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Union Budget 2013-14

Union Budget 2013-14

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Published by Ashima Aggarwal
Union Budget
Union Budget

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Published by: Ashima Aggarwal on Jun 19, 2013
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Union Budget 2013-14: A Recipe for Economic Recovery?

07 (Apr-Nov) 5.1 (4.. rising gold and coal imports.8) -4.9 8.7) 0.6 (Apr-Dec) 9. higher volatility in stock mkt.State of the Economy – Not a rosy scenario Key Indicators GDP Growth Rate (%) Savings Rate (as % GDP)* Industrial Growth (IIP %) Inflation (Overall) (%) Inflation (Food articles) (%) Inflation (Food products) (%) Fiscal Deficit (as % GDP) Current Account Balance/GDP(%)** 2010-11 9. low returns from stock mkt.12 5.6 3.36 (Apr-Nov) 8.3 7.6 (Apr-Jan) * The share of financial savings has been coming down as against physical savings.8 -2. Source: Economic Survey (2012-13) & Instructor's own calculations .73 4.3 34 8.2 30.9 7.2 2012-13 5 (6.8 2.1 to 6. high inflation leading to falling real income.2 9.6 15.7 -4. ** High CAD is due to rising cost of oil import (due to rupee depreciation). Reasons are low GDP growth.8 2011-12 6. and falling domestic savings leading to increased financing of domestic investment via external borrowing.7 (Apr-Dec) 7.

      Falling savings rate .Approach Prescribed in Economic Survey (2012-13) Problem Low economic growth  Solutions Shift national spending from consumption (read high fiscal deficit) to investment. [Note: Consumption-led growth was pursued during global meltdown in 2008-09] Remove the bottlenecks to investment. reforms Introduce inflation-indexed bonds and other attractive financial saving opportunities Attract savings towards productive assets such as infrastructure and equity mkts. especially infrastructure (like inter-ministerial tangles of clearances and procedural norms) Make efforts to reduce the cost of funds Removal of restrictions on FDI in legal and accountancy services and transport sector Labour mkt.

  .Problem High Inflation  High fiscal deficit      Current account deficit  Solutions Remove supply side bottlenecks [Significant part of inflation getting generated becoz. Control gold imports Increase domestic savings leading to falling external borrowing. of poor supply responses] Control demand via tight monetary policy Disfavor higher tax rates for the rich/increase in marginal tax rates. Higher tax rates encourage tax evasion & discourage taxable activities Widen the tax base Cut subsidies on petroleum products and fertilizers Better targeting and reduced leakages in subsidy delivery Address delays in obtaining environmental clearances. land acquisitions and rehabilitation for increasing domestic coal output thereby reducing coal imports.

On Capital Account Plan Expenditure 7A.Revised Estimates. Other Receipts 4C.Budget Estimates . Crore) S. BE . RE . No. 3. Borrowings and Other liabilities Total Receipts (1+4) Non-Plan Expenditure 6A. On Revenue Account 6B. 4 Components Revenue Receipts Tax Revenue (net to centre) Non-Tax Revenue Capital Receipts 4A. On Revenue Account 7B. Recoveries of Loans 4B. 1 2.Actuals. On Capital Account Total Expenditure (6+7) Revenue Expenditure (6A + 7A) Capital Expenditure (6B + 7B) Revenue Deficit (9-1) Fiscal Deficit {8-(1+4A+4B)} 2011-2012 (A) 751437 629765 121672 552928 18850 18088 515990 1304365 891990 812049 79941 412375 333737 78639 1304365 1145785 158580 394348 515990 2012-2013 (RE) 871828 742115 129713 558998 14073 24000 520925 1430825 1001638 919699 81939 429187 343373 85814 1430825 1263072 167753 391245 520925 204251 266970 2013-2014 (BE) 1056331 884078 172252 608967 10654 55814 542499 1665297 1109975 992908 117067 555322 443260 112062 1665297 1436169 229129 379838 542499 171814 205182 5 6 7 8 9 10 11 12 13 Primary Deficit (12-Interest Payments) 242840 Effective Revenue Deficit (11-Grants for 14 creation of capital assets) 261766 Note: A.Budget at a Glance (in Rs.

12 8 Total Expenditure (6+7) 9.08 7A.26 6B.29 6A.96 13 Primary Deficit (12-Interest Payments) -15. On Revenue Account 13.82 7.79 12 Fiscal Deficit {8-(1+4A+4B)} 0.14 16.Budget at a Glance (% Change over previous year) S.59 -2.70 36.96 5 Total Receipts (1+4) 9.14 .39 10. Tax Revenue (net to centre) 17. Borrowings and Other liabilities 0.56 4.39 29.02 2.59 16.88 -23.70 9 Revenue Expenditure (6A + 7A) 10.39 13.16 19. On Capital Account 9.50 7 Plan Expenditure 4.61 4 Capital Receipts 1.96 42. Components 2012-2013 (RE) 1 Revenue Receipts 16.89 7B. No. On Capital Account 2.24 10 Capital Expenditure (6B + 7B) 5.14 -15.29 132. Recoveries of Loans -25.70 6 Non-Plan Expenditure 12.99 2013-2014 (BE) 21.92 4.13 32. Non-Tax Revenue 6. Other Receipts 32.89 Effective Revenue Deficit (11-Grants for creation of 14 capital assets) 1.84 3.34 4B.94 -24.09 30. On Revenue Account 2.10 4A.68 4C.78 11 Revenue Deficit (9-1) -0.87 29.79 8.

200 crore for conversion of innovation into practical use.Agriculture • Rs 7 lakh crore target fixed for agri. • Eastern states (consisting of Bihar.000 crore for NABARD for agri storage facilities • Godowns to be constructed with help of panchayats • Proposal for setting up of a National Livestock Mission with a funding of Rs. • An institute for agricultural biotechnology will be set up in Ranchi. Jharkand. 5. Odisha and West Bengal) get Rs 1. 307 crore.75 lakh crore in the current year. credit for 2013-14 compared to Rs 5. • Rs 500 crore allocated for programme on crop diversification • Rs. The Mission will pay attention to animal nutrition by increasing the availability of feed and fodder. • Rs.000 crore allocation for improving agricultural production.Budget Proposals . Jharkhand • Funds for a National Institute of Biotic Stress Management at Raipur .

000 crore will be provided to public sector banks for capital infusion in 2013-14 • SIDBI’s re—financing facility to MSMEs to be doubled to Rs 10.000 crore • IIFC. 2016 Expenditure • Significant increase in the allocation for JNNURM (Rs 14. • Nearly Rs. excise rates • 5-10% surcharge on domestic companies whose taxable income exceeds Rs 10 crore • Commodities transaction tax levied on non-agriculture commodities futures contracts at 0. 56.873 crore in 2013— 14 against Rs 7.000 Cr.Budget Proposals .880 crore in the current fiscal) • New ports in West Bengal and Andhra Pradesh • Package of measures for textile industry • Rs.Industry Tax • No change in peak custom. in partnership with ADB will help infrastructure companies to access bond market to tap long term funds. is targeted to be mobilized through disinvestment . 14.1% • GAAR norms to be introduced from April 1.

) • Benefits or preferences enjoyed by MSME to continue up to three years after they grow out of this category • Two new industrial corridor projects [Bangalore-Chennai and Bangalore-Mumbai]. • Seven new smart cities will be set up • Regulator to give boost to road projects • Standing Council of Experts in Ministry of Finance to examine transaction cost of doing business in India • Incubators set up by companies in academic institutions will qualify for Corporate Social Responsibility (CSR) activities .Budget Proposals – Industry (Expenditure contd.

TISS) and more budgetary allocation for Space.Budget Proposals . 100 crore each for some universities (AMU.000 crore to the expected cost of the National Food Security Bill/Act • Rs. 1 crore. 1000 crore corpus fund to ensure safety of women in public places • Grant of Rs. 5 lakh. • Service tax restaurants on all A/C Expenditure • Direct Benefit Transfer Scheme to be rolled out throughout the country during the term of UPA govt. BHU.Common People (incl. cigarettes • Duty-free limits for passengers to bring jewellery raised to Rs 50000 for men and Rs 1 lakh for women . tax payers) Tax • No review of income tax slabs. Only tax credit of Rs. • More taxes and duties on SUVs. • Rs 10. imported cars. 2. mobile phones. Energy and Technology.000 for income upto Rs. • A surcharge of 10% for taxable incomes above Rs.

Budget Proposals – Common People (Expenditure contd.3 % hike in expenditure for health care both rural and urban health mission • All flagship programmes adequately funded. 65.) • 17% increase in allocation for HRD Ministry. The Ministry will get Rs.867 crore • 24. • PSBs have promised more ATMs in their branch areas by 2014 • Insurance companies can now open branches in Tier 2 cities and below without prior approval • All towns of India with a population of 10000 or more will have an LIC branch and one other public sector insurance company. .

. 25 lakh • Proposal to establish exclusive women bank • Rs 532 crore to make post offices part of core banking • Medical colleges in six more AIIMS—like institutions to start functioning this year. 1 lakh for home loans up to Rs.Budget Proposals – Common People (Expenditure contd.) • First-time buyers of affordable homes will get an additional deduction of interest of Rs. Rs 1650 crore allocated for the purpose.

Budget Proposals – Others • Proposal to launch Inflation Indexed Bonds or Inflation Indexed National Security Certificates to protect savings from inflation • TDS of 1% on the transaction/sale of all immovable properties except agricultural land. which exceeds Rs. 50 lakh in value .

high fiscal deficit. low investor confidence – facing Indian economy? .Question to guide Budget Discussion Can Union Budget 2013-14 resolve the present challenges – low growth & savings. high current account deficit. high inflation.

130. FPM 9-Q. 149. FPM 11-S. 141 • Industry – Roll Nos. 150. 121.142. 129. 124. 128. 167. 157 • Farmers – Roll Nos.170.Discussion Groups – Section C • Government – Roll Nos. 131.145.179.173. 147. 127. 171.169. 148. FPM 10-Q & 12-S. 154 • Common people – Roll Nos. 168. 152 • Opposition – Roll Nos. 155. 139. 159. 160. 151. 165. 133.161. 125. 164. 174. 172. 162 .

266. 248. 295. 296. 340. 280. 278. 267. 257 • Industry – Roll Nos. 255. 269. 264 • Farmers – Roll Nos. 289 . 246. 241. 281. 285. 263. 274. 290 • Opposition – Roll Nos. 273. 297.Discussion Groups – Section E • Government – Roll Nos. 265. 242. 271. 250. 260 • Common people – Roll Nos.

307. 327. 325. 326. 323. 343. 317. 352. 335. 346. 298. 344. 339. 315. 329. 299. 334. 303. 348. 349. 306. 301. 349. 308. 300. 332 • Farmers – Roll Nos. 310. 328 . 350. 302. 347. 320. 338. 305. 316.Discussion Groups – Section F • Government – Roll Nos. 324. 342. 322 • Common people – Roll Nos. 337. 354. 318. 309. 331 • Industry – Roll Nos. 314 • Opposition – Roll Nos.

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