service tax

8. Other critical numbers
Budget
Revised
2012-13
2012-13
(Rs. in cr.) (Rs. in cr.)
Increase
Underspent (-) /
overspent (+)
(Rs. in cr.)
2013-14
(Rs. in cr.)
Increase
- Revenue
426,513
343,373
443,260
- Capital
100,512
85,814
112,062
Total Plan Expenditure
521,025
429,187
-18%
- 91,838
555,322
29%
Subsidy
190,015
257,654
36%
67,639
231,084
10%
Petroleum subsidy
43,560
96,880
123%
53,500
Health & welfare
30,477
24,894
-18%
-5,583
32,745
32%
Human Resources
61,427
56,223
-9%
-5,204
65,869
17%
Rural development
76,376
55,000
-29%
-21,376
80,194
46%

9. Measures for growth of economy/investment
• Investment allowance - 15% on Plant & machinery
installed exceeding Rs. 100 crores between 1.4.13 to
31.3.15
• Attempt to discourage investment into Gold/real estate
• Tax free Bonds
• Inflation – indexed bonds
• High infrastructure spending 7-1-1 of GDP

10. Measures for growth of economy/investment
• Plan expenditure – Rs. 5.5 lac crore
-
Growth of 29.4%
• New industrial corridors of Mumbai-Bengaluru + Bengaluru-Chennai
proposed
• High rural spending : Rs. 80,194 Cr.
• Regulatory authority for road sector
• Coal addressed
• Mass Housing : Rs. 1 lac additional deduction for first time buyer - cost
limit of Rs. 40 lacs / Loan Rs. 25 lacs
• Agricultural - Rs. 27049 Cr.
• Agricultural credit - Rs. 7 lacs Cr.

11. Sources
•
Surcharge at 10% on incomes above Rs. 1 crore - Total numbers.
42800
•
Commodity Transaction tax
•
S. C. on Corporate rates up from 5% to 10% on taxable incomes above
Rs. 10 crores
•
Higher service tax on residential units above Rs. 1 crore or more than
2000 Sq. ft.
•
Dining in AC Restaurants liable to Service-tax
•
Divestment: Rs.
•
Telecom sector: Rs. 41000 Cr.
•
Dividends/profits: Rs. 44000 Cr.
•
Plugging loopholes
54000 Cr.

12. Containing fiscal deficit
• Expectation of high tax buoyancy and high
growth
• Reduction in subsidy 2.6% of GPD to 2% of GDP
• Expectations are that Capex is not compromised
as was done this year

13. Plugging loopholes
43CA:
• 50C applicable on transfer of immovable property as held as
stock-in-trade
Property related:
• 1% tax deduction on transfer of immovable property exceeding
Rs. 50 lacs
• Tax on property purchased for inadequate consideration( less
than stamp authority rate) – Rs. 50,000 diff. permitted
• “Tax due to” include penalty and interest

14. Education / health
• Swasthya Bim Yojana extended to rixa-pullers,auto & taxi
drivers, sanitary workers
• Drinking water
• Sarva Shiksha Abhiyan
Giveaways
• Reduction in S. T. T.
• Tiny dot of Rs. 2000 to persons with incomes upto Rs. 5
lacs

15. Other provisions
• Improving savings rate and investment in financial savings
• Insurance
• Fl permitted to invest in currency futures
• Gold investment discouraged
• Garbage to energy
• Wind energy
• Skill development - Rs. 5 crore
• Service tax Amnesty Scheme
• 17 lac registration; 7 lac file returns

16. Other provisions
• G. S. T.
• D. T. code
• More required to encourage investment like
– Cutting red tape
– Expediting clearances
– Improving Governance
• GAAR continued to be deferred

17. Main Constants of the Indian Economy at present
• High Fiscal deficit.
• Reliance on foreign inflows.
• Lower savings and lower investment.

18. Reasons for current account weakness
• Excessive dependence on oil imports.
• High volumes of coal imports.
• Our passion for gold.
• Slow down in exports.
That’s why we need more FDI, FII and ECB.

19. Agriculture
• 3.6% annual growth achieved during 11th plan.
 Total food grains production during 2012-13
estimated at 250 million tones.
 Minimum support price increased significantly.
 Agriculture exports from April-December’12 at Rs.
138403 crores.
 Agriculture credit target of Rs. 575000 crores for
2012-13 and Rs. 700000 crores for 2013-14.
 Provision for agriculture research Rs. 3415 crores.

20. Investment Infrastructure & Industry
• 12th plan projects an investment of Rs. 5500000 crores
in infrastructure.
• Private sector to share 47% of this.
• Ports-two major ports one in West Bengal and other in
Andhra Pradesh.
• National waterways.

21. Suggested Tips
• The coal rates are going to increase by 2020 -2035. Focus
on Solar Power Plant.
• Fiscal Deficit- When a government's total expenditures
exceed the revenue that it generates (excluding money
from borrowings). Deficit differs from debt, which is an
accumulation of yearly deficits.
• Rather making ECONOMIC strong we are making the TAX
strong.

22. Thank You !
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