SUBJECT : MANAGERIAL

ECONOMICS

TOPIC : BUDGET

SUBMITTED BY :

MANISH SHARMA (52501)

PRADISH NAIR (52517)
UMESH YENUWAR (52521)
NAVIN BHAGTIANI (52525)
SUMEET MAKHIJA (52544)

SUBMITTED TO :
KIRAN HARDWANI MAM
“THE MOST PLEASING PART OF ANY PROJECT IS TO
EXPRESS GRATITUDE TOWARDS ALL THOSE WHO
DIRECTLY OR INDIRECTLY CONTRIBUTE TO
WORKING OF THE PROJECT.”

WE ARE VERY MUCH THANKFUL TO

MISS. KIRAN MAM FOR GIVING US SUCH A
FABOULOUS PROJECT WHICH REALLY
EMPOWERED OUR KNOWLEDGE REGARDING
BUDGET AND THE CHALLENGES FACED BY
GOVERNMENT.
WE ALSO WISH TO EXPRESS GRATITUDE TO ALL
THE RESPONDENTS OF THE PROJECT WITHOUT
THE KIND CO-OPERATION OF WHOM THIS
WOULD NOT HAVE BEEN POSSIBLE.
 INTRODUCTION

Budget is a financial statement that coins down the expected

revenue and expenditure of a particular fiscal year. A budget is generally
a list of all planned expenses and revenues. It is a plan for saving and
spending. A budget is an important concept in microeconomics, which
uses a budget line to illustrate the trade-offs between two or more goods.
In other terms, a budget is an organizational plan stated in monetary
terms.
Budgeting is an integral part of society. In todays hurry up and get
it done society; every day we are trying to budget our time, our meals,
our kids' time and our money. Unfortunately for many, most of this
process is done mentally and never put on paper. Remember, just as
families budget your business must also develop a financial plan. This
type of budget is simply a formal written summary of your goals and
intentions in terms of dollars. 
Budgeting requires you to look ahead and formalize future goals.
By establishing a budget, you can set goals for achieving a certain level
of income and monitor your expenses. Many home based and small-
business owners have remarked that their increase in profit margins did
not occur until they had a written revenue goal and a method with which
to monitor expenses. 
Other business owners need to know their sales levels in terms of
dollars and how hard they need to work to make the budget work. The
closer you come to the goals you have set for yourself, the closer you
will come to achieving the budget amount you need.

In summary, the purpose of budgeting is to:

1. Provide a forecast of revenues and expenditures i.e. construct a

model of how our business might perform financially speaking if
certain strategies, events and plans are carried out.
2. Enable the actual financial operation of the business to be
measured against the forecast.
 BUDGET TYPES

There are different types of Budget that may be discussed in the

following section:
 Partial Budget: Partial Budget aims to make small changes in the
financial condition of a corporation. The process of Partial Budgeting
involves a comparison between the plus and minus effects occurring
due to the implementation of the proposed changes on the net income.

Partial Budgets are in fact helpful while evaluating changes like:

 Improving the capital condition

 Expansion in the size of a company
 Searching for alternative companies, where changes need to
be introduced
 Employment of a custom operation, and not a purchasing
instrument
 Variations in the methods of productions

 Business Set Up Budget: A Business Set up Budget deals with the

financial expenses required during the establishment of a commercial
firm or enterprise. The expenses in this case include the costing of the
basic infrastructures. It is considered as one of the fundamental means
of introducing, improving and maintaining a business house. Hence, it
explicitly studies the inflow of cash in the form of income, and plans
the expenses of the concerned organization, based on the available
funds in hand. Since a Business Set up Budget is only based on
assessments of the expected income and expenditures, the predictions
and calculations are subject to variations. Hence arises the requirement
of reviewing the budgetary documents from time to time, to adjust the
estimated facts and figures with the actual ones. 

 Government Budgets: are the summarized versions of the

anticipated revenues and expenses of a government. Formulated by the
executive and passed by the legislature as a legal document,
Government Budgets focus on the distribution of wealth for economic
 as well as political and social purposes. Some areas covered by the
budget include:

Exemption from personal income tax:

 Superannuating schemes
 Estimating the status of the national exchequer, both during
the last and coming fiscal years
 Enhancing sectoral productivities
 Corporate Budgets: formulate the annual fiscal agendas,
plans and programs of a commercial organization. It works for
putting forward the expected income and expenditure figures of a
company, for the next financial year.

Corporate Budgets: formulate the annual fiscal agendas, plans and

programs of a commercial organization. It works for putting forward
the expected income and expenditure figures of a company, for the
next financial year.

Sales budget: The sales budget is an estimate of future sales, often

broken down into both units and dollars. It is used to create company
sales goals.

 Production budget: Product oriented companies create a production

budget which estimates the number of units that must be manufactured
to meet the sales goals. The production budget also estimates the
various costs involved with manufacturing those units, including labor
and material.

 Cash Flow/Cash budget: The cash flow budget is a prediction of future

cash receipts and expenditures for a particular time period. It usually
covers a period in the short term future. The cash flow budget helps
the business determine when income will be sufficient to cover
expenses and when the company will need to seek outside financing.
 Marketing budget: The marketing budget is an estimate of the
funds needed for promotion, advertising, and public relations in
order to market the product or service.

 Project budget: The project budget is a prediction of the costs

associated with a particular company project. These costs include
labor, materials, and other related expenses. The project budget is
often broken down into specific tasks, with task budgets assigned to
each.

 Revenue budget: The Revenue Budget consists of revenue receipts

of government and the expenditure met from these revenues. Tax
revenues are made up of taxes and other duties that the
government levies.

 Expenditure budget: A budget type which include of spending data

items…
 BUDGET PROPOSAL

1) GROWTH RATE OF GDP:-

1. India registered an impressive 6.7 percent growth in fiscal 2008-

09, despite the deepest economic crisis facing the global economy
in six decades, official data showed Friday.
2. Even though lower than the 9 percent growth in gross domestic
product (GDP) registered in 2007-08, the expansion in the current
fiscal has been on the upper side of between 6-7 percent that was
predicted by the government in the wake of the global slowdown.
3. 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.
4. The target fiscal deficit for 2010-11 is 6.8%.Revenue deficit for
2010-11 is estimated at 4.8% as against the revised estimate of
4.4% for 2009-10.
5. We estimate that growth rate would be 8.3% for the financial
year 2010 - 2011.
 INFLATION RATE FROM THE PERIOD
JANUARY 2000 TO JUNE 2010

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ave

2010 2.63% 2.14% 2.31% 2.24% 2.02% 1.05% NA NA NA NA NA NA NA

- - - - - - - -
2009 0.03% 0.24% 1.84% 2.72% -0.34%
0.38% 0.74% 1.28% 1.43% 2.10% 1.48% 1.29% 0.18%

2008 4.28% 4.03% 3.98% 3.94% 4.18% 5.02% 5.60% 5.37% 4.94% 3.66% 1.07% 0.09% 3.85%

2007 2.08% 2.42% 2.78% 2.57% 2.69% 2.69% 2.36% 1.97% 2.76% 3.54% 4.31% 4.08% 2.85%

2006 3.99% 3.60% 3.36% 3.55% 4.17% 4.32% 4.15% 3.82% 2.06% 1.31% 1.97% 2.54% 3.24%

2005 2.97% 3.01% 3.15% 3.51% 2.80% 2.53% 3.17% 3.64% 4.69% 4.35% 3.46% 3.42% 3.39%

2004 1.93% 1.69% 1.74% 2.29% 3.05% 3.27% 2.99% 2.65% 2.54% 3.19% 3.52% 3.26% 2.68%

2003 2.60% 2.98% 3.02% 2.22% 2.06% 2.11% 2.11% 2.16% 2.32% 2.04% 1.77% 1.88% 2.27%

2002 1.14% 1.14% 1.48% 1.64% 1.18% 1.07% 1.46% 1.80% 1.51% 2.03% 2.20% 2.38% 1.59%

2001 3.73% 3.53% 2.92% 3.27% 3.62% 3.25% 2.72% 2.72% 2.65% 2.13% 1.90% 1.55% 2.83%

2000 2.74% 3.22% 3.76% 3.07% 3.19% 3.73% 3.66% 3.41% 3.45% 3.45% 3.45% 3.39% 3.38%

Note: Red indicates Deflation, NA indicates data not yet released.

 AGRICULTURE DEVELOPMENT
 Target for agriculture credit flow set at Rs.3,25,000 crore for the
year 2009 -10.In 2008-09 agriculture credit flow was at
Rs.2,87,000 crore.
 Interest subvention scheme for short term crop loans up to Rs.3
lakh per farmer at the interest rate of 7 per cent per annum to be
continued. Additional subvention of 1 per cent to be paid from this
year, as incentive to those farmers who repay short term crop loans
on schedule.
 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.
 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.
 We estimate that agricultural credit flow would be nearly
3,35,000 - 4,00,000 crore for the financial tear 2010-2011.
 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.

Commodities to be Cheaper & Costlier: Budget 2010-11

Costlier Cheaper
Jewelry Gaming software’s
Gold and Platinum Toys
Refrigerators CDs
Televisions CFLs
Cement Mobile Phones
Air Conditioners  
Cigarettes  
SUVs
 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.
 Additional amount of Rs.2,284 crore proposed over Interim B.E.
2009-10 for construction of fences, roads, flood lights on the
international borders.
 Additional amount of Rs 2544 crore proposed for the period of
2010- 2011 construction of fences, roads, and flood lights on the
international borders.
 We estimate overall infrastructure development for:
 Road transport: it would increase 16 % from RS.19894 to
RS.20490 crore.
 Railways: it would increase from rs.16752 to rs.18520 crore.

India Infrastructure Finance Company Limited (IIFCL)

 IIFCL’s 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.
 Industry
 The budgetary allocation to the Market Development Assistance
Scheme introduced to support exporters in developing new markets
will be enhanced by 148% over the budgetary estimates in 2009-
10to INR 1.2 billion.
 The interest subvention of 2% on pre-shipment credit for textiles
including handlooms, handicrafts, carpets, leather, gems and
jewellery, marine products and small and medium exporters is
proposed to be extended beyond the deadline of 30 September
2009 to 31 March 2010.
 The stimulus package announced in February 2009 for the Print
Media will be extended by another six months from 30 June 2009
to 31 December 2009.
 The Government will set up an expert group to advice on a viable
and sustainable system of pricing petroleum products.

Others
 The Unique Identification Authority of India will set up an online
database for storing identity and biometric details of Indian
residents and provide enrolment and\ verification services across
the country with the first set of unique identity numbers being
rolled out in 12 to 18 months. The Government will allocate INR
1.2 billion for the project.
 The Government will allocate INR 8.27 billion for setting up one
Central University in each uncovered state. The Government will
allocate INR 21 billion for IITs and NITs which includes a
provision of INR 4.5 billion for new IITs and NITs. The overall
plan budget for higher education is proposed to be increased by
INR 20 billion over the interim budget estimates.
 Imports/ Exports
 The all-in-cost ceiling in respect of import trade credits up to three
years has been increased to 200 basis points over six months
LIBOR for respective currency of credit or applicable benchmark.
 The limit for advance remittance for all admissible current account
transactions for import of services, without bank guarantee, has
been increased from USD 100,000 to USD 500,000 or its
equivalent, subject to specified conditions.
 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
and estimated Rs 22,300 crore for 2010-11.
 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%

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.

 The Government will increase the budgetory allocation to Bharat

Nirman program, aimed at building rural infrastructure (roads,
houses, irrigation) and bringing basic amenities (water supply,
electricity, telecom) to rural India, by 45% over the budget
estimates of 2008-2009 to 2010-2011.

 The Government will allocate a sum of INR 2,000 crore for Rural
Housing Fund in the National Housing Bank to broaden the pace
of rural housing.

 The finance minister announced launching of a new scheme called

Pradhan Mantri Adarsh Gram Yojana .A new scheme with an
allocation of INR 1 billion called Pradhan Mantri Adarsh Gram
Yojana will be launched on a pilot basis, for the integrated
development of 1000 villages where the population of scheduled
 castes is above 50%.on successful implementation of the pilot
phase, the scheme will be extended in the coming year.

Urban Development and Housing

 Allocation for urban development will increase 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 % interest subvention on housing loan up to 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.

 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.
 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.

Unorganized Sector

 National Social Security Fund for unorganized sector

workers National Social Security Fund for unorganized 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.

  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.

Defense and security

 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.
 Social welfare

 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.

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.

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 orthopedic implants

exempted from import duty.
 TAX PROPOSAL ARE AS FOLLOWS

1. Personal tax rates:

2. Tax rates for partnership firm.

Rates of tax for partnership firm remain unchanged. Existing surcharge
of 10% will be deleted.
3. Corporate tax rates
Rates of corporate tax remain unchanged for both domestic and foreign
companies. MAT (minimum alternate tax) will be increased from 10%
to 15%. The corporate tax rates including surcharge and education cess
have been summarized below:
Minimum alternate tax (MAT) to be increased 18%, the period allowed
to carry forward the text credit under the MAT will remain unchanged.
 EXEMPT INCOME:

Receipt of anonymous donations

Presently, anonymous donations received only by wholly religious
entities are exempt from tax. Partly religious and partly charitable
entities are also exempt from taxation of anonymous donations except
where the anonymous donation is made to an educational or medical
institution run by such an entity in which case donations are taxed at the
rate of 30%. In case of wholly charitable entities, all anonymous
donations are taxed at the rate of 30%.
Now, in case of partly religious and partly charitable institutions,
anonymous donations towards a medical or educational institution run
by such entities shall be taxable only to the extent such donations exceed
5% of total income of such institution or sum of INR 100,000,
whichever is more.
 Income from other sources
 Taxation of transactions without consideration or for an inadequate
consideration by individuals and HUF
 Where immovable property or any other property is received
without any consideration and the stamp duty value (in case of
immovable property)/ fair market value (in case of any other
property) of such property exceeds
 INR 50,000, the entire stamp duty value or fair market value (as
the case maybe) of such property would be taxable as income from
other sources.
 Where immovable property or any other property is received for a
consideration and such consideration is less than the stamp duty
value (in case of immovable property)/ fair market value (in case
of any other property) of the property by an amount exceeding INR
50,000, the stamp duty value/ fair market value reduced by the
consideration received, would be taxable as income from other
sources.
 Interest received on compensation or enhanced compensation will
be deemed to be income under the head income from other sources
for the year in which it is received, irrespective of the method of
accounting followed. Further, a deduction of 50% of such amount
will be allowed.
 Indirect tax

Customs duty
Policy changes
 Peak rate of basic customs duty remains unchanged in the financial
year 2010-2011.
 Refund of customs duties on imported goods to be allowed, if the
goods are found to be defective or not confirming to the
specifications of the buyer and the seller, subject to specified
conditions.
 Custom duty of 6% to be imposed on set top box for television
broadcasting in the financial year 2010-2011.
 Custom duty on LCD panels for manufacture of LCD televisions to
be increased from 5% to 10% in the financial year 2010-2011.
 Custom duty on bio-diesel to be reduced from 2.5% to 2%,
 Custom duty on serially numbered gold bars (other than tola bars.)
and gold coins to be increased from Rs. 250 per/gm to RS.350
per/gm in the financial year 2010-2011.
 Custom duty on silver has increased from Rs. 500 per/kg to
RS.1000 per/kg and it will remain unchanged in the financial year
2010-2011.

Service Tax

Services to be imposed on the following services:-

1. Service to be provided to transport of goods by rail.

2. Service provided in relation to transport of coastal cargo and goods

through inland water including national waterways.
3. Advice, consultancy or technical or assistance provided in the field
of law (this tax would not be applicable in the case of the service
provider or service receiver is an individual.

4. Cosmetic and plastic surgery service.

CENTRAL EXCISE DUTIES

 Excise duty rate on items currently attracting 4% to be raised to

8% with certain exceptions.

 Specific component of excise duty applicable to large cars/utility

vehicles of engine capacity 2000cc and above to be reduced from
Rs.20, 000 per vehicles to rs 15,000 per vehicles.

 Excise duty on petrol driven trucks/lorries to be reduced from 20%

to 8%.

 Excise duty on chassis of such trucks/lorries to be reduced from

20% to 8%

 Excise duty for manmade natural fibres other than pure cotton,
beyond the fibres and yawn stage, to be increased from 4% to 8%
under the existing optional schemes.

 Excise duty on branded articles of jewellery to be reduced from

2% to NIL.
 Budget (2010-11) Aims at Inclusive Growth

National Food Security Act

National Food Security Act to be brought in to ensure

entitlement of 25 kilo of rice or wheat per month at Rs.3 per kilo to
every family living below the poverty line in rural or urban areas.
Food Security Bill to be put on the website of the Department of
Food and Public Distribution for public debate.

National Rural Employment Guarantee Scheme (NREGS)

Allocation under NREGS increased by 144 per cent to Rs.39, 100

crore in B.E. 2009-10 over B.E. 2008-09. To increase productivity of
assets and resources under NREGA, convergence with other schemes
relating to agriculture, forests, water resources, land resources, rural
roads initiated. In the first stage 115 pilot districts selected for
convergence.

Pradhan Mantri Adarsh Gram Yojana (PMAGY) New scheme

Pradhan Mantri Adarsh Gram Yojana (PMAGY) with an allocation of
Rs.100 crore launched on pilot basis for integrated development of 1000
villages having population of scheduled castes above 50 per cent.

Global tax update

As the global economy continues to struggle, more and more countries
are turning to discretionary fiscal stimulus to boost overall demand and
restart the flow of credit. While spending measures have received more
mainstream attention over the last few months, tax measures actually
represent the majority of the net effect of fiscal stimulus, according to
recent estimates. In an increasingly global and interconnected tax arena,
new stimulus driven tax provisions are being rolled out around the world
affecting every aspect of the tax function.

Employment Generation

SSI Sector in India creates largest employment opportunities for the

Indian populace, next only to Agriculture. It has been estimated that a
lakh rupees of investment in fixed assets in the small scale sector
generates employment for four persons.

According to the SSI Sector survey conducted by the Ministry and

National Informatics Centre with the base year of 1987-88, the
following interesting observations were made related to employment in
the small scale sector. 

Generation of Employment - Industry Group-wise 

 
Food products industry has ranked first in generating employment,
providing employment to 4.82 lakh persons (13.1%). 
 
The next two industry groups were Non-metallic mineral products with
employment of 4.46 lakh persons (12.2%) and Metal products with 3.73
lakh persons (10.2%). 
 
In Chemicals & chemical products, Machinery parts and except
Electrical parts, Wood products, Basic Metal Industries, Paper products
& printing, Hosiery & garments, Repair services and Rubber & plastic
products, the contribution ranged from 9% to 5%, the total contribution
by these eight industry groups being 49%. 
In all other industries the contribution was less than 5%. 
 

Per unit employment  

 
Per unit employment was the highest (20) in units engaged in
Beverages, tobacco & tobacco products mainly due to the high
employment potential of this industry particularly in Maharashtra,
Andhra Pradesh, Rajasthan, Assam and Tamil Nadu.  
 
Next came Cotton textile products (17), Non-metallic mineral products
(14.1), Basic metal industries (13.6) and Electrical machinery and parts
(11.2.) The lowest figure of 2.4 was in Repair services line.  
 
Per unit employment was the highest (10) in metropolitan areas and
lowest (5) in rural areas.  
 
However, in Chemicals & chemical products, Non-metallic mineral
products and Basic metal industries per unit employment was higher in
rural areas as compared to metropolitan areas/urban areas.  
 
In urban areas highest employment per unit was in Beverages, tobacco
products (31 persons) followed by Cotton textile products (18), Basic
metal industries (13) and Non-metallic mineral products (12). 
 
Rural  
 
Non-metallic products contributed 22.7% to employment generated in
rural areas. Food Products accounted for 21.1%, Wood Products and
Chemicals and chemical products shared between them 17.5%.  
 

Urban  
 
As for urban areas, Food Products and Metal Products almost equally
shared 22.8% of employment. Machinery and parts except electrical,
Non-metallic mineral products, and Chemicals & chemical products
between them accounted for 26.2% of employment.  
 
In metropolitan areas the leading industries were Metal products,
Machinery and parts except electrical and Paper products & printing
(total share being 33.6%). 
 
State-wise Employment Distribution  
 
Tamil Nadu (14.5%) made the maximum contribution to employment.
This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and
West Bengal (8.5%) the total share being 27.7%.  

Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%), and Punjab

(5.6%) together accounted for another 27.4%.  
Per unit employment was high - 17, 16 and 14 respectively - in
Nagaland, Sikkim and Dadra & Nagar Haveli.  
It was 12 in Maharashtra, Tripura and Delhi.  
Madhya Pradesh had the figure of 2. In all other cases it was around the
average of 6.  
 

BUDGET OVERVIEW 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 Government’s fiscal accounting.
We would lastly conclude that BUDGET plays a very important
role in knowing the country’s economic status. Also we would
like to conclude that, while preparing BUDGET we came to
know many things. It has really helped us in enhancing our
knowledge and moreover we came to know that how our
country is progressing and the taxes and other duties paid by a
common man are being properly utilized or not..
FOR MAKING THIS PROJECT, WE HAVE
TAKEN THE HELP OF THE FOLLOWING
WEBSITES:-
1) www.google.com
2) www.wikipedia.com

3) www.scribd.com

4) www.management paradise.com

5) www.ask.com

6) www.economy watch.com
7) www.economic times.com

8) www.zeninvestor.org.economy