Smita

1
Budget Making Process

Stage I
1. An Estimation of Expenditure is made by various Ministries.
2. An estimation of Plan expenditure is prepared by the Planning
commission.

Stage II
1. An Assessment of Revenue receipts and apital receipts is made
by the Revenue Secretary.

Stage III
1. !irst estimates of "eficit are prepared.

Stage IV
1. #he #ax rates are revised or ne$ taxes are proposed.
2. Expenditures are ad%usted.
2
How Budget is prepared?

&o$ the 'ndian (udget is prepared ) Sify*com.htm
3
Revenue Receipts and Revenue
Expenditure

Tax Revenue
1. 'ncome #ax
2. orporate #ax
+. ,ealth tax
-. entral Excise "uties
.. ustom duties
/. Service #ax and others.

Non Tax Revenue

1. 'nterest Receipts
2. "ividend and profits of
PS0s1 and other
government bodies

Non Plan Expenditure

1. 'nterest Payments
2. "efence payments
+. Subsidies
-. Pension
.. Postal "eficit
/. Expenditure on Economic2
3eneral and social
services etc.

Plan Expenditure
4
Current Tax Rates2!!"#
!$%

current tax rates.htm

&
Revenue Receipts o' Centra(
)overn*ent
+n Crores%
Head
Head
1$&!#&1
1$&!#&1
1$"!#
1$"!#
"1
"1
2!!1#!2
2!!1#!2
2!!,#!-
2!!,#!-
Budget
Budget
2!!"#!$
2!!"#!$
Budget
Budget
Tax
Tax
Revenu
Revenu
e
e
3&-
3&-
$.3$!
$.3$!
1.33.,,
1.33.,,
!
!
3.2-.2!
3.2-.2!
!
!
&.!-.1&
&.!-.1&
!
!
/on
/on
#Tax
#Tax
Revenu
Revenu
e
e
4$
4$
3.44!
3.44!
,-.-$!
,-.-$!
-,.2,!
-,.2,!
$&.-"&
$&.-"&
Tota(
Tota(
4!,
4!,
12."3!
12."3!
2.!1.4&
2.!1.4&
!
!
4.!3.4,
4.!3.4,
!
!
,.!2.$3
,.!2.$3
&
&
,
Centra( govern*ent#Tax Revenue
+n Crores%
Head Head 1$&!#&1 1$&!#&1 2!!1#!2 2!!1#!2 2!!,#!- 2!!,#!-
Budget Budget
2!!"#!$ 2!!"#!$
Budget Budget
+nco*e Tax +nco*e Tax 14! 14! 32.!!! 32.!!! --.41! --.41! 1.3".314 1.3".314
Corporate Corporate
Tax Tax
4! 4! 3,.,1! 3,.,1! 1.33.!1! 1.33.!1! 2.2,.3,1 2.2,.3,1
0t1er 2irect 0t1er 2irect
taxes taxes
# # 4&! 4&! 1&! 1&! 32& 32&
Excise Excise
2uties 2uties
-! -! ,".&3! ,".&3! 1.1$.!!! 1.1$.!!! 1.3-."-4 1.3-."-4
Custo* Custo*
2uties 2uties
1,! 1,! 4-.&4! 4-.&4! --.!-! --.!-! 1.1".$3! 1.1".$3!
3ervice tax 3ervice tax # # 2.,1! 2.,1! 34.&!! 34.&!! ,4.4,! ,4.4,!
-
Budget o' Centra( )overn*ent
Revenue 4ccount +n crores%
Head Head 1$&!#&1 1$&!#&1 1$"!# 1$"!#
"1 "1
2!!1#!2 2!!1#!2 2!!,#!- 2!!,#!-
5udget 5udget
2!!"#!$ 2!!"#!$
5udget 5udget
2!!"#!$ 2!!"#!$
4ctua( 4ctua(
Revenue Revenue
receipts receipts
4!, 4!, 12."3! 12."3! 2.!1.4&! 2.!1.4&!4.!3.4,! 4.!3.4,!,.!2.$3& ,.!2.$3&&.,2.1-3 &.,2.1-3
Revenue Revenue
Expenditure Expenditure
34- 34- 14.&4! 14.&4! 3.!1.,1! 3.!1.,1!4."".1$! 4."".1$!,.&".11$ ,.&".11$ # #
3urp(us6 3urp(us6
2e'icit 2e'icit
7&$ 7&$ #1.-1! #1.-1! # #
1.!!.1,! 1.!!.1,!
#"4.-3! #"4.-3! #&&.1"4 #&&.1"4 # #
"
Capita( Receipts and
Expenditure

Receipts
1. Recovery of 4oans
2. "isinvestment of
PS0s1
+. (orro$ings

Non Plan Expenditure
1. 4oans to States2 0#2
!oreign 3overnments
and PS01s.
2. "efence capital
expenditure

Plan Expenditure
$
Capita( Receipts6 Expenditure o'
Centra( )overn*ent
1$&!# 1$&!#
&1 &1
1$"!# 1$"!#
"1 "1
2!!1#!2 2!!1#!2 2!!,#!- 2!!,#!-
5udget 5udget
2!!"#!$ 2!!"#!$
Budget Budget
2!!"#!$ 2!!"#!$
4ctua( 4ctua(
Capita( Capita(
Receipts Receipts
12! 12! ".--! ".--! 1.,1.!!! 1.,1.!!! 1.,!.&3! 1.,!.&3! 1.4-.$4$ 1.4-.$4$ 3.3".-"! 3.3".-"!
Capita( Capita(
Expenditur Expenditur
e e
1"2 1"2 $.,3! $.,3! ,!."4! ,!."4! -&."!! -&."!! $2.-,& $2.-,& # #
3urp(us 6 3urp(us 6
2e'icit 2e'icit
#
,2 ,2 # ",! # ",! 7 7
1.!!.1,! 1.!!.1,!
7 "4.-3! 7 "4.-3! 7&&.1"4 7&&.1"4 # #
1!
3ources and 8ses o'
9unds !"#!$%

Source
1. orporation tax 5 2-6
2. ustoms 5 1+6
+. 7on tax Revenue 5 186
-. 7on)"ebt apital Receipts 5 26
.. 'ncome #ax )1.6
/. Service 9 :ther taxes 5 ;6
;. Excise 5 1.6
<. (orro$ings 9 other 4iabilities 5 1-6

Use
1. 'nterest 5 216
2. "efence 5 116
+. :ther non plan expenditure 5 186
-. Subsidies 5 <6
.. entral plan )1=6
/. State 9 0# Plan assistance 5 ;6
;. 7on plan assistance to states 5
.6
<. States1 share of taxes 5 1=6
11
4ctua(
Receipts6Expenditures

Receipts.htm

Expenditure.htm

entral Plan outlay by sectors.htm

12
2e'icit in Budget

Revenue Deficit = Revenue Rec. 5 Revenue Exp.

Capital Deficit = apital Rec. 5 apital exp.

Budget Deficit = #otal Exp. 5 #otal Rec.

iscal Deficit = #otal Exp. 5

>RR ? Recovery of 4oans ? "isinvestment !unds@

Pri!ar" Deficit = !iscal "eficit 5 'nterest

obligations of the government
13
2etai(s o' 4ctua( Budget

(udget at 3lance.htm

(udget288<)8=*speech.pdf
14
Budget 2!!"#!$ : Revised
Esti*ates
#ead $%%&'%( )Budget* $%%&'%( )Revised*
Revenue Receipts /A82A=+. .A/2A1;+
apital Receipts 1A-;A=-= +A+<A;<8
#otal Receipts ;A.8A<<- =A88A=.+
7on)plan Expenditure .A8;A-=< /A1;A==/
Plan Expenditure 2A-+A+</ 2A<2A=.;
#otal Expenditure ;A.8A<<- =A88A=.+
!iscal "eficit 1A++A2/;
>2..6 of 3"P@
2A-1A2;+
>/6 of 3"P@
1&
2e'icit 9inancing

T+e fiscal Deficit gap is filled ," govern!ent

,orro-ings fro! t+e follo-ing'
1. "omestic MarBet
2. External Sector
+. Reserve banB of 'ndia

Pro,le!s of deficit inancing'

1. 'ncrease in the government debt.
2. 'nflation
+. 'ncrease in consumption.
1,
;1at is 9RBM?

So!e targets to ,e ac+ieved ,"

$%%( no- Postponed to $%../
1. #o bring do$n !iscal "eficit to the level
of +6 of 3"P
2. #o completely eliminate Revenue
"eficit
1-
Hig1(ig1ts o' Budget
2!!"#!$
/8A888 r. 4oan $aiver for small and medium farmers having
holding siCe up to 2 hectare. Settlement >:#S@ for other.

'ncome tax slabs modified . 7o tax up to income of 1A.8A888. !or

!emales same up to income of 1A<8A888 and for senior citiCen up to
income of 2A2.A888.

orporate #ax rate unchanged. Surcharge and ess continues.

Short term capital gains tax up from 186 to 1.6.

7o change in Securities #ransaction #ax rate . S## currently paid is

allo$ed as a rebate against tax liability but from April 288< S## paid
$ill be treated liBe any other deductible business expense against
business income.

S## on options premium onlyA $here the option is not exercised and
burden $ill be on the seller.

'ntroduction of ommodities #ransaction #ax on :ptions and !utures

trades.
1"
Budget Hig1(ig1ts
Excise%
3eneral E7DA# on all goods do$n from 1/6 to 1-6.

Excise lo$ered on small carsA t$o $heelers Abuses and their

chassis> 1/6 to 126@.
Reduction in excise duty on all goods produced by the
Pharmaceutical sector from 1/6 to <6.

Reduced excise on paperA paper boards made from non)

conventional ra$ material>126 to <6@. Excise duty on $ritingA
printing and pacBaging paper reduced from 12 to <6.

Excise reduced from 1/6 to nil for $ireless data cardsA

PacBaged coconut $aterA #ea and offee mixesA Puffed rice.

7o excise on Anti A'"S drug and bulB drug used to manufacture

it.
1$
Budget Hig1(ig1ts<
Excise%

Reduced excise on $ater purification devicesA
DeneersA flush doorsA sterile dressing padsA
breaBfast cereals.

'ncrease in excise on pacBaged soft$are from <6

to 126.

&igher excise on non filter cigarettes.

Specific duty on unbranded Petrol and "iesel

instead of ad valorem tax.

7o excise on polyester filament yarn and 16

excise on cellular handsets.
2!
Budget Hig1(ig1ts
Custo* 2=%
4o$er

Pro%ect 'mports from ;..6 to .6.

Steel Melting Scrap .6 to 7il.

:n certain specified life saving drugsA (ulB "rugs

used to manufacture aboveA duty do$n from186
to .6.

4o$er duty on Animal feed mixtures>+86 to 286@.

4o$er duty on (actofuges >;..6 to 7il@

7o "uty on specified parts of set top box and

certain ra$ materials used in '#2electronic industry.

7o duty on &elicopter simulators.

4o$er duty on crude and unrefined sulphur >.6 to

26
21
Budget Hig1(ig1ts <=

7o ""# on Parent company on dividend received from subsidiary
company and distributed by it.

(## done a$ay $ith.

apital 3ains #ax on corporate acEuisitions in 'ndia.

Service #ax exemption limit up from income of Rs.< laBhs per annum
to Rs. 18 4aBhs per annum.

Service tax on StocB and commodity exchangesA MoneychangersA

AM providing 04'PA persons running game of chance etc.

Reverse mortgage scheme encouraged.

7o !(# on crFche facilitiesA sponsorship of employee)sportspersonA

organiCing sports events for employeesA and guest house facility.

entral Sales tax reduced from -6 #: +6

22
Budget +*p(e*entation

'mplementation Report.pdf
23
+nteri* Budget 2!!$#1!
#ead $%%('.% )Interi! Budget*
Revenue Receipts /A8=A..1
Tax Revenue -A=;A.=/
Non Tax Revenue 1A11A=..
apital Receipts +A-+A/<8
Of Which Borrowings +A+2A<+.
#otal Receipts =A.+A2+1
Revenue Expenditure <A-<A8<.
apital Expenditure 1A8.A1-/
Revenue "eficit 2A+<A.+-
!iscal "eficit +A+2A<+.
Primary "eficit 1A8;A+2-
24
3ource and 8se o' 9unds
2!!$#1! % # >
1. orporation #ax 5 22
2. 7on #ax Revenue 5 18
+. ustoms 5 18
-. 'ncome #ax 5 12
.. Service #ax and :thers 5 /
/. Excise 5 18
;. 7on "ebt apital Receipt 5 1
<. (orro$ings ) 2=
1. 'nterest Payments 5 28
2. Subsidies 5 =
+. "efence 5 1+
-. 7on Plan Assistance to
States 5 -
.. :ther 7on Plan Expenditure 5
1-
/. entral Plan 5 1<
;. State and 0# Plan Assistance
5 ;
<. State1s Share of #ax ) 1.
2&

'nterim (udget Speech.pdf

2,
2!!$#1! : Budget
Hig1(ig1ts
1. 4aunch of t$o ne$ schemes 5 'ndira 3andhi 7ational
,ido$ Pension Scheme and 'ndira 3andhi 7ational
"isability Pension Scheme
2. 7ational Rural Employment 3uarantee Scheme 5
Allocation of Rs. +8A188 cr
+. Sarva ShiBsha Abhiyan 5 Rs. 1+A188 cr
-. Mid "ay Meal Scheme 5 Rs. <888 cr
.. 'ntegrated hild "evelopment Scheme 5 Rs. /A;8. cr
/. Allocation under Ga$aharlal 7ehru 7ational 0rban
Rene$al Mission ) Rs. 11A<-2 cr.
2-
2!!$#1! : Budget
Hig1(ig1ts
;. Ra%iv 3andhi Rural "rinBing ,ater Mission 5 Rs. ;A-88 cr
<. #otal Rural Sanitation Programme 5 Rs. 1A288 cr
=. 7ational Rural &ealth Mission 5 Rs. 12A8;8 cr
18. (harat 7irman 5 Rs. -8A=88 cr
11. 0niEue 'dentification Authority 5 Rs. 188 cr
12. R'"! 5 xv 5 Rs. -888 cr
1+. 'nterest subvention of 26 on pre)post shipment credit for
certain employment oriented export sectors 5 Rs. .88 cr
1-. Allocation for "efence 5 Rs. 1A-1A;8+ crore out of $hich Rs.
.-A<2- crore for the capital expenditure.
2"
9isca( 3ti*u(us Package

"ecember ;A 288<
1. E7DA# Rates reduced by -6 across the board
2. 'ndia 'nfrastructure !inance o. authorised to raise
Rs. 18A888 crore
+. Additional Rs. 1A-88 cr to clear #echnology 0p
gradation !und bacBlog
-. PS0 (anB &ome 4oan PacBage in t$o categories
5 8). laBh and .)28 laBh
.. 'mport duty of 7aptha completely lifted
2$
9isca( 3ti*u(us Package

iscal Sti!ulus/ $ 0anuar"1 $%%(

1. E( Relaxation of 3uidelines $ith removal of cost
cap on borro$ings.
2. 4iEuidity Support to 7(!1s 5 2.A888 crore
+. &igher redit #argets for PS0 (anBs 5 Rs. ./A888
crore
-. Accelerated "epreciation for purchase of
commercial vehicles
.. Re)capitalisation of PS0 (anBs 5 Rs. 28A888 crore
3!
9res1 Tax Cut 4nnounce*ents?
9e5ruar@ 24. 2!!$
1. Service tax reduced from 126 to 186
2. Excise cut of 26 on goods that
attracted excise duty of 186 till no$.
+. 'mported 7aptha for po$er sector fully
exempted from custom duty beyond +1
st

MarchA 288=.
-. "uty on (ulB ement reduced
31