BUDGET - 2010-2011

WHAT AND WHY BUDGET… ?

Budgets are important tools of profit planning, are
similar to the broader system of planning in an
organization.

Budgeting Process
It involves four stages:
Objective determination stage
Goal determination stages
 Strategy formulation stage
 Budget preparation stage
Effects of Budget 2010-11
 Mobile manufactured in India.  Petrol & Diesel
 Medicine
 Cements
 Imported Agricultural
 Steel
Instruments
 Toys  Four Wheeler
 Set Top Boxes  Sports Cars
 Water filter  Cigarettes, Cigar, Tobacco, Guttka.
 Microwave Ovens
 Electronic Products.
 CDs
  Electricity
LED lights & CFL bulbs
 Rent on home loans  Precious Metals (Gold, silver,
 Seal packed imported goods Platinum including ornaments)
 Watches
 Readymade Garments
Intoduction
 The Budget 2010-11 has aimed to focus on inclusive growth and ensuring food
security.

 The concerns for 'aam aadami' or common man have gone hand in hand with
credible measures for improving investment climate, strengthening infrastructure
and fiscal consolidation.

 Economic Shortfall for 2010-11 – 5.5% of GDP (to be brought down to 4.8% and
4.1% in next fiscal years).

 GDP growth expected to be at 7.2% in 2009-10.

 Disinvestment to fetch Rs.25,000 Cr.

 DECREASE IN INDIRECT TAXES
 Full exemption from basic customs duty for manufacturing of mobile handsets
including cellular phones and parts in India.
(The validity of the exemption from special additional duty is being extended till March
31,2011)

 Reduction in excise duty on goods covered under the Medicinal and Toilet
Preparations Act from 16 % to 10 %

 Uniform, concessional basic duty of 5% , excise duty of 4 % with full exemption from
special additional duty prescribed on all medical equipments.

 CD/DVDs. -It is being provided that customs duty would now be charged only on the
value of the carrier medium and the customs duty on the balance value will be
exempt.
 Concessional customs duty of 5 % for cable TV operators for importing equipments.

 Toys fully exempt from central excise duty

 Reduction in central excise duty on replaceable kits for household type water filters
other than those based on RO technology to 4 %;

 Basic customs duty on one of key components in production of micro-wave ovens,

namely magnetrons, reduced from 10 % to 5 %

 Outright exemption from special additional duty provided to goods imported in a pre-
packaged form for retail sale.
(mobile phones, watches and ready-made garments even when they are not
imported in pre-packaged form)

 Central Excise duty on LED lights reduced from 8 % to 4 % with Compact Fluorescent
Lamps.
 INCREASE IN INDIRECT TAXES
 PETROLEUM

1) Customs duty on crude petroleum is being increased from Nil to 5%.

2) Customs duty on Petrol and Diesel is being increased from 2.5% to 7.5%
3) Customs duty on some other specified petroleum products is being increased from 5%
to 10%.

 PRECIOUS METALS

On gold and platinum from Rs.200 per 10 grams to Rs.300 per 10 grams
On silver from Rs.1,000 per kg to Rs.1,500 per kg.
 The excise duty hike from the present level of 8% to 10% will lead to increase in
the cost of cement companies.

 The increase in excise duty from 8% to 10% will negatively impact FMGC sector .

 Apart from it the increase in excise duty on cigarettes, cigars and non- smoking
tobacco will also negatively impact the companies of this sector.

 Four wheelers, steel manufacturers excise duty now has changed from 8% to
10%.
DIRECT TAXES FOR CORPORATE SECTOR
 Basic rates of corporate tax remain unchanged for both domestic and foreign
companies.

 Surcharge rates reduced from 10% to 7.5% on domestic companies.

 Minimum Alternative Tax increased from 15 % to 18 %.

 Tax Audit Limits has been increased from 40 lakh to 60 lakh & for professionals 10
Lakh to 15 lakh
 DIRECT TAXES
The Income Tax Slab for the individual tax-payers Rate of Tax
(1) Income up to Rs. 1.60 lakh * NIL
(2) Income above Rs. 1.60 lakhs and up to Rs. 5 lakh 10%
(3) Income above Rs. 5.00 lakhs and up to Rs. 8 lakh 20%
(4) Income above Rs. 8 lakh 30%

• * The exemption limit is INR 190,000 in case of resident women below the age of
65 years and INR 240,000 in case of resident individuals of the age of 65 years or
more.

• Deduction of an additional amount of Rs. 20,000 allowed, over and above the
existing limit of Rs. 1 lakh on tax savings, for investment in long-term infrastructure
bonds as notified by the Central Government
GENERAL
 Rs 1,900 crore allocated for Unique Identification Authority of India.

 Rs 1, 73,552 crore provided for infrastructure.

 Need to take firm view on opening up of the retail.

 Government committed to ensure continued growth of Special Economic

 Zones development.

 Rs. 1,73,552 Crores for infrastructure development.

 Rs. 48,000 Crores for Rural development.

 Rs. 19,894 Crores for Highway development.

 Allocated Rs. 16750 Crores for Railway.

GENERAL
 Repayment of loan by farmers extended by six months to June 30, 2010

 view of drought and floods in some part of the country.

 One-time grant of Rs 200 crore provided to Tirupur textile cluster in Tamil

Nadu.

 Allocation for new and renewable energy ministry.

 Clean Energy Fund to be created for research in new energy sources

GENERAL
 Rs 500 crore allocated for solar and hydro projects for Ladakh region.

 Alternative port to be developed at Sagar Island in West Bengal.

 Allocation for National Ganga River Basin Authority doubled to Rs 500 crore.

 Government for competitive bidding for coal blocks for captive power plants.
GENERAL
 Mega power plant policy modified to lower cost of generation; allocation to

power sector more than doubled to Rs 5,130 crore in 2010-11.

 Government proposes to set Coal Development Regulatory Authority.

 Propose to maintain thrust of upgrading infrastructure in rural and urban

areas. IIFCL authorised to refinance infrastructure projects.

 GENERAL
 Interest subvention for timely repayment of crop loans raised from one per cent
to two per cent, bringing the effective rate of interest to five per cent.

 Bottleneck of public delivery mechanism can hold us back.

 Rs 200 crore provided for climate resilient agriculture initiative.

 Government to provide Rs 16,500 crore to public sector banks to maintain tier-I

capital.
GENERAL
 Allocation for women and child development hiked by 80 per cent.

 Government decides to set up National Social Security

 Fund with initial allocation of Rs 1000 crore to provide social security to

workers in unorganised sector.

 Rs 1,270 crore provided for slum development programme, marking an

increase of 700 per cent.

 Allocation for development of micro and small scale sector raised from Rs
1,794 crore to Rs 2,400 crore.
 GENERAL
 1% interest (financial support) loan for houses costing up to Rs 20 lakh extended to
March 31, 2011; Rs 700 crore provided.

 25 % of plan outlay earmarked for rural infrastructure development

 Road transport allocation raised by 13 % to Rs19,894 Cr.

 Allocation for urban development increased by 75 % to Rs 5,400 Cr. in 2010-11.

GENERAL
 Indira Awas Yojana scheme's unit cost raised to Rs 45,000 in plain area and Rs
48,500 in hilly areas.

 Allocation for NREGA stepped up to Rs 40,100 crore in 2010-11.

 For rural development, Rs 66,100 crore have been allocated.

 Plan allocation for health and family welfare increased to Rs 22,300 crore from
Rs 19,534 crore.
GENERAL
 Plan allocation for school education raised from Rs 26,800 crore to Rs 31,036

crore in 2010-11.

 Deficit in foodgrains storage capacity to be met by private sector participation.

 Exclusive skill development programme to be launched for textile and garment

sector employees.

 Plan allocation for Ministry of Minority Affairs raised from Rs 1,740 crore to Rs

2,600 crore.
GENERAL

 Plan outlay for Ministry of Social Justice raised by 80 per cent to Rs

4,500 crore.

 Government to contribute Rs 1,000 per year to each account holder