Union Budget 2013-14 presented by Finance MinisterFinance Min P Chidambaram announced a sharp increase of Rs 1.25 lakh crore in agriculture credit target to Rs 7 lakh crore for next fiscal and allocated additional Rs 10,000 crore in subsidy for implementing the Food Security Bill.
Following are some of the key highlights of the Union Budget 2013-14 presented by Finance Minister P Chidambaram in Parliament.
*No change in income tax slabs
*Relief of Rs 2,000 for tax payers in tax bracket of Rs 2-5 lakh
*10 pc surcharge on persons with taxable income of over Rs 1 crore
*Tobacco products, SUVs and mobile phones to cost more
*Income limit under Rajiv Gandhi Equity Savings Scheme raised to 12 lakh from Rs 10 lakh
*First home loan of up to Rs 25 lakh to get extra interest deduction of up to Rs 1 lakh
*Duty free limit of gold import increased to Rs 50,000 for male passengers and Rs 1 lakh for female passengers
*India’s first women’s bank to be set up by October
*Concessional six per cent interest on loans to weavers
*Rashtriya Swasthya Bima Yojana benefit extended to rickshaw pullers, auto and taxi drivers, among others
*’Nirbhaya Fund’ of Rs 1,000 crore to empower women and provide safety in the wake of Delhi gang-rape incident
*Fiscal deficit for 2013-14 pegged at 4.8 pc of GDP and 5.2 per cent in 2012-13
*Market borrowings pegged at Rs 6.29 lakh crore, higher
than Rs 5.59 lakh crore in FY13
than Rs 5.59 lakh crore in FY13
*Disinvestment target more than doubled to Rs 55,814 cr
*Plan expenditure pegged at Rs 5,55,322 crore and non-Plan at Rs 11,09,975 crore
*New taxes to collect Rs 18,000 crore for government
*Voluntary Compliance Encouragement Scheme launched for recovering service tax dues
*Rs 14,000 crore earmarked for capital infusion in public sector banks in 2013-14
He also allocated 22 percent more funds to Agriculture Ministry at Rs 27,049 crore for the 2013-14 fiscal, of which Rs 3,415 crore has been earmarked for farm research.Budget quote of Mr. Aneesh Srivastava, CIO, IDBI Federal.
Chidambaram announced extension of interest-subvention on crop loans to private sector banks and commercial banks.
“Agricultural credit is a driver of agricultural production. We will exceed the target of Rs 5,75,000 crore fixed for 2012-13. For 2013-14, I propose to increase the target to Rs 7,00,000 crore,” Chidambaram said while presenting the Budget for the 2013-14 fiscal in the Lok Sabha on Thursday.
The interest-subvention for short-term crop loan will be continued and farmers who repay loan on time will be able to get credit at 4 percent interest per annum, he added.
“So far, the scheme has been applied to loans extended by public sector banks, Regional Rural Banks and cooperative banks, I propose to extend the scheme to crop loans borrowed from private sector banks and scheduled commercial banks in respect to loans given within the service area of the branch concern,” the Minister said.
Looking at the success of the scheme — Bringing Green Revolution in the Eastern India, Chidambaram allocated Rs 1,000 crore for the next fiscal.
Another Rs 500 crore was allocated for crop diversification in states covered during the Green Revolution such as Punjab and Haryana, which are facing stagnation in farm yields.
On proposed Food law, the Minister said: “I sincerely hope Parliament will pass the Bill as early as possible. Over and above the normal provision for food subsidy, I have set apart Rs 10,000 crore towards the incremental costs that is likely under the Act.”
Fiscal deficit for 2012-13 estimated at 5.2%: Chidambaram
The fiscal deficit for the current financial year has been contained at 5.2 percent of GDP, lower than 5.3 percent as was targeted, Finance Minister P Chidambaram said.
“The fiscal deficit for 2012-13 has been contained at 5.2 per cent. I propose to bring it down to 4.8 per cent by 2013-14,” Chidambaram said while unveiling Budget 2013-14 proposals in the Lok Sabha.
Further, the Revenue Deficit has been contained at 3.9 percent in the current fiscal and would be brought down to 3.3 percent in 2013-14.
As per the fiscal consolidation roadmap, the government plans to reduce fiscal deficit to 3 percent by 2016-17.
“We must redeem our promise and bring down the fiscal deficit to 3 per cent and revenue deficit to 1.9 per cent by 2016-17,” Chidambaram said.
Tax benefits in RGESS extended to 3 years: Chidambaram
While presenting the Budget 2013-14 in the Lok Sabha Finance Minister P Chidambaram on Thursday proposed liberalising the Rajiv Gandhi Equity Savings Scheme (RGESS) to enable first time investors to park funds in MFs and listed shares and extended tax benefits to three successive years.
Also, the limit for investors wanting to invest in RGESS has been raised to Rs 12 lakh from Rs 10 lakh earlier.
The RGESS will be liberalised to enable first time retail investors to invest in mutual funds and listed shares and not in one year alone, but for three successive years, Chidambaram said.
The RGESS, which was originally announced in the Budget for 2012-13, seeks to provide tax benefits to first-time investors in stock markets. Under the scheme, an individual with an income of less than Rs 12 lakh would get tax incentives for investing up to Rs 50,000 in the stock market.
An insipid budget
The Union Budget for 2013-14 seems to be a populist one that neither creates any impact on the economy, nor does it address the long-term growth needs.
While the Budget may prove to be positive for FIIs as they can now invest in corporate & government bonds as collateral to meet margin requirements, the Tax Residency Certificate has again become an issue.
The piecemeal perks in some sectors are just not enough to accelerate growth. India continues to face the challenge of getting back to its potential growth rate of 8% along with bringing down inflation. The target to achieve a higher growth rate and a decrease in fiscal deficit looks unlikely in these conditions. The Budget also does not give any direction to address the issue of high current account deficit. The expenditure programme announced by the government would actually be inflationary.