The Union Budget for 2013-14 aimed to boost growth while resisting populist measures. It increased taxes on luxuries like SUVs, imported cars and motorcycles. Income tax rates remained unchanged, but a tax credit of Rs. 2,000 was provided for incomes below Rs. 5 lakh. Higher allocation was provided for infrastructure, agriculture, rural development, health, education and social sectors. The fiscal deficit target was set at 4.8% of GDP.

1. UNION BUDGET 2013-14

3. • The Finance Minister (FM) delivered a carefully crafted
budget on Thursday, 28th
Feb, 2013 that sought growth.
• Resisted the temptation to be populist ahead of looming
state and general elections.

4. • Presented under the shadow of major challenges facing
the Indian economy like slowdown in growth, high
inflationary trends, ever increasing fiscal deficit, low
saving/investment and looming threat of low credit rating.
• The FM must be accredited
to present a bold budget even
when elections are about an
year or so away.

5. Highlights
• No changes in income tax
rates or slabs.
• Tax credit of Rs. 2,000 for income
up to Rs. 5 lakh.
• Surcharge of 10 per cent for taxable incomes above Rs.
1 crore, to augment revenue.
• 5 to 10 per cent surcharge on domestic companies
whose taxable income exceeds Rs 10 crore.

6. • For foreign companies, the surcharge will increase from
2 per cent to 5 per cent.
• An additional tax break of 1 lakh on
interest payment apart from the
current 1.5 lakh on a housing loan
of less than 25 lakh.
• Rate of abatement on homes and
flats of above 2,000 square feet,
or costing Rs 1 crore and above,
being reduced from 75% to 70%.

7. • Excise duty on non-taxi SUVs to be increased to 30 per
cent from 27 per cent.
• Custom duty on imported luxury cars has been raised to
100% from 75% now.
• Custom duty on imported motorcycles with engine
capacity of more than 800cc also goes up to 75% from
60% at present.

8. • Custom duty on raw silk has been increased by 10%.
• Zero excise duty on cotton and yarn at the garment
stage.
• Custom duty on precious
and semi-precious stones
has been cut from 10 to 2%.

9. • Gold import duty unchanged.
• Duty free gold limit increased
to Rs. 50,000 for a male
passenger and Rs. 1,00,000 for a female passenger
subject to conditions.
• Rise on excise duty from the current 1% to 6% on mobile
phones costing more than Rs 2,000.

10. • Excise duty on marbles has been doubled to Rs 60 per
square meter.
• Home furnishing items such as handmade carpets or
coir and jutes will be exempted form excise duty.
• Custom duty on imported set-top boxes, or STBs, has
been raised by 5%.
• Excise duty raised by 2% to 18% in excise duty on
cigarettes and cigars.

11. • Service tax on all A/C restaurants.
• Exemption of Service Tax on copyright on
cinematography limited to films exhibited in cinema halls.

12. SC, ST, Women and Children
• Rs 41,561 crore for SC Sub Plan and Rs 24,598 crore
for Tribal Plan.
• 97,134 crore allocated for programmes relating to
women and 77,236 crore allocated for programmes
relating to children.
• An additional sum of Rs 200 crore proposed to be
provided to the Ministry of Women and Child
Development to address the concerns of vulnerable
groups, including single women and widows.

14. Minority
• An allocation of Rs 3511 crore to Ministry of Minority
Affairs, an increase of 12 per cent over the BE and 60
per cent over the RE of 2012-13.
Disabled
• A sum of 110 crore to the Department of Disability
Affairs for ADIP scheme in 2013-14 against RE 2012-
13 of ` 75 crore.
• Eligibility cap on life insurance premiums raised to
15% for policyholders with disabilities or specified
ailments.

15. Health and Education
• 37,330 crore allocated to the
Ministry of Health & Family
Welfare.
• 4,727 crore for medical education, training and research.
• Ayurveda, Unani, Siddha and Homoeopathy are being
mainstreamed, 169 crore allocated.
• Allocation of 1,069 crore to Department of AYUSH.

16. ICDS
• Allocation of 17,700 crore in 2013-14, an increase of
11.7 percent. The focus will continue to be on early
childhood care and education.
• Allocation of 300 crore in 2013-14 for a multi-sectoral
programme aimed at overcoming maternal and child
malnutrition. To be implemented in 100 districts during
2013-14 and in 200 districts the year after.

17. Drinking Water
• 15,260 crore allocated to Ministry of Drinking Water and
Sanitation.
• 1,400 crore provided for setting-up of water purification
plants in 2000 arsenic-affected and 12000 fluoride-
affected rural habitations.

18. JNNURM
• Rs 14,873 crore for JNNURM for urban transportation in
2013-14 against Rs 7,880 crore in the current fiscal.

19. Agriculture
• 27,049 crore allocated to Ministry of Agriculture, an
increase of 22 per cent over the RE of current year.
• Agricultural credit kept at 7 lakh crore for 2013-14
compared to Rs 5.75 lakh crore in the current year.
• Eastern Indian states to get
Rs 1,000 crore allocation for
improving agricultural
production.

20. • 500 crore allocated to start a
programme of crop diversification.
• A provision of 307 crore made
for the National Livestock Mission.
• Additional provision of Rs. 10,000 crore for National
Food Security Act.

21. Investment
• Income limit for the tax-saving Rajiv Gandhi Equity
Savings Scheme is raised to Rs. 12 lakh from Rs. 10
lakh.
• Additional deduction of interest up to Rs. 1 lakh for a
person taking first home loan up to Rs. 25 lakh during
the period 1.4.2013 to 31.3.2014.

22. Infrastructure
• Infrastructure tax-free bond of Rs. 50,000 crore.
• 3000 km of road projects in Gujarat,
Madhya Pradesh, Maharashtra,
Rajasthan and Uttar in the first 6
months.
• Companies investing Rs. 100 crore or more in plant and
machinery during the period 1.4.2013 to 31.3.2015 will
be entitled to deduct an investment allowance of 15 per
cent of the investment.

23. Industry
• Two new major ports will be established in Sagar, West
Bengal and in Andhra Pradesh to add 100 million tonnes
of capacity.
• Technology Upgradation Fund Scheme (TUFS) for
textile to continue in 12th Plan with an investment target
of Rs. 1,51,000 crore.

24. • Proposal to move from the present profit sharing
mechanism to revenue sharing for oil and gas
exploration.
• Adoption of a policy of pooled pricing for coal.

25. Finance
• Rs. 14,000 crore will be provided to public sector banks
for capital infusion in 2013-14.
• All branches of public sector banks to have ATM by
31.3.2014.
• Proposal to set up India’s first Women’s Bank as a public
sector bank. Provision of Rs. 1,000 crore as initial
working capital.
• Insurance companies can now open branches in Tier 2
cities and below without prior approval.

26. • All towns of India with a population of 10000 or more will
have an LIC branch and one other public sector
insurance company.
• SEBI will simplify the procedures and prescribe uniform
registration and other norms for entry for foreign portfolio
investors.
• Investor has a stake of 10 per cent or less in a company
- treated as FII. Investor has a stake of more than 10 per
cent - treated as FDI.
• SMEs, permitted to list on the SME exchange without
being required to make an IPO.

27. Others
• A grant of Rs. 100 crore to 4 institutions of excellence
viz. AMU, BHU, TISS Guwahati and INTACH.
• All cities of population of more than 1,00,000 will be
covered by private FM radio services.
• Provision of Rs. 4,909 crore to modernize the postal
network. Post offices to become part of the core banking
solution and offer real time banking services.

28. Estimates
• Plan expenditure - Rs. 5,55,322 crore.
• Non Plan Expenditure - Rs. 11,09,975 crore.
• Fiscal deficit - 4.8 per cent.
• Revenue deficit - 3.3 per cent.
• Revenue of 133 billion rupees through direct tax
proposals and 47 billion rupees through indirect tax
proposals.

29. • Gross market borrowing - Rs. 6.29 trillion
• Net market borrowing - Rs. 4.84 trillion
• Short-term borrowing - Rs. 198.44 billion
• Major subsidies bill - Rs. 2.48 trillion
• Petroleum subsidy - Rs. 650 billion
• Food subsidies - Rs. 900 billion

30. Implications
• Reason to cheer for first time home buyers.
• Boost to the real estate and allied sectors.
• Reason to be sad for car and motorcycle buyers.
• Not so good news for the super rich.
• Small relief for taxpayers.
• Tax savings of aggregate Rs 3,600 crore approximately
to 1.8 crore tax payers should be generated.

31. • Investment in RGESS made more attractive. It would
encourage channelizing the savings of small taxpayers
into the capital market.
• Reason to be sad for those planning to purchase SUVs
as well as for cigarette and cigar users.
• Women empowerment and safety.

32. • Good news for gold buyers.
• Analysts said the FM has quietly
ensured that India's finances are
in shape and the economy gets
back on track. The markets may have been unimpressed
by the budget, but the “aam aadmi” walked out with a
better deal.

33. • For an average Indian household, the impact of the
budget is fairly neutral. It remains to see how many of
these proposals actually convert into legislation and,
thereafter, achieve their desired objective of enhancing
growth development.
• The budget’s impact is not going to show very soon but
are chance of proving quite fruitful in the later periods.