BUDGET 2007-08

Health, Education and Agriculture- Engines of growth-By Sisir Bajoria, MD, IFGL

FM seeks to Strengthen the provisions of section 40A(3) to plug tax evasion-By Narayan Jain

FM OFFERS SMALL RELIEF TO TAXPAYERS- By Narayan Jain

BUDGET HEADLINES -By-Sonu Jain


 

 

DIRECT  TAXES 

  • Income tax rates unchanged

  • Income tax exemption limit raised

  • Deduction in respect of medical insurance under Section 80 (D) increased to Rs 15,000 and Rs 20,000 for senior citizens.

  • Income tax limit not to be changed. Threshold limit raised by Rs     10,000 giving every assessee a relief of Rs 1,000.

  • Surcharge on Corporate income tax on companies below Rs one crore removed
     

  • BUDGET OVERVIEW- A MENU WITH A LITTLE SPICE
    Highlights and New Proposals  
     

    Rs 63 crore for share capital for National Minorities Development Finance Corporation following Sachar Committee recommendations.
    • Allocation for SC/ST scholarships enhanced from Rs 440 crore to Rs.611 crore.
    • Scholarships programme for minorities students to be of the order of Rs 72 crore for pre-metric, Rs 48 crore for graduate and postgraduate.
    • Total Budget for the Northeastern region raised from Rs 12,041 crore to Rs 14,365 crore.
    • New Industrial Policy for the northeastern region to be in place before March 31.
    • Women's development allocation will be Rs.22,282 crore.
    • Rs 7,000 crore allocation for better tax administration to be used for social schemes.
    • Rs 2,25,000 crore farm credit proposed in the new budget. A target of additional 50 lakh farmers to be brought under farm credit.
    • Farmers' credit likely to reach Rs.1,90,000 crore as against the targeted Rs.1,75,000 crore during 2006-07.
    • Special Purpose Tea Fund to rejuvenate tea production. (more) PTI ARC RKC 02281127 DEL Rs. 100 crore allocated for National Rainfed Area Authority.
    • One hundred per cent subsidy for small farmers and 50 per cent for other farmers for water recharging scheme.
    • World Bank signed agreement for revival of 5,763 waterbodies in Tamil Nadu. Loan component Rs 2,182 crore. To have a command area of four lakh hectares.
    • Similar agreement with Andhra Pradesh in March for recharge of 2,000 bodies. Command area 2.5 lakh hectares.
    • National Agricultural Insurance Scheme to be continued for Kharif and Rabi this year.
    • Bonds worth Rs 5,000 crore to augment NABARD to be issued.
    • Death and disability cover for rural landless families to be introduced, known as 'Aam Aadmi Bima Yojana'.
    • Allocation for schemes only for SCs and STs to be increased to Rs 3271 crore.
    • Computerisation of PDS and integrated computerisation programme for FCI.
    • Gross budgetary support in 2007-08 raised to Rs 2,05,100 crore from 1,72,728 crore in 2006-07. Of this, budgetary support to the Central plan will go up to 1,54,939 crore against 1,72,728 crore.
    • Allocation for AIDS control programme to be raised to Rs 969 crore.
    • School dropout rates high. To prevent dropout, a National Means-cum-Merit scholarship to be implemented, with an allocation of Rs 6,000 per child.
    • Rs 1290 crore to be provided for elimination of polio. Intensive coverage will be undertaken in 20 districts in UP and 10 districts in Bihar. This will be integrated into NRHM.
    • Rs 800 crore for Sampoorna Gram Rozgar Yojana in districts not covered by NREGA. Swarna Jayanti Swarozgar Yojana allocation increased from Rs 250 crore to Rs 344 crore.
    • National AIDS Control Programme to achieve zero level disease.
    • Measures for significant improvement of health care in rural area.
    • Allocation for ICDS programme to be increased from Rs 4087 crore to Rs 4761 crore.
    • 130 more districts under NREGA. Additional allocation of Rs.12,000 crore for it.
    • Government concerned over inflation and would take all steps for moderating it.
    • Already a number of steps on fiscal, monetary and supply management side have been taken.
    • Annual target of 15 lakh houses under Bharat Nirmal Programme to be exceeded.
    • Allocation for National Rural Health Mission stepped up from Rs 8207 crore to Rs 9947 crore.
    • 9.2 per cent GDP growth rate estimated in 2006-07.
    • Average growth for last three years is 8.6 per cent.
    • Saving rate of 32.4 per cent, investment rate of 33.8 per cent will continue.
    • A number of proposals to perk up agriculture to be announced.
    • Bank credit rate grew by 29 per cent during first ten months of 2006-07.
    • Inflation during 2006-07 estimated at between 5.2 and 5.4 per cent against 4.4 per cent during the previous year.
    • Fertilizer, farm and food subsidy to be overhauled
    • Primary education outlay at Rs 10393 cr
    • No new forward contract to be launched on wheat and rice from today.
    • Abhijit Sen report on forward trading to be submitted in two months' time.
    • Additional irrigation potential of 24 lakh hectares to be implemented, including nine lakh hectares under Accelerated Irrigation Benefit Programme.
    • Economy in a stronger position than ever before.
    • Villages have been covered under rural telephony and efforts to be made to complete the target of covering 20,000 villages by 2006-07.
    • Allocation on Healthcare to increase by 21.9 per cent
    • Allocation for education to be enhanced by 34.2 per cent.
    • Two lakh more teachers to be employed and five lakh more classrooms to be constructed.
    • Secondary education allowance to be increased from Rs 1,837 crore to Rs.3,794 crore.
    • Government committed to fiscal reforms.
    • Foreign exchange reserves stand at 180 billion dollars.
    • Allocation under Rajiv Gandhi Drinking Mission stepped up from Rs 4680 crore to Rs 5850 crore.
    • Government concerned over inflation and would take all steps for moderating it.
    • Already a number of steps on fiscal, monetary and supply management side have been taken.
    • Annual target of 15 lakh houses under Bharat Nirmal Programme to be exceeded.
    • Allocation for National Rural Health Mission stepped up from Rs 8207 crore to Rs 9947 crore.


     

    Expert Comments

     

    Reaction of Industry and Others

    INDIRECT  TAXES - EXCISE/ CUSTOMS

     
    • Duty on pharma, biotech products cut.
    • Watch dials, umbrella parts duty cut to 5%
    • Pet foods duty reduced.
    • Import duty on medical equipments reduced.
    • Peak customs duty reduced to 10%.
    • Excise duty
    • Advalorem duty on petrol, diesel cut from 8% to 6%
    • Total expenditure estimated at Rs 6,81,521 crore
    • Increase in gross tax revenue by 19.9 per cent, 20 per cent and 27.8 per cent in first three years of UPA government. Intend to keep tax rates moderate.
    • Peak customs duty rate on non-agricultural items reduced from 12.5 to ten per cent.
    • All coking coal fully exempted from duty.
    • Duties on seconds and defective reduced from 20 to ten per cent

     

     
    SERVICE TAX
     
    OTHER  HIGHLIGHTS  OF  BUDGET 2007
     

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