Budget 2004-05: Highlights

Budget 2004-05: Highlights

Taxes and Excise duties

HT Image

* Annual income up to Rs 1 lakh to be exempt from tax
* No change in tax slabs
* Full exemption from excise duty on computers
* No excise duty on handlooms and powerlooms
* Withdrawal of CENVAT on textile, industry to have new tax regime
* No excise duty on dairy machinery, tractors and handtools
* Peak rate for customs duties to be retained at 20%
* Excise duty on steel raised to 12%, will also hit auto-industry
* Debt oriented mutual funds to be taxed
* Senior citizens to get 9% interest rate on small saving schemes
* Customs duties to be reduced in a structured manner, taxes to be aligned with ASEAN countries
* Customs duties on various health-realted items reduced or removed
* Gifts from unrelated persons above Rs 25,000 to be taxed
* Tonnage tax option for shipping companies
* No taxes on profits in all new agro-processing industries
* No income tax on family pension of widows of defence personnel
* Service tax net to be expanded

Budgetary estimates and allocations

* Total expenditure estimated at Rs 4,77,829 crore
* Planned expenditure estimated at Rs 1,45,590 crore; non-planned expenditure at Rs 3,32,239 crore
* Govt to raise defence allocation from Rs 65,300 crore to Rs 77,000 crore
* Fiscal deficit estimated as 4.4% of estimated GDP, revenue deficit at 2.5%
* Cess of 2% for education and midday meal programme
* Govt to set up Backward States Grant Fund with a corpus of Rs 25,000 crore to be provided over 5 years
* Loans to states to carry reduced interest rate of 9%
* Special economic package for Bihar, J&K and Northeastern states
* Bihar to get a package of Rs 3,225 crore
* Report on subsidies to be tabled in Parliament
* No change in existing interest rates on small savings
* Interest rates to be aligned to the market

Industry and Investment

* Subsidy assistance for SSIs to be raised from 12% to 15%
* 85 items to be taken out of small scale reserved list
* More credit to be made available to small scale and cottage industries
* Govt to divest stake in state firms to fund social schemes
* New bill on regulation of special economic zones
* FDI limit in telecom sector hiked from 49% to 74%
* FDI limit in civil aviation hiked from 40% to 49%
* FDI limit in insurance sector raised from 26% to 49%
* Govt to establish Investment Commission to attract foreign capital
* Port infrastructure to be developed
* Upgrading of 500 ITIs across the country
* Govt to enhance investment in industry to create more jobs

Agriculture and Rural Development

* Chidambaram announces food subsidy of Rs 25,800 crore
* Govt committed to give insurance to farmers
* Rs 40,000 crore to be made available to banks for lending to infrastructural projects
* Agricultural cooperatives to be encouraged
* Better price support and superior seeds for oilseed farmers
* Govt to launch national horticulture mission on the lines of the Anand model
* Doubling of agriculture credit in three years
* Rs 30,000 crore to be spent per year on water-related projects
* Rs 2,610 crore to be provided for rural drinking water
* New project to repair, renovate and restore all water bodies under special package for rural irrigation

General policy direction

* Chidambaram calls for 7-8% GDP growth
* Govt to follow a five-year roadmap to achieve common minimum programme
* Govt to provide more housing for people below poverty line
* Govt to ensure that children remain in school for at least eight years
* Govt to guarantee 100 days of work per year to at least one person from every family
* Chidambaram calls for focus on rural infrastructure
* Planning Commission to reorient approach to planned development
* Govt aims to eliminate revenue deficit by 2008-09
* Focus on agriculture and fiscal consolidation