FM Pranab Mukherjee presents Union Budget 2009

Union finance minister Pranab Mukherjee began presenting the Union budget 2009-10 in the Lok Sabha today. Here are the highlights: 

• Government plans to bring back the economy to the high GDP growth rate of nine per cent at the earliest, Mukherjee said.
• Growth rate in 2008-09 dipped to 6.7% from the average 9% growth in previous three fiscal years, he said.
• Mukherjee intends to make pre-budget consultations with state finance ministers an annual affair.
• Fiscal deficit grew from 2.7% to 6.8% of GDP.
• Total fiscal stimulus during 2008-09 amounts to Rs1,86,000 crore.
• Indian Infrastructure Financial Corporation Limited (IIFCL) to evolve financing mechanism for giving increased support to infrastructure projects.
• Allocations for highways being stepped up by 23%.
• Indian Infrastructure Finance Company Limited will re-finance commercial bank loans upto 60% in critical projects through public-private partnership to the tune of Rs1,00,000 crore, to raise investment in the sector.
• Allocation for urban poor for provision for housing and basic amenities to be raised to Rs3,973 crore in the current year.
• Allocation for Jawaharlal Nehru Urban Renewal Mission increased by 87% to Rs12,887 crore. 
• Central assistance for storm-water drainage project increased to Rs500 crore from Rs200 crore in the interim budget.
• Target for agriculture credit raised to Rs3,25,000 crore in 2009-10 from Rs2,87,000 crore. 
• Incentives in interest rates to farmers to pay back agriculture loans on time.
• Additional allocation of Rs1,000 crore for accelerated irrigation project. 
• Export Credit Guarantee scheme extended till March 2010.
• Allocation for market development assistance scheme enhanced by 148%.
• Extension of interest subvension scheme extended to March 2010 to cover sectors like handicrafts and handlooms.
• Extension of stimulus package for print media by another six months beyond June 30 in view of the economic downturn.
• To return to FRBM target for fiscal discipline at the earliest, says Mukherjee.
• Subsidy regime for fertilisers to change to nutrient-based rather than price-based.
• Expert committee to be set up to advise on viable and sustainable pricing system for imported petroleum products.
• IT returns to be made simpler.
• Banks and insurance firms to remain in the public sector.
• Rs100 crore to be given as one-time grant in aid to expand banks in unbanking areas.
• Aam admi is the focus of all our programmes and schemes, says Mukherjee.
• Government committed to provide Rs100 a day as wages under NREGA.
• Work on National Food Security scheme for providing food at cheaper rates to the poor has begun, says FM.
• An allocation of Rs39,100 crore to be made for NREGA in 2009-10, an increase of 144%.
• NREGA coverage increased from 3.39 crore households in 2007-08 to 4.74 crore households in 2008-09.
• Allocation for flagship Bharat Nirman progamme being raised by 45%.
• For Indira Awas Yojana, allocation to be increased by 63%in 2009-10, to touch Rs8,800 crore.
• Rs2,000 crore for rural housing fund under National Housing Bank.
• Rashtriya Mahila Kosh corpus to be raised from Rs100 crore to Rs500 crore.
• National Mission for Female Literacy with emphasis on minorities, scheduled castes and scheduled tribes to be launched. Fifty per cent of all rural women to be brought into self-help group programmes.
•  Full interest subsidy for students taking courses in approved institutions. Five lakh students to benefit.
• Modernisation of national exployment exchanges to be carried out.
•  Action initiated to provide social security to unorganised sector workers.
•  Allocation for National Rural Health Mission to be raised by Rs257 crore over and above the outlay in the interim budget.
• Under National Action Plan on climate change, eight national missions are being launched. For one of the missions, National Ganga Project, the government proposes to increase allocation to Rs562 crore.
• First Unique Identification Card to citizens to roll out in 12-18 months. I propose provision of Rs120 crore for the project, says Finance Minister.
•  New pension benefits for 12 lakh jawans and junior commissioned officers from July.
• Allocation for Commonwealth Games increased to Rs3,472 crore from Rs2,112 crore.
•  I propose to allocate Rs500 crore for rehabilitation of internally displaced Tamils in Sri Lanka, says Mukherjee.
• Rs1,000 crore for rebuilding infrastructure damaged by the recent Cyclone Aila in West Bengal.
• Total budget expenditure for 2009-10 will be Rs10,28,032 crore, crossing the Rs10 lakh crore mark for the first time since independence.
• Plan expenditure, for both the Centre and states, to go up by Rs61,000 crore over the interim budget.
• Fiscal deficit in 2009-10 is proposed at 6.8% of GDP.
• Defence gets Rs1,41,703 crore for 2009-10, a 34% hike from the 2008-09 budgetary allocation of Rs1,05,600 crore.
• To further improve the efficiency of tax system, I propose to set up two authorities for advance ruling, says Mukherjee.
• Effort is to improve tax collection by eliminating distortions in tax system and expanding the base.
• No change in corporate tax.
• Personal income tax exemption limit for senior citizens raised by Rs15,000.
• I propose to raise by Rs10,000 the exemption limit for women on income tax. For all others, Rs10,000 up from Rs1,50,000, says Mukherjee.
• Ten per cent surcharge on personal income tax removed.
• Fringe Benefit Tax abolished.
• Proposal to incentivise business. I propose to start investment-linked tax benefits in areas of agriculture and national grid, says Mukherjee.
• Minimum Alternate Tax on book profits increased to 15% from 10%.
• 100% tax deduction for donations to electoral funds to improve transparency in political funding.
• Income tax incentives on educational loans expanded to cover vocational studies after schooling.
• Small businesses up to Rs40 lakh turnover exempted from filing advance tax returns.
• Presumptive Taxation of 8% on businesses of turnover of up to Rs40 lakh.
• Customs duty of 5% being levied on import of set-top boxes used under Conditional Access System (CAS).
• Manufacturing growth, which was negative during last year till March this year, appears to be barely turning the corner, says Mukherjee.
• Customs duty on gold and silver import increased.
• Customs duty to be reduced on drugs for heart treatment.
• Proposal to restore optional 4% CENVAT on cotton textiles beyond fibre stage.
• Excise duty on fibre for cheaper cloth reduced.
• Excise duty on petrol-driven small trucks reduced to 10%
• Full exemption from excise duty on branded jewellery
• Service tax exempted for exporters on select services
• Service Tax to be extended to lawyers on technical advice