NEW DELHI: Railway minister Mamata Banerjees decision to leave tariffs unchanged for the next year

brought smiles to the faces of commuters and companies, but raised questions about how she can find the money to fund the sprucing up of a 157year-old rail network which is bursting at the seams. With her sights set on Kolkatas Writers Building, Ms Banerjees Rail Budget saw her dole out goodies to her home state, announcing the setting up of new factories in West Bengal and routing many of 54 new trains through the state. Aware of the limitations of the Railways in raising money on its own, she rolled out the red carpet for private businessmen, urging them to participate as partners in key projects. The mercurial leader, who forced Tata Motors to abandon plans to build the worlds cheapest car Nano at Singur in her home state, stuck to her position that there would be no land acquisition from unwilling persons, even if it means that project plans have to be changed. Should commercial viability be the only criterion to judge this need of connectivity? Or, should social responsibility be an important consideration? I prefer the latter, Ms Banerjee said. Our objective is inclusive growth. If we cannot include all in the ambit of our growth process, then growth will remain just a statistical expression. We do not want that type of growth. Prime Minister Manmohan Singhs government is treading a careful path, balancing bold initiatives to open up the economy while being mindful of the opposition to such measures. Allies such as Ms Banerjee mostly strike a populist note and theres also a growing belief in a section of the ruling Congress that the relatively-closed nature of the economy saved the nation from the worst effects of the global credit crisis. Inadequate finances are weighing heavily on the Railways ability to make investments, said R Sivadasan, former financial commissioner, Railway Board. Things are worse than what appear on paper. This is maLive Up-Date on Rail Budget 24th Feb 2010

Share Market Rejects Rail Budget

Indian share markets have rejectted the rail budget presented by Mamta Banerjee for the year 2010-11. The market was expecting that the government would double its order for railway wagons this year to around 40,000, to be executed by companies such as Texmaco and Kalindee Rail Nirman. The sentiment turned negative as Railway Minister Mamta Banerjee kept the order for new railway wagons static at last years level of 18,000. The share prices of companies catering to the railways, which had witnessed a sharp rise during the past couple of weeks, fell sharply after the railway budget failed to meet market expectations.

Large number of new trains

In view of the increasing demand, Railway Minister Mamata Banerjee has announced a large number of long distance new trains and everal suburban trains. As many as 52 new long-distance trains have been proposed in addition to 16 trains that are to be run on the routes having places of tourist importance, and six new non-stop t'Durantos', introduced last year. Besides, four more new Duranto trains would run during the day time.

Railways strives for sports

Railway Minister Mamata Banerjee announced that Railways are the proud recipient of first Rashtriya Khel Protsahan Puraskar. Continuing the good work, she announced that five sports academies will be set up at at Delhi, Secunderabad, Chennai, Kolkata and Mumbai. Along with this some other major steps include astro-turf to be provided at more places for hockey, lead partnership of railways at Common Wealth Games and run of an exhibition train for Commonwealth games.

Indian Railways to introduce double-decker trains

Railway Minister Mamata Banerjee announced that to keep pace with modernization, the Indian Railways would introduce double-decker train-sets as a pilot project. Presenting the Railway Budget for the year 2010-2011 in the parliament, Mamata said "Double-decker train-sets matching the best in global standards will be introduced in two trains each from Delhi and Kolkata as a pilot project." Ads by Google Ernakulam City Hotel Official Site: Dream Cochin in. Ernakulam City, Cochin. Book Now! - www.DreamCochin.com Cheap Domestic Flights Fly Anywhere In India, Get Special. Fares On Flights. Hurry, Book Now! - MakeMyTrip.com/Cheap-Flights Save Tax On Income Make The Most Of Your Tax Saving. Investments This Year. Find How! - www.PersonalFN.com

Flurry of concessions in Rail Budget

Railway Minister Mamata Banerjee announced a series of concessions including carriage of foodgrains, kerosene and fertiliser. There would be a reduction of Rs 100 per wagon in freight charges for these products. Concessions for technicians of the regional film industry includes 75 per cent concession in second class sleeper and 50 per cent in higher classes in all trains while travelling for film production-related work. Cancer patients travelling for treatment would get 100 per cent concession in third AC and sleeper classes. There will be a reduction in Service charges on e-tickets reduced to Rs 10 for sleeper class and Rs 20 for AC classes from Rs 15 and Rs 40, respectively. The benefit of 50 per cent concession to the spouse of accredited journalists has been extended to the companions of those who do not have a spouse. Their dependent children of up to 18 years of age would also get 50 per cent concession once a year.

No hike in fares, freight tariff

Union railway minister Mamta Banerjee announced no hikes in passenger fares and freight tariff. TReiterating the Government's commitment to provide efficient railway network within the reach of common man, Mamata said that there would be a cut in service charges on sleeper class and AC class fares, which has been cut to Rs 10 and Rs 20.inly

financial jugglery so that

they can improve their operating ratio.

Indian Railway not to be privatised: Mamata
Presenting the Union Rail Budget 2010, Mamata Banerjee put an end on all speculations regarding privatisation of Indian railways. Instead, she emphasised on private-public partnership. Banerjee ssaid that there are no plans to privatise Indian Railway, while we urge the private sector to come forward and join hands with Indian Railways to promote and develop the second largest railway network in the world. She said that the Indian Railways is also exploring new business model and partnership option for inclusive growth.

Time for partnership with Private Sector : Mamata

Railway Minister Mamata Banerjee said that it is time for private partnership in Indian Railways, but ruled out any possibility of privatising Indian Railways. In her budget speech, Mamata said that private investment will be provided clearance within 100 days to speed up projects. She appealed to business houses to join hands for building partnership with Railways. Mamata announced that a special task force will be set up for early clearance of projects.

Mamata's Vision 2020 for Indian Railways

Mamata Banerjee unmasked her Vision 2020 for Indian railways which aims to put the largest public sector of India on a fast track. She pledged in the parliament for the same, explaining her vision which will address four strategic national goals: Inclusive development (geographically and socially), Strengthening national integration, Large-scale generation of productive employment, Environmental sustainability. It will open up new avenues for employment in the primary, secondary and tertiary sectors, accelerate economic growth and also promote socially and geographically balanced growth. In experts opinion, Vision 2020 addresses one of the biggest development challenges of contemporary India, namely, Growth with Jobs and not Jobless Growth. Vision 2020 aims at considerably enhancing the Indian Railways' contribution to the national goal of achieving double-digit GDP growth rate on a sustainable basis., by pursuing bold and unprecedented, ambitious targets in the much-needed expansion and modernization of Indian railway network.

India Inc. cherishes Rail Budget 2010

India Inc. has appreciated the announcement of another 1,000 km of new rail lines and PPP (Private-Public Partnership) offer by union Railway Minister Mamata Banerjee. In her budget speech, Mamata promised to provide all necessary clearance to new private investment in 100 days. She also announced a few dedicated freight corridors. Many sectors including steel have expressed satisfaction and termed this year's Railway Budget as visionary and positive.

NEW DELHI: Finance minister Pranab Mukherjee on Saturday admitted that some of his budget proposals

could add to inflationary pressures, but hoped that inflation would moderate from June by when the adverse base effect would have declined. My proposals will have some inflationary ingredient at about 0.41%. But in due course, it will be absorbed, he said. The finance minister also exuded confidence that the economy would grow in double digits in the near future, though high food inflation, the ambiguous nature of recovery in exports and fiscal pressures continue to be areas of concern.

I feel that the fundamentals of the economy are strong. The positives outweigh the negatives and growth will soon breach double digit barriers, he said at the annual general meeting of industry chamber Ficci. The finance minister, in his Budget speech on Friday, has pegged GDP growth at 8.5% for the next fiscal, while the PMs Economic Advisory Council has estimated that the economy would grow at 8.2%. This can be achieved through a robust recovery in private investment and consumption demand, he said, urging industry to respond to the challenge. Mr Mukherjee also allayed concerns that the economy would miss the growth target for 2009-10, after a mere 6% growth in the third quarter. The fourth quarter numbers will be better, and I feel that we can stick with the CSO projection of a GDP growth of 7.2% in 2009-10, he said at a post-Budget interaction with industry bodies later in the day. He made it clear that the fiscal stimulus measures would be completely withdrawn only after full economic recovery. He was, however, of the view that export strategy should be reviewed, as there are concerns whether the revival in exports since November 2009 can be sustained. There are some concerns regarding the extent to which export recovery seen in November and December can be sustained in the coming months given the uncertain recovery in the developed economies, the minister said. While exports have recovered in November 2009, the consignments for the April-December 2009-10 period dropped by 20.3% to $117.58 billion over the year-ago period. NEW DELHI: Candid and forthright even a gruelling 24 hours after the Finance Ministers big day, Pranab Mukherjee belies his years as he combatively asserts what many politicians who were in the same hotseat earlier pointedly have not: that the Budget is very much a political document. He tells SundayET in no uncertain terms on The Day After, We are not economists, technocrats or civil servants....I get a back-up from civil servants and economists, but I am a political activist. And my Budget is essentially a document that follows our political ideology. In a country still deeply dependent on the government, that bit of wisdom should be Politics 101. And trust a double MA in politics and history to enunciate it. The numbers Mr Mukherjee had read out on February 26 were huge and significanta planned expenditure outlay for 2010-11 of Rs 3.73 lakh crore, of which 1.37 lakh crore is earmarked for infrastructure development, Rs 48,000 crore for Bharat Nirman, Rs 40,100 crore for NREGA, Rs 36,000 crore for Sarva Shikha Abhiyaan, Rs 1,200 crore package for Bundelkhand, even Rs 500 crore for the Ganga. What SundayET learnt about the slightly-built Mr Mukherjees own statistics on February 27 are equally mindboggling. He begins his day at 7 am and makes it a point to read ETputs in a straight 18 hours of work on an average, heads 17 GoM forums (down from 42 in UPA-I), sleeps for less than 6 hours, and never takes holidaysand all this at age 74. Nothing is allowed to come in the way of his job and his broader mission. Explaining that the Budget cannot be separated from the political vision of a party, Mukherjee clarifies that the document is not an agenda of an individual, but a reflection of the partys political manifesto; the

Budget and the Five Year Plans cannot veer away from that, he emphasises. Suddenly, the infrastructure, NREGA, education and other outlays, even Bundelkhand and the Ganga goodies, make (political) sense, even as his proposals for fiscal consolidation and partial roll-back of the stimulus package meet with the economists approval. I wont say its a spectacular Budget. Let others work out and comment on it, but whatever I committed during the last year, you link it with that. I tried my best to fulfil those commitments, he says with a little smile, sitting in his first floor office in North Block earlier occupied by Liaqat Ali Khan, CD Deshmukh, VP Singh, and of course, Dr Manmohan Singh. His own earlier innings as FM has obviously preyed on his mind when only 26% of funds meant for the 6th Plan (1980-85) was utilised by 1982; the second time round, nearly 30 years later, hes made it a point to achieve a near 100% target for the current Five Year Plan. Given his 24X7 devotion to the governments politico-economic gameplan, it is a commentary on Mr Mukherjees confidence that he did not let the opposition parties walkout during his Budget speech, nor the subsequent tiring round of back-to-back interviews, get to him. He stuck to his routine and turned in at his usual time 1.30am, and was totally relaxed as SundayET met him the next day. The secret behind Mr Mukherjees fresh-as-a-daisy visage? His knack of taking power naps through the day, he reveals. And for those who were surprised by the 37% gross budgetary support for the social sector and were intrigued by the smile on Mr Mukherjees face as he announced his initiatives for rural India, heres the inside story. As a village boy, I was very hard-working. I had to travel 6 km every day to reach my school, he reminisces. There was no road to go to school. It was constructed only after I became a minister! No wonder Sarva Shiksha Abhiyan is a pet project and he robustly asserts, We must have more schools, give money to construct schools and madrassas. With the Budget preparation brouhaha behind him, the logical thing would be for Mr Mukherjee to head out for a break and relax. Maybe spend the last bit of balmy weather listening to his favourite Rabindra Sangeet. I like work, he says simply. Without work I find it quite uncomfortable. Work itself is relaxation for me! As for Rabindra Sangeet, he admits, Yes, I have a huge collection; but I hardly get time to listen. NEW DELHI: What is the budgetary outlay for the welfare of Scheduled Castes and Tribes? The answer is not immediately apparent to a lay reader of the Budget documents. For a government and a political leadership trying to establish its pro-Dalit credentials, this kind of sloppy accounting is quite surprising. Dalit leader and Indian Justice Party president Udit Raj, for example, has demanded that the government increase the outlay for the ministry of social justice and empowerment from the Rs 4,500 crore allocated in the Budget, to Rs 61,187 crore, the share of the total Plan expenditure that corresponds with the share of Scheduled Castes in the population. While conceding that outlays of other ministries would also include the special component outlays meant for Dalits, the sheer lack of accounting transparency in this regard has led him to conclude that the government is unlikely to have allocated more than 5% of the total Plan expenditure to Scheduled Caste welfare and development. The government now undertakes gender budgeting. A question that arises from Mr Rajs demand is whether the government should not create an accounting framework that makes it clear how much of the taxpayers money actually goes to improve the lives of the subaltern sections of society that the government and the political class seek to uplift.

Key Features of Budget 2010-2011

CHALLENGES To quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit growth barrier. To harness economic growth to consolidate the recent gains in making development more inclusive. To address the weaknesses in government systems, structures and institutions at different levels of governance. OVERVIEW OF THE ECONOMY India among the first few countries in the world to implement a broad-based counter-cyclic policy package to respond to the negative fallout of the global slowdown. The Advance Estimates for Gross Domestic Product (GDP) growth for 2009-10 pegged at 7.2 per cent. The final figure expected to be higher when the third and fourth quarter GDP estimates for 2009-10 become available. The growth rate in manufacturing sector in December 2009 was 18.5 per cent the highest in the past two decades. A major concern during the second half of 2009-10 has been the emergence of double digit food inflation. Government has set in motion steps, in consultation with the State Chief Ministers, which should bring down the inflation in the next few months and ensure that there is better management of food security in the country. CONSOLIDATING GROWTH Fiscal Consolidation With recovery taking root, there is a need to review public spending, mobilise resources and gear them towards building the productivity of the economy. Fiscal policy shaped with reference to the recommendations of the Thirteenth Finance Commission, which has recommended a calibrated exit strategy from the expansionary fiscal stance of last two years. It would be for the first time that the Government would target an explicit reduction in its domestic public debt-GDP ratio.
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Tax reforms On the Direct Tax Code (DTC) the wide-ranging discussions with stakeholders have been concluded Government will be in a position to implement the DTC from April 1, 2011. Centre actively engaged with the Empowered Committee of State Finance Ministers to finalise the structure of Goods and Services Tax (GST) as well as the modalities of its expeditious implementation. Endeavour to introduce GST by April, 2011 Peoples ownership of PSUs Ownership has been broad based in Oil India Limited, NHPC, NTPC and Rural Electrification Corporation while the process is on for National Mineral

Development Corporation and Satluj Jal Vidyut Nigam. This will raise about Rs 25,000 crore during the current year. Higher amount proposed to be raised during the year 2010-11. Fertiliser subsidy A Nutrient Based Subsidy policy for the fertiliser sector has been approved by the Government and will become effective from April 1, 2010. This will lead to an increase in agricultural productivity and better returns for the farmers, and overtime reduce the volatility in demand for fertiliser subsidy and contain the subsidy bill. Petroleum and Diesel pricing policy Expert Group to advise the Government on a viable and sustainable system of pricing of petroleum products has submitted its recommendations. Decision on these recommendations will be taken in due course. Improving Investment Environment Foreign Direct Investment Number of steps taken to simplify the FDI regime. Methodology for calculation of indirect foreign investment in Indian companies has been clearly defined. Complete liberalisation of pricing and payment of technology transfer fee and trademark, brand name and royalty payments. Financial Stability and Development Council An apex level Financial Stability and Development Council to be set up with a view to strengthen and institutionalise the mechanism for maintaining financial stability. This Council would monitor macro-prudential supervision of the economy, including the functioning of large financial conglomerates, and address interregulatory coordination issues.
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Banking Licences RBI is considering giving some additional banking licenses to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBIs eligibility criteria. Public Sector Bank Capitalisation Rs.16,500 crore provided to ensure that the Public Sector Banks are able to attain a minimum 8 per cent Tier-I capital by March 31, 2011. Recapitalisation of Regional Rural Banks (RRB) Government to provide further capital to strengthen the RRBs so that they have adequate capital base to support increased lending to the rural economy. Corporate Governance Government has introduced the Companies Bill, 2009 in the Parliament to replace the existing Companies Act, 1956, which will address issues related to regulation in corporate sector in the context of the changing business environment. Exports Extension of existing interest subvention of 2 per cent for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises. Agriculture Growth Government will follow a four-pronged strategy, covering (a) Agricultural production Rs. 400 crore provided to extend the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa. Rs. 300 crore provided to organise 60,000 pulses and oil seed villages in rain-fed

areas during 2010-11 and provide an integrated intervention for water harvesting, watershed management and soil health, to enhance the productivity of the dry land farming areas. Rs. 200 crore provided for sustaining the gains already made in the green revolution areas through conservation farming, which involves concurrent attention to soil health, water conservation and preservation of biodiversity. (b) Reduction in wastage of produce Government to address the issue of opening up of retail trade. It will help in bringing down the considerable difference between farm gate, wholesale and retail prices. Deficit in the storage capacity met through an ongoing scheme for private sector participation FCI to hire godowns from private parties for a guaranteed period of 7 years. (c) Credit support to farmers Banks have been consistently meeting the targets set for agriculture credit flow in the past few years. For the year 2010-11, the target has been set at Rs.3,75,000 crore.
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In view of the recent drought in some States and the severe floods in some other parts of the country, the period for repayment of the loan amount by farmers extended by six months from December 31, 2009 to June 30, 2010 under the Debt Waiver and Debt Relief Scheme for Farmers. Incentive of additional one per cent interest subvention to farmers who repay short-term crop loans as per schedule, increased to 2% for 2010-11. (d) Impetus to the food processing sector In addition to the ten mega food park projects already being set up, the Government has decided to set up five more such parks. External Commercial Borrowings to be available for cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat. Infrastructure Rs 1,73,552 crore provided for infrastructure development which accounts for over 46 per cent of the total plan allocation. Allocation for road transport increased by over 13 per cent from Rs. 17,520 crore to Rs 19,894 crore. Rs 16,752 crore provided for Railways, which is about Rs.950 crore more than last year. India Infrastructure Finance Company Limited (IIFCL) IIFCLs disbursements are expected to touch Rs 9,000 crore by end March 2010 and reach around Rs 20,000 crore by March 2011. IIFCL has refinanced bank lending to infrastructure projects of Rs. 3,000 crore during the current year and is expected to more than double that amount in 2010-11. The take-out financing scheme announced in the last Budget is expected to initially provide finance for about Rs. 25,000 crore in the next three years. Energy Plan allocation for power sector excluding RGGVY doubled from Rs.2230 crore in 2009-10 to Rs.5,130 crore in 2010-11. Government proposes to introduce a competitive bidding process for allocating coal blocks for captive mining to ensure greater transparency and increased participation in production from these blocks. A Coal Regulatory Authority to create a level playing field in the coal sector proposed to be set up. Plan outlay for the Ministry of New and Renewable Energy increased by 61 per

cent from Rs.620 crore in 2009-10 to Rs.1,000 crore in 2010-11. Solar, small hydro and micro power projects at a cost of about Rs.500 crore to be set up in Ladakh region of Jammu and Kashmir.
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Environment and Climate change National Clean Energy Fund for funding research and innovative projects in clean energy technologies to be established. One-time grant of Rs.200 crore to the Government of Tamil Nadu towards the cost of installation of a zero liquid discharge system at Tirupur to sustain knitwear industry. Rs.200 crore provided as a Special Golden Jubilee package for Goa to preserve the natural resources of the State, including sea beaches and forest cover. Allocation for National Ganga River Basin Authority (NGRBA) doubled in 2010-11 to Rs.500 crore. Schemes on bank protection works along river Bhagirathi and river Ganga-Padma in parts of Murshidabad and Nadia district of West Bengal included in the Centrally Sponsored Flood Management Programme. A project at Sagar Island to be developed to provide an alternate port facility in West Bengal. INCLUSIVE DEVELOPMENT The spending on social sector has been gradually increased to Rs.1,37,674 crore in 2010-11, which is 37% of the total plan outlay in 2010-11. Another 25 per cent of the plan allocations are devoted to the development of rural infrastructure. Education Plan allocation for school education increased by 16 per cent from Rs.26,800 crore in 2009-10 to Rs.31,036 crore in 2010-11. In addition, States will have access to Rs.3,675 crore for elementary education under the Thirteenth Finance Commission grants for 2010-11. Health An Annual Health Survey to prepare the District Health Profile of all Districts shall be conducted in 2010-11. Plan allocation to Ministry of Health & Family Welfare increased from Rs 19,534 crore in 2009-10 to Rs 22,300 crore for 2010-11. Financial Inclusion Appropriate Banking facilities to be provided to habitations having population in excess of 2000 by March, 2012. Insurance and other services to be provided using the Business Correspondent model. By this arrangement, it is proposed to cover 60,000 habitations. Augmentation of Rs.100 crore each for the Financial Inclusion Fund (FIF) and the Financial Inclusion Technology Fund, which shall be contributed by Government of India, RBI and NABARD.
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Rural Development Rs. 66,100 crore provided for Rural Development. Allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme stepped up to Rs.40,100 crore in 2010-11. An amount of Rs.48,000 crore allocated for rural infrastructure programmes under Bharat Nirman. Unit cost under Indira Awas Yojana increased to Rs.45,000 in the plain areas and to Rs.48,500 in the hilly areas. Allocation for this scheme increased to Rs.10,000 crore.

Allocation to Backward Region Grant Fund enhanced by 26 per cent from Rs.5,800 crore in 2009-10 to Rs 7,300 crore in 2010-11. Additional central assistance of Rs 1,200 crore provided for drought mitigation in the Bundelkhand region. Urban Development and Housing Allocation for urban development increased by more than 75 per cent from Rs.3,060 crore to Rs.5,400 crore in 2010-11. Allocation for Housing and Urban Poverty Alleviation raised from Rs.850 crore to Rs.1,000 crore in 2010-11. Scheme of one per cent interest subvention on housing loan upto Rs.10 lakh, where the cost of the house does not exceed Rs.20 lakh announced in the last Budget extended up to March 31, 2011. Rs.700 crore provided for this scheme for the year 2010-11. Rs.1,270 crore allocated for Rajiv Awas Yojana as compared to Rs.150 crore last year. Micro, Small & Medium Enterprises High Level Council on Micro and Small Enterprises to monitor the implementation of the recommendations of High-Level Task Force constituted by Prime Minister. Allocation for this sector to be increased from Rs.1,794 crore to Rs.2,400 crore for the year 2010-11. The corpus for Micro-Finance Development and Equity Fund doubled to Rs.400 crore in 2010-11. Unorganised Sector National Social Security Fund for unorganised sector workers National Social Security Fund for unorganised sector workers to be set up with an initial allocation of Rs.1000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc. Rashtriya Swasthya Bima Yojana benefits extended to all such Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year.
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A new initiative, Swavalamban will be available for persons who join New Pension Scheme (NPS), with a minimum contribution of Rs.1,000 and a maximum contribution of Rs.12,000 per annum during the financial year 2010-11, wherein Government will contribute Rs.1,000 per year to each NPS account opened in the year 2010-11. Allocation of Rs.100 crore made for this initiative. Skill development National Skill Development Corporation has approved three projects worth about Rs 45 crore to create 10 lakh skilled manpower at the rate of one lakh per annum. An extensive skill development programme in the textile and garment sector to be launched by leveraging the strength of existing institutions and instruments of the Textile Ministry to train 30 lakh persons over 5 years. Social Welfare Plan outlay for Women and Child Development stepped up by almost 50 per cent. The ICDS platform being expanded for effective implementation of the Rajiv Gandhi Scheme for Adolescent Girls. Saakshar Bharat to further improve female literacy rate launched with a target of 7 crore non-literate adults which includes 6 crore women. Mahila Kisan Sashaktikaran Pariyojana to meet the specific needs of women farmers to be launched with a provision of Rs 100 crore as a sub-component of the National Rural Livelihood Mission. Plan outlay of the Ministry of Social Justice and Empowerment enhanced by 80

per cent to Rs.4500 crore. With this enhancement, the Ministry will be able to revise rates of scholarship under its post-matric scholarship schemes for SCs and OBC students. Plan allocation for the Ministry of Minority Affairs increased by 50 per cent from Rs.1,740 crore to Rs.2,600 crore for the year 2010-11. STRENGTHENING TRANSPARENCY & PUBLIC ACCOUNTABILTY Financial Sector Legislative Reforms Commission to be set up to rewrite and clean up the financial sector laws to bring them in line with the requirements of the sector. Rs 1,900 crore allocated to the Unique Identification Authority of India (UIDAI) for 2010-11. UIDAI will be able to meet its commitments of issuing the first set of UID numbers in the coming year A Technology Advisory Group for Unique Projects (TAGUP) to be set up to look into various technological and systemic issues for effective tax administration and financial governance. Independent Evaluation Office (IEO) chaired by the Deputy Chairman, Planning Commission to be set up to evaluate the impact of flagship programmes.
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Security and Justice Allocation for Defence increased to Rs. 1,47,344 crore including Rs 60,000 crore for capital expenditure. About 2,000 youth to be recruited as constables in five Central Para Military Forces from Jammu and Kashmir in the year 2010. Planning Commission to prepare an integrated action plan for the thirty-three left wing extremism affected districts. Adequate funds will be made available to support the action plan. Government has approved the setting up of the National Mission for Delivery of Justice and Legal Reforms to help reduce legal backlog in courts from an average of 15 years at present to 3 years by 2012. BUDGET ESTIMATES 2010-11 The Gross Tax Receipts are estimated at Rs. 7,46,651 crore The Non Tax Revenue Receipts are estimated at Rs. 1,48,118 crore. The net tax revenue to the Centre as well as the expenditure provisions in 2010-11 have been estimated with reference to the recommendations of the Thirteenth Finance Commission. The total expenditure proposed in the Budget Estimates is Rs. 11,08,749 crore, which is an increase of 8.6 per cent over last year. The Plan and Non Plan expenditures in BE 2010-11 are estimated at Rs. 3,73,092 crore and Rs. 7,35,657 crore respectively. While there is 15 per cent increase in Plan expenditure, the increase in Non Plan expenditure is only 6 per cent over the BE of previous year. Fiscal deficit for BE 2010-11 at 5.5 per cent of GDP, which works out to Rs.3,81,408 crore. Taking into account the various other financing items for fiscal deficit, the actual net market borrowing of the Government in 2010-11 would be of the order of Rs.3,45,010 crore. This would leave enough space to meet the credit needs of the private sector. The rolling targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12 and 2012-13, respectively. Against a fiscal deficit of 7.8 per cent in 2008-09, inclusive of oil and fertilizer bonds, the comparable fiscal deficit is 6.9 per cent as per the Revised Estimates for 2009-10.

Conscious effort made to avoid issuing bonds to oil and fertilizer companies. Government would like to continue with this practice of extending Government subsidy in cash, thereby bringing all subsidy related liabilities into Governments fiscal accounting.
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PART B TAX PROPOSALS The Centralized Processing Centre at Bengaluru is now fully functional and is processing around 20,000 returns daily. This initiative will be taken forward by setting up two more Centres during the year. The Income Tax department has introduced Sevottam, a pilot project at Pune, Kochi and Chandigarh through Aayakar Seva Kendras, which provide a single window system for registration of all applications including those for redressal of grievances as well as paper returns. The scheme will be extended to four more cities in the year. Automation of Central Excise & Service Tax, has already been rolled out throughout the country this year. Similarly, a Mission Mode Project for computerization of Commercial Taxes in States has been approved recently. With an outlay of Rs. 1133 crore of which the Centres share is Rs. 800 crore, the project will lay the foundation for the launch of GST. The income tax department to notify SARAL-II form for individual salaried taxpayers for the coming assessment year. Scope of cases which may be admitted by the Settlement Commission expanded to include proceedings related to search and seizure cases pending for assessment. Scope of Settlement Commission also expanded in respect of Central Excise and Customs to include certain categories of cases that hitherto fell outside its jurisdiction. Bi-lateral discussions commenced to enhance the exchange of bank related and other information to effectively track tax evasion and identify undisclosed assets of resident Indians lying abroad. Direct Taxes Income tax slabs for individual taxpayers to be as follows Income upto Rs 1.6 lakh Nil Income above Rs 1.6 lakh and upto Rs. 5 lakh 10 per cent Income above Rs.5 lakh and upto Rs. 8 lakh 20 per cent Income above Rs. 8 lakh 30 per cent Deduction of an additional amount of Rs. 20,000 allowed, over and above the existing limit of Rs.1 lakh on tax savings, for investment in long-term infrastructure bonds as notified by the Central Government Besides contributions to health insurance schemes which is currently allowed as a deduction under the Income-tax Act, contributions to the Central Government Health Scheme also allowed as a deduction under the same provision. Current surcharge of 10 per cent on domestic companies reduced to 7.5 per cent. Rate of Minimum Alternate Tax (MAT) increased from the current rate of 15 per cent to 18 per cent of book profits.
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To further encourage R&D across all sectors of the economy, weighted deduction on expenditure incurred on in-house R&D enhanced from 150 per cent to 200 per cent. Weighted deduction on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research enhanced from 125 per cent to 175 per cent. Payment made to an approved association engaged in research in social sciences or statistical research to be allowed as a weighted deduction of 125 per cent. The income of such approved research association shall be exempt from tax.

Benefit of investment linked deduction under the Act extended to new hotels of two-star category and above anywhere in India to boost investment in the tourism sector. Allow pending projects to be completed within a period of five years instead of four years for claiming a deduction of their profits, as a one time interim relief to the housing and real estate sector. Norms for built-up area of shops and other commercial establishments in housing projects to be relaxed to enable basic facilities for their residents. Limits for turnover over which accounts need to be audited enhanced to Rs. 60 lakh for businesses and to Rs. 15 lakh for professions. Limit of turnover for the purpose of presumptive taxation of small businesses enhanced to Rs. 60 lakh. If tax has been deducted on payment by way of any expense and is paid before the due date of filing the return, such expenditure to be allowed for deduction. Interest charged on tax deducted but not deposited by the specified date to be increased from 12 per cent to 18 per cent per annum. To facilitate the conversion of small companies into Limited Liability Partnerships, transfer of assets as a result of such conversion not to be subject to capital gains tax. The advancement of any other object of general public utility to be considered as charitable purpose even if it involves carrying on of any activity in the nature of trade, commerce or business provided that the receipts from such activities do not exceed Rs.10 lakh in the year . Proposals on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the year. Indirect Taxes Rate reduction in Central Excise duties to be partially rolled back and the standard rate on all non-petroleum products enhanced from 8 per cent to 10 per cent ad valorem. The specific rates of duty applicable to portland cement and cement clinker also adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports-utility vehicles increased by 2 percentage points to 22 per cent.
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Restore the basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products. Central Excise duty on petrol and diesel enhanced by Re.1 per litre each. Some structural changes in the excise duty on cigarettes, cigars and cigarillos to be made coupled with some increase in rates. Excise duty on all non-smoking tobacco such as scented tobacco, snuff, chewing tobacco etc to be enhanced. Compounded levy scheme for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch packing machines to be introduced. Agriculture & Related Sectors Provide project import status with a concessional import duty of 5 per cent for the setting up of mechanised handling systems and pallet racking systems in mandis or warehouses for food grains and sugar as well as full exemption from service tax for the installation and commissioning of such equipment. Provide project import status at a concessional customs duty of 5 per cent with full exemption from service tax to the initial setting up and expansion of Cold storage, cold room including farm pre-coolers for preservation or storage of agriculture and related sectors produce ; and Processing units for such produce.

Provide full exemption from customs duty to refrigeration units required for the manufacture of refrigerated vans or trucks. Provide concessional customs duty of 5 per cent to specified agricultural machinery not manufactured in India; Provide central excise exemption to specified equipment for preservation, storage and processing of agriculture and related sectors and exemption from service tax to the storage and warehousing of their produce; and Provide full exemption from excise duty to trailers and semi-trailers used in agriculture. Concessional import duty to specified machinery for use in the plantation sector to be, extended up to March 31, 2011 along with a CVD exemption. To exempt the testing and certification of agricultural seeds from service tax. The transportation by road of cereals, and pulses to be exempted from service tax. Transportation by rail to remain exempt. To ease the cash flow position for small-scale manufacturers, they would be permitted to take full credit of Central Excise duty paid on capital goods in a single installment in the year of their receipt. Secondly, they would be permitted to pay Central Excise duty on a quarterly, rather than monthly, basis. Environment To build the corpus of the National Clean Energy Fund, clean energy cess on coal produced in India at a nominal rate of Rs.50 per tonne to be levied. This cess will also apply on imported coal.
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Provide a concessional customs duty of 5 per cent to machinery, instruments, equipment and appliances etc. required for the initial setting up of photovoltaic and solar thermal power generating units and also exempt them from Central Excise duty. Ground source heat pumps used to tap geo-thermal energy to be exempted from basic customs duty and special additional duty. Exempt a few more specified inputs required for the manufacture of rotor blades for wind energy generators from Central Excise duty. Central Excise duty on LED lights reduced from 8 per cent to 4 per cent at par with Compact Fluorescent Lamps. To remedy the difficulty faced by manufacturers of electric cars and vehicles in neutralising the duty paid on their inputs and components, a nominal duty of 4 per cent on such vehicles imposed. Some critical parts or sub-assemblies of such vehicles exempted from basic customs duty and special additional duty subject to actual user condition. These parts would also enjoy a concessional CVD of 4 per cent. A concessional excise duty of 4 per cent provided to soleckshaw, a product developed by CSIR to replace manually-operated rickshaws. Its key parts and components to be exempted from customs duty. Import of compostable polymer exempted from basic customs duty. Infrastructure Project import status to Monorail projects for urban transport at a concessional basic duty of 5 per cent granted. To allow resale of specified machinery for road construction projects on payment of import duty at depreciated value. To encourage the domestic manufacture of mobile phones accessories, exemptions from basic, CVD and special additional duties are now being extended to parts of battery chargers and hands-free headphones. The validity of the exemption from special additional duty is being extended till March 31, 2011. Medical Sector

Uniform, concessional basic duty of 5 per cent, CVD of 4 per cent with full exemption from special additional duty prescribed on all medical equipments. A concessional basic duty of 5 per cent is being prescribed on parts and accessories for the manufacture of such equipment while they would be exempt from CVD and special additional duty. Full exemption currently available to medical equipment and devices such as assistive devices, rehabilitation aids etc. retained. The concession available to Government hospitals or hospitals set up under a statute also retained. Specified inputs for the manufacture of orthopaedic implants exempted from import duty.
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Infotainment To address the difficulties experienced by film industry in importing digital masters of films for duplication or distribution loaded on electronic medium vis-a-vis those imported on cinematographic film, owing to a differential customs duty structure, customs duty to be charged only on the value of the carrier medium. The same dispensation would apply to music and gaming software imported for duplication. In all such cases the value representing the transfer of intellectual property rights would be subjected to service tax. Provide project import status at a concessional customs duty of 5 per cent with full exemption from special additional duty to the initial setting up Digital Head End equipment by multi-service operators. Precious Metals Rates on precious metals indexed as follows: On gold and platinum from Rs.200 per 10 grams to Rs.300 per 10 grams On silver from Rs.1,000 per kg to Rs.1,500 per kg. Basic customs on Rhodium a precious metal used for polishing jewellery reduced to 2 per cent. Basic customs duty on gold ore and concentrates reduced from 2 per cent ad valorem to a specific duty of Rs.140 per 10 grams of gold content with full exemption from special additional duty. Further, the excise duty on refined gold made from such ore or concentrate reduced from 8 per cent to a specific duty of Rs.280 per 10 grams. Other Proposals Full exemption from import duty available to specified inputs or raw materials required for the manufacture of sports goods expanded to cover a few more items. Basic customs duty on one of key components in production of micro-wave ovens, namely magnetrons, reduced from 10 per cent to 5 per cent. Value limit of Rs. 1 lakh per annum on duty-free import of commercial samples as personal baggage enhanced to Rs. 3 lakh per annum. Outright exemption from special additional duty provided to goods imported in a pre-packaged form for retail sale. This would also cover mobile phones, watches and ready-made garments even when they are not imported in pre-packaged form. The refund-based exemption is also being retained for cases not covered by the new dispensation. Toy balloons fully exempted from Central Excise duty. Reduction in basic customs duty on long pepper from 70 per cent to 30 per cent; Reduction in basic customs duty on asafoetida from 30 per cent to 20 per cent; Reduction in central excise duty on replaceable kits for household type water filters other than those based on RO technology to 4 per cent;
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Reduction in central excise duty on corrugated boxes and cartons from 8 per cent to 4 per cent; Reduction in central excise duty on latex rubber thread from 8 per cent to 4 per cent; and Reduction in excise duty on goods covered under the Medicinal and Toilet Preparations Act from 16 per cent to 10 per cent. Proposals relating to customs and central excise are estimated to result in a net revenue gain of Rs. 43,500 crore for the year. Service Tax Rate of tax on services retained at 10 per cent to pave the way forward for GST. Certain services, hitherto untaxed, to be brought within the purview of the service tax levy. These to be notified separately. Process of refund of accumulated credit to exporters of services, especially in the area of Information Technology and Business Process Outsourcing, made easy by making necessary changes in the definition of export of services and procedures. Accredited news agencies which provide news feed online that meet certain criteria, exempted from service tax. Proposals relating to service tax are estimated to result in a net revenue gain of Rs 3,000 crore for the year. Proposals on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the year. Proposals relating to Indirect Taxes estimated to result in a net revenue gain of Rs.46,500 crore for the year. Taking into account the concessions being given in the tax proposals and measures taken to mobilise additional resources, the net revenue gain is estimated to be Rs. 20,500 crore for the year.

New Rates of Income tax INCOME-TAX Rates of Income-tax I. Rates of income-tax in respect of income liable to tax for the assessment year 2010-11

In respect of income of all categories of assessees liable to tax for the assessment year 2010-11, the rates of income-tax have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance (No.2) Act, 2009, for the purposes of computation of advance tax, deduction of tax at source from Salaries and charging of tax payable in certain cases. (1) Surcharge on income-tax Surcharge shall be levied in respect of income liable to tax for the assessment year 2010-11, in the following cases: (a) in the case of a domestic company having total income exceeding one crore rupees, the amount of income-tax computed shall be increased by a surcharge for purposes of the Union calculated at the rate of ten per cent. of such income tax.

(b) in the case of a company, other than a domestic company, having total income exceeding one crore rupees, the amount of income-tax computed shall be increased by a surcharge for purposes of the Union calculated at the rate of two and one-half per cent. of such income tax. However, marginal relief shall be allowed in all these cases to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over one crore rupees is limited to the amount by which the income is more than one crore rupees. Also, in the case of every company having total income chargeable to tax under section 115JB of the Income Tax Act, 1961 (hereinafter referred to as Income-tax Act) and where such income exceeds one crore rupees, marginal relief shall be provided. (2) Education Cess For assessment year 2010-11, additional surcharge called the Education Cess on income-tax and Secondary and Higher Education Cess on income-tax shall continue to be levied at the rate of two per cent. and one per cent., respectively, on the amount of tax computed, inclusive of surcharge, in all cases. No marginal relief shall be available in respect of such Cess.

II. Rates for deduction of income-tax at source during the financial year 2010-11 from certain incomes other than Salaries The rates for deduction of income-tax at source during the financial year 2010-11 from certain incomes other than Salaries have been specified in Part II of the First Schedule to the Bill. The rates for all the categories of persons will remain the same as those specified in Part II of the First Schedule to the Finance (No.2) Act, 2009, for the purposes of deduction of income-tax at source during the financial year 2009-10. (1) Surch arge The amount of tax so deducted, in the case of a company other than a domestic company, shall be increased by a surcharge at the rate of two and one-half per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees. No surcharge will be levied on deductions in other cases. (2) Education Cess Education Cess on income-tax and Secondary and Higher Education Cess on income-tax shall continue to be levied at the rate of two per cent. and one per cent. respectively, of income tax including surcharge wherever applicable, in the cases of persons not resident in India including companies other than domestic company. III. Rates for deduction of income-tax at source from Salaries, computation of advance tax and charging of income- tax in special cases during the financial year 2010-11

The rates for deduction of income-tax at source from Salaries during the financial year 2010-11 and also for computation of advance tax payable during the said year in the case of all categories of assessees have been specified in Part III of the First Schedule to the Bill. These rates are also applicable for charging income-tax during the financial year 2010-11 on current incomes in cases where accelerated assessments have to be made, for instance, provisional assessment of shipping profits arising in India to non- residents, assessment of persons leaving India for good during the financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for a short duration, etc. The salient features of the rates specified in the said Part III are indicated in the following paragraphs A. Individual, Hindu undivided family, association of persons, body of individuals, artificial juridical person The rates of income-tax in the case of every individual or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in subclause (vii) of clause (31) of section 2 of the Income-tax Act (not being a case to which any other Paragraph of Part III applies) have been specified in Paragraph A of Part III. The basic exemption limits and the rates of income-tax will continue to be the same as those specified for assessment year 2010-11. However, the tax slabs are revised as under: Upto Nil. Rs. 10 20 per 1,60,001 cent. Rs. cent. to 5,00,001 Above Rs. to Rs. Rs. 5,00,000 8,00,000 8,00,000 Rs. 1,60,000

per

30 per cent.

In the case of every individual, being a woman resident in India, and below the age of sixty-five years at any time during the previous year, Upto Nil. Rs. 10 20 per per 1,90,001 cent. to Rs.5,00,001 Above Rs. to Rs. Rs. 5,00,000 8,00,000 8,00,000 Rs. 1,90,000

cent.

30 per cent. In the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year, Upto Nil. Rs. 10 20 per per 2,40,001 cent. Rs. to 5,00,001 Above Rs. to Rs. 5,00,000 Rs.8,00,000 8,00,000 Rs. 2,40,000

cent.

30 per cent. No surcharge shall be levied in the cases of persons covered under paragraph-A of part-III of the First Schedule. B. Co-operative Societies

In the case of co-operative societies, the rates of income-tax have been specified in Paragraph B of Part III of the First Schedule to the Bill. These rates will continue to be the same as those specified for assessment year 2010-11. No surcharge will be levied. C. Firms In the case of firms, the rate of income-tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for assessment year 2010-11. No surcharge shall be levied. D. Local authorities

The rate of income-tax in the case of every local authority is specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the assessment year 2010-11. No surcharge will be levied. E. Companies

The rates of income-tax in the case of companies are specified in Paragraph E of Part III of the First Schedule to the Bill. These rates are the same as those specified for the assessment year 2010-11. The existing surcharge of ten per cent. on a domestic company is proposed to be reduced to seven and onehalf per cent. In case of companies other than domestic companies, the surcharge shall be levied at the same rate and subject to the same conditions as were applicable for the assessment year 2010-11. However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

The existing surcharge of ten per cent. in all other cases (including sections 115JB, 115-O, 115R, etc.) is proposed to be reduced to seven and one-half per cent. For financial year 2010-11, additional surcharge called the Education Cess on income-tax and Secondary and Higher Education Cess on income-tax shall continue to be levied at the rate of two per cent. and one per cent. respectively, on the amount of tax computed, inclusive of surcharge, in all cases. No marginal relief shall be available in respect of such Cess.