You are on page 1of 22


Finance minister Mr. Pranab Mukherjee presented the Union Budget 2009-10 in the Lok Sabha on July 6,2009. Union budget is a schematic plan of Indias financial and operational goals. It is an action plan that facilitates allocation of resources in India . The government recognizes the challenges that this task entails, particularly at a time when the world is struggling with an unprecedented financial crisis and economic slowdown that has also affected India.

The first challenges is to lead the economy back to the high

Gross Domestic Product(GDP) growth rate of 9% per annum at the earliest.

The second challenge is to deepen and broaden the agenda

for inclusive development.

The third challenge is to re-energize government and improve

delivery mechanisms.


Short -term measures:
Infrastructure development Highways and railways Urban infrastructure

Gas Assam gas cracker project Agricultural development

Debt relief for farmers

Accelerated irrigation benefit programs Restoring export growth

Medium Term Measures:

Fertilizer subsidy Petroleum and diesel pricing policy Taxation Peoples ownership of public sector units Financial sector Investment environment

Towards Inclusive Development:

National Rural Employment Guarantee Scheme(NREGS) National food security Bharat nirman

Pradhan Mantri Adarsh Gram Yojana

Empowerment of weaker sections Females literacy Integrated child development services

Student loans to weaker sections Welfare of minorities Welfare of workers in the unorganized sector Employment exchanges Handlooms Health Environment and climate change

Towards Building Accountable Institutions:

National security One Rank One Pension for ex-servicemen(OROP) Education Commonwealth games 2010

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

2008-2009 Revised Estimates 562173 465970 96203 338780 9698 2567 326515

2009-2010 Budget Estimates 614497 474218 140279 406341 4225 1120 400996

Revenue Receipts Tax Revenue (net to Centre) Non-tax Revenue Capital Receipts (5+6+7)$ Recoveries of Loans Other Receipts

Borrowings and other Liabilities*

Total Receipts (1+4)$ Non-plan Expenditure On Revenue Account of which, Interest Payments On Capital Account Plan Expenditure On Revenue Account On Capital Account Total Expenditure (9+13) Revenue Expenditure (10+14) Capital Expenditure (12+15) Revenue Deficit (17-1) Fiscal Deficit {16-(1+5+6)} Primary Deficit (20-11)

900953 617996
561790 192694 56206 282957 241656 41301 900953 803446 97507 241273 (4.4) 326515 (6.0) 133821 (2.5)

1020838 695689
618834 225511 76855 325149 278398 46751 1020838 897232 123606 282735 (4.8) 400996 (6.8) 175485 (3.0)


Tax proposals
Direct Taxes : The Direct Taxes Code, along with a
Discussion Paper, to be released to the public for debate. The Direct Taxes Code Bill will be finalized for introduction in Lok Sabha sometime during the Winter Session based on the inputs received.

Indirect Taxes : Proposals on indirect taxes to seek to

achieve stable framework by maintaining the overall rate structure for customs and central excise duties as well as service tax.


Increased target for credit flow set at Rs. 3,25,000 crore for

2009-10 as compared with Rs.2,87,000 crore in 2008-09.

Additional subvention of 1% to be paid as incentive to farmers

who repay short-term crop loans on schedule. Additional allocation of Rs 411 crore made.

Abolition of commodities transaction tax. Investment linked tax incentives to be provided for setting up

and operating cold chain, warehousing facilities for storing agricultural produce.

Weighted deduction of 150% for expenditure relating to in-

house R&D extended.

Specific component to ad valorem duty to now attract

uniform rate of Rs.15,000 per unit.

Reduction in excise duty on petrol driven trucks for transport

within cities and across short distances to 8% from 20%.

Increase in allocation to defense sector.

IIFCL to refinance 60% of banks loans to PPP. Target for agricultural credit in FY 10 hiked by 13.2% & additional

subvention of 1% for farmers who repay on schedule.

Extension of debt waiver to farmers to repay 75% of their loans

extended by six months.

Banks and insurance companies to receive support and

capital infusion.

Higher APDRP allocation by 160% to enable higher funding

to power projects.


Customs duty exemption on concrete batching plants of

capacity 50 cubic meters per hour or more has been withdrawn. Such plants will now attract customs duty of 7.5%.

Allocation under Jawaharlal Nehru National Urban Renewal

Mission (JNNURM) increased by 87% YoY to Rs 1.3 lakh crore in 2009-10.

Allocation for housing and provision of basic amenities to

urban poor enhanced to Rs 3970 crore.

Allocation to National Highways Authority of India(NHAI) for the

National Highway Development Programme (NHDP) increased by 23%.

Increase in provision for scheme Mission in Education through

ICT to Rs 900 crore. uncovered state.

Rs 827 crore allocated to open one Central University in each Rs 2,113 crore allocated for IITs and NITs. Higher education overall Plan budget hiked by Rs 2,000 crore

over interim BE 2009-10. weaker students.

Benefits to access higher education to enable economically National Mission for Female Literacy to be launched with focus

on minorities ,SC, ST, and other marginalized groups. Allocation of Rs 13,100 crore to Sarva Shiksha Abhiyan (SSA).


Allocation under NREGs hiked by 144%. Goods and Services Tax (gst) to come in effect from 1st

April ,2010.

4% duty maintained on paper, paperboards, biscuits, cakes

and pastries.

Increase in tax exemption on personal income. Fringe benefit tax (FBT) abolished. Minimum alternate tax (MAT) on book profits hiked to 15%

from 10%

Customs duty on nine specified life savings drugs to

5%.These drugs exempt from excise and CVD. Provision for the National Rural Health Mission increased by Rs 2,050 crore over and above Rs 12,070 crore provided in the Interim Budget.

Tax deductions under STPI scheme extended by one

more year. Rate of minimum alternate tax (MAT) on book profits increased from 10% to 15% carry-forward provision for taxcredit extended to 10 years.

The outlay for Commonwealth Games to be stepped up

from Rs2100 crore in the Interim Budget to Rs 3500 crore Greater focus on infrastructure development . Also , the Budget has indicated getting the GDP growth rate back on track.

Allotted Rs 39,100 crore for the National Rural Employment

Guarantee Scheme (NREGS),an increase of 144%. Full exemption of the countervailing duty (CVD) OF 4% on accessories, parts and components imported for the manufacture of mobile phones has been reintroduced for another year.


Prices of daily use items such as soaps, hair oils, toothpaste

may increase marginally on impending commodity price increase.

The increase in customs duty on gold and silver, never mind

the exemption of branded jewellery from excise levy.

Prices of MP3 and MP4 players are likely to fall, furniture

products would become expensive.

Price of cooking oil will rise because o non-imposition of

customs duty o imports.

A M NAIK CMD, Larsen & Toubro

The plethora of infrastructure investments and other investments and other outlays will help stimulate growth for infrastructure companies and the economy in general. But there is nothing for the power sector. At L&T, we expect our order intake and sales to continue to maintain growth as per our guidance levels.

I m positive on the budget at the highest level through the impact on the IT sector is minimal. It could have been better, its still positive. The proposals on FBT , corporate and personal tax and reforms in the tax system and transfer pricing will help.

S NAKANISHI CEO&MD, Maruti Suzuki Ltd

It is a progressive Budget. The focus on rural and infrastructure development will usher in opportunity for growth industries , including auto mobiles.
TUSHAR PODDAR- VP& Chief India Economist,

Goldman Sachs The fiscal proposals are commendable and a short-term increase in deficit is warranted. Financing the deficit will not be difficult. There were hopes of structural reforms, which were not met. The short-term policy objective of stimulating demand will likely be achieved.

MANOJ KOHLI - CEO , Bharti Airtel Ltd

The budget signals significant demand stimulus emanating from rural and infrastructure sectors.

Union Budget 2009-10 can be termed as Rasna delivered in a Mirinda bottle. Functionally there are no problems with the Budget 2009-10, but it certainly didnt meet the expectations that India Inc had with it. It simply lacked the expected Fizz!

However, it would appreciate that a single budget speech cannot solve all our problems nor is the union budget the only instrument to do so, yet it is an important means to share the vision of the government.

BIBLIOGRAPHY: Websites Magazine and newspapers Competition success review. Economic times.