Essay on the Union Budget of India (2013-14)

Budget is something that every citizen of India looks forward to. It determines how the finances are going to be managed for the coming year.

The Union Budget 2013-2014 is perhaps the most budget of post reform India. This budget, as always has been welcome by some, while for the others it is a total unsatisfactory one. The Finance Minister, Mr. Chidambaram has tried to cut down the expenses and has tried to increase the fiscal by next year end.

Listed below are the highlights of the Union Budget of 2013-2014:

  • There would be no change in the tax slabs for personal income tax.
  • Tax credit of about 2000 Rs to be provided to every person who comes in the slab of having an income upto 5 lakhs and this will benefit around 1.8 crore people.
  • 5-10% surcharge on domestic companies whose taxable incomes exceeds about 10 crores Rs.
  • Modified GAAR norms to be established from 1st April 2016.
  • Import duty on rice bran oilcake withdrawn.
  • Direct taxes code would be introduced in the current parliament session.
  • Import duty of setup boxes raised from 5 to 10 % to safeguard interest of domestic producers.
  • Import duty raised from 75 to 100% on luxury vehicles.
  • Duty free limit raised on gold to about 50,000 Rs for males and about 1,00,000 Rs for females.
  • Excise duty on cigarettes and cigar raised by 18 %.
  • Excise duty on SUV to be increased from 27 % to 30 %, however SUV used as taxies exempted.
  • Vocational courses offered by state affiliated institutes to be exempted from service tax.
  • Mobile phones ranging above 2000 RS would have an increased duty of 6 % from 1%, based on their maximum retail price.
  • Service tax would be levied on all A/C restaurants.
  • Education cess would continue at 3 %.
  • Contributions made to health and schemes under state and government , are made eligible for tax.
  • Eligibility conditions for life insurance policies for people suffering disabilities to be liberalized.
  • TDS of 1% on value of properties above 50 lakhs Rs, agricultural land exempted.
  • Fiscal deficit would be 5.2 % in the current year and 4.8 % in the next year.
  • Tax administrative reform commission to be set to have regular monitoring of tax law applications.
  • Surcharge of 10 % for individuals whose taxable income is over 1 crore Rs.
  • For Clean energy Fund for green projects, low interest rate funds to be provided, for a period of 5 years.
  • For the security of the nations, providing additional funds will never face any constraint.
  • Rs 532 crore to make post offices as a part of core banking.
  • An investor with stake of 10 percent or less would be treated as FII.
  • Evolve cities to rake up waste to energy products.
  • Concessional 6 % interest on loans to weavers.
  • The revised expenditure target is Rs 14,30,825 crores or about 96 % of Budget estimate for this fiscal. The budget estimate for 2013-2014 is Rs.6,65,297 crore.
  • Additional sum of 200 crores allotted to women and child welfare ministry.
  • About Rs13,2154 crores to be allotted for mid-day meal.
  • Eastern Indian states to get about Rs.1000 crores for improving agricultural production.
  • Indian institute of Biotechnology to be set up at Ranchi.
  • Tax free bonds issue to be allowed upto Rs.50,000 crore in 2013-14 strictly on the capacity to raise funds from the market.
  • Any company investing Rs.100 crore or above in plant and machinery in April 1,2013 to March 31,2015, will be allowed 15 % investment deduction allowance apart from depreciation.
  • First housing loan upto 25 lakhs would get an additional deduction of interest of upto Rs.1 lakhs in 2013-2014.
  • The current account deficit continues to be high sue to excessive dependence on oil, coal and gold imports and slow down on exports.
  • Battle against inflation has to be fought at all fronts.
  • Oil and gas exploration policy will b e reviewed and moved from profit sharing to revenue sharing.
  • By October, Government to set up the first women’s bank as a public sector bank.
  • Coal imports have crossed 100 million tones during April-Dec 2012 and are expected to go higher to 185 tones in 2016-201.
  • Rs.500 crores would be allocated for addressing environmental issues faced by textile industry.
  • About Rs.14,000 crores capital infusion into public sector banks in 2013-14.
  • PSU banks to have ATM at all their branches by March 2014.
  • All regional and rural banks to be e-linked by this year.
  • Insurance companies will be authorized to open branches in Tier-II cities with approval from IRDA.
  • Public sector general insurance companies to set up adalts to clear disputes.
  • Investor with a stake of 10 % or less would be treated as FII and any stake more than 10% would be treated as FDI.
  • FII`s will be allowed to participate in exchange traded currency derivatives.
  • Rs.6000 crores to be allocated for rural housing fund in 2013-14.
  • Incubators set by companies for academic purposes, will qualify for the Corporate Social Responsibility Activity.
  • Two new ports to be opened in West Bengal and Andhra Pradesh.
  • Rajiv Gandhi equity scheme would be liberalized to allow first time investor to invest in Mutual Fund and equity.
  • Rs. 10,000 crores set aside for incremental cost of National Food Security Bill over and above food subsidy.
  • Food grain production would be over 250 million tons in 2013-2014.

These are few of the points that were being highlighted during the budget for 2013-2014. It is general stated to be a neutral budget this time.