Finance Minister P Chidambaram has presented the Interim Budget for the year 2014-15. This is not the actual Union Budget, which will be tabled in the month of July, 2014, after the new Government takes over. Interim Budget has been presented so that the government keeps on functioning for the next 4 months, before the actual Union Budget is prepared.
As this would be the last budget presented by the UPA government, Chidambaram has played very safely here. No major taxes or tax related change has been announced, except the big one: Excise Duty has been slashed from 12% to 10% which will benefit importers and exporters of various goods and services. Blood banks have also been exempted from service tax.
The economic story of the country had hit this decade’s minimum at 4.5% GDP growth during 2012-13 financial year. Our Finance Minister has assured us that for this year, we will achieve GDP growth of 4.9%, which is certainly one of the positive announcements. Another positive news is that we will contain the Current Account Deficit (CAD) to $45 billon this year, which had touched $88 billion last year.
The Finance Minister also said, “I am happy to inform the House that we expect to add about USD 15 billion to the foreign exchange reserves by the end of the financial year.”
Major Highlights of the Interim Budget 2014-15
Taxation
- Excise duty on consumer durables slashed from 12% to 10%
- Excise duty to be cut by 2% for Capital Goods & Consumer Durables
- Reduction in excise duty for auto sector
- Excise duty reduced for small cars from 12% to 8%
- Excise duty reduced for SUVs from 30% to 24%
- Excise duties on bikes/2 wheelers down to 8%
- Blood banks to be exempt from service tax
- Rice transport and process exempted from service tax
Others
- USD 15 billion will be added to forex
- Agriculture GDP growth is estimated at 4.6%
- Even after the slowdown the savings rate was 31% in 2012-13
- Govt sees investment rate at 34.8%; saving rate at 30.1%
- Food production estimated at 263 million tonnes
- Agricultural credit in FY14 at 7.35 lakh crore Vs 7 lakh crore aim
- Exports are pegged to grow to $326 bn; up 6.4%
- Cabinet panel cleared 296 projects by end of January
- Aim to create 1 million jobs
- 7 new airports under construction
- GDP fell to 4.4% from 7.9% in nine quarters
- GDP growth in Q3, Q4 FY14 seen at 5.2%; FY14: 4.9%
- Food Security Act ensures food to 67% of population
- PSU Capex seen at Rs 2.6 lakh cr in FY 14
- FY 15 investment rate target at 34.8%
- 29350 mw off power capacity added
- 3343 km on new rail tracks
- 19 oil blocks were given out for exploration and 7 new airports are under construction
- FY’14 GDP growth seen at 4.9%
- FY 15 central assistance to sates at Rs 3.38 lakh crore
- FY 15 Agri GDP at 4.6%
- Proposal to star mega solar power projects in FY 15
- Chennai-Bangalore, Bangalore-Mumbai an Amritsar-Kolkata the stalled power capacity has been augmented
- Central assistance to states will increase from 1.36 lakh crore in 2013-14 to 3.38 lkah crore
- 100 crore for community radio, Rs 1200 crore additional assistance to NE, Himanchal, Uttarakhand
- Exports have recovered sharply, Exports are expected to grow to $326 billion, up by 6.4%
- 10 crore Jobs will be created in next 10 years through industrial corridors
- Power sector to add 50,000 MW
- Another Rs 100 cr for Nirbhaya fund for women’s safety
- Rs 200 crore Venture Fund with IFCI
- 57 crore Aadhar cards given out
- Planned expenditure FY 13-14 kept same as proposed earlier of Rs 5.55 lakh crore
- Merchandise export to grow by 6.8 pc to $326 billion
- Coal production grew to 554 million tonnes Vs 361 mn tonnes over the decade
- Railways to get budgetary support of Rs 29,000 crore
- GDP growth rate in Q3 and Q4 of 2013-14 will be at least 5.2 %
- Food, fuel subsidy at Rs 2.46 lakh crore
Budget allocations:
- Minority affairs – Rs 3711 crore
- Tribal affairs – 4379 crore
- Housing and poverty alleviation – 6000 crore
- Social welfare- 6730 crore
- Panchayati raj – 7000 crore
- Drinking water and sanitaion – 15000 crore
- Women and child development – 21000 crore
- Human Resource Development – 67398 crore
- Rural development – 82202 crore
- Railways – 29000 crore
- Non plan expenditure – 127892 crore
- Fuel subsidy – Rs 65000 crore
- Food, fuel subsidy at Rs 2.46 lakh crore
- FY 15 non-planned expenditure at Rs 12.07 lakh crore
- Defence allocation raised by 10%
- Urban Housing allocation Fund ay Rs 2000 crore
- No of bank accounts of minority community up to 42 lakh from 14 lakh 10 years ago
- Interest relief on students loans from PSU banks
- Government accepts in principle one rank one pension policy
- Govt liberalized Forex, ADR, GDR markets
- Defence allocation at Rs 2,24,000 crore
- Ministry of Health and Family Welfare gets Rs. 33,725 crore
- North East states to get Rs 1,200 crore this fiscal
- Rs 100 crore for community radio
- Banks to lend Rs 8 lakh crore
- FY15 PSU bank recapitalization at Rs 11200 crore
While these are some of the major highlights, it is only a partial update. You can check out the entire budget overview here.
