Budget 2010
Ø Fiscal Deficit for 2010-11 – 5.5 % of GDP ( to be brought down to 4.8 % and 4.1 % in next two fiscal years. Revised Estimate for Fiscal Deficit for 2009-10 is 6.9%
Ø GDP growth expected to be at 7.2 % and could be higher when Q3 and Q4 are taken into account
Ø Disinvestment to fetch Rs. 25,000 Cr
Ø Challenges before the Government
1. Quickly revert to 9 % GDP growth and then aim for double digit growth
2. Make growth inclusive
3. Strengthen food security
4. Overcome weakness in government’s public delivery system.
Ø Corporate Sector
· MAT rate increased from 15% to 18 %
· Surcharge rates reduced from 10% to 7.5 % on Corporate income tax
· Threshold limits for TDS to be rationalised
Ø Personal Taxation –
· Tax Slabs Broadened
- Exemption limit retained at Rs 1.6 Lakh
- Income from Rs. 1.6 Lakh to Rs. 5 Lakh to be taxed @ 10 percent ( currently it is up to Rs. 3 Lakh)
- Income from Rs. 5 Lakh to Rs. 8 Lakh to be taxed @ 20% percent ( currently it is from Rs. 3 Lakh to Rs. 5 Lakh)
- Income above Rs. 8 Lakh to be taxed @ 30 percent ( currently it is Rs. 5 Lakh)
· Additional Rs.20,000 deduction for investment in infrastructure bonds
Ø Simplified Tax Administration
- Direct Tax Code to be implemented from 1st April 2011
- GST also planned to be implemented from April 2011
- IT returns forms for individual tax payers to be further simplified
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Two more Central Tax Procession Centres to be set up ( in addition to present one at
Ø Excise Duty
· General Excise Duty raised from 8 % to 10%
· Higher Excise Duty on – Large Cars, SUVs, MUVs, Smoking and non-smoking tobacco
Ø Custom Duty
· Peak custom duty remains at 10 percent
· Cut on import duty on photovoltaic units
· Lower import duty on – select road project equipments, LED Lights,
Ø Service Tax
· Service Tax remains unchanged
· New services brought under service tax net
· News Agencies exempted from service tax
Ø Infrastructure Sector
· 46% of Plan Expenditure allocation in 2010-11 will be for infrastructure development.
Ø Power & Energy
· Coal Regulatory Authority to be set up. Competitive bidding for Coal Blocs.
· National Clean Energy Fund to be established.
· Kirit Parekh Report on Fuel Price deregulation to be taken up by the Ministry of Petroleum in due course
Ø Exports
· Government to continue interest subvention of 2% for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.
Ø Agriculture
· Draft Food Security Bill prepared and will be put in the public domain
· Participation of private sector in grain storage to continue for another 2 years
· New Fertilizer Policy from April 2010 which will to improved productivity and farm income
· Five more Mega Food Procession Projects in addition to 10 existing ones
· ECB available for cold storage
Ø Rural Economy
· Debt Repayment period extended to June 2010.
Ø Banking & Financial Sector
· Banking facilities to be provided to all habitations with a population of 2000 and more
· Apex Level Financial Stability Council to be set up for Banking Sector
· Additional banking licenses to be given to private players / NBFCs
· Further capital to Region Rural Banks to be provided.
· Further capital infusion in PSU banks to maintain Tier –I Capital Adequacy Ration
Ø Social Security
· National Social Security Fund to be created in unorganised sector with allocation of Rs. 1000 Cr.
· Govt to contribute Rs. 1000 /- for each National Pension Scheme Account opened by workers in the unorganised sector
Ø Tourism
· Rs. 200 Cr special package to
· Investment linked tax deductions
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