Riding on economic revival, the Finance Minister on Friday announced major personal income tax sops but hiked excise duty from 8 per cent to 10 per cent across the board on non oil products as also duties on petrol and diesel in the Union Budget for 2010-11.
Rolling back partially the stimulus measures given in the wake of global meltdown, he announced proposals that would lead to costlier petrol and diesel from tonight as also make dearer cars, TVs, ACs, tobacco, cigarettes and cement among other items.
The Opposition dubbed the budget as "highly inflationary" and staged a rare walkout as Mukherjee read out proposals on petrol and diesel.
While raising an additional Rs 46,500 crore through changes in indirect taxes, Mukherjee said that his direct tax concession would lead to a revenue loss of Rs 26,000 crore despite an increase in Minimum Alternate Tax from 15 per cent to 18 per cent.
To bridge the gap in the budget that would still have a fiscal deficit of 5.5 per cent of GDP, he also brought in more areas like air journeys of all classes and rental into service tax net that would help him raise additional Rs 3000 crore. In all, net revenue gain is placed at Rs 20,500 crore.
The industry applauded the budget as "good and balanced" but for the hike in MAT, though manufacturers said that they would hike the prices of cars and white goods. Petrol and diesel would cost Rs 2.67 and Rs 2.58 a litre respectively in Delhi alone.
Mukherjee proposed a total expenditure of Rs 11,08,749 crore including Rs 3,73,092 on planned activities for which he would raise a non tax and tax revenue of Rs 6,82,212 crore leaving a deficit of Rs 3,81,408 crore, which would be bridged by borrowing.