1. BUDGET – 2013-2014
Key features
Major purposes
Sector wise discussion
Speech of P. Chidambaran
Macro Economic framework
Analysis
discussion

2. BUDGET – A FLASH BACK
The budget process of our country predates the
independence
Budget was first introduced on 7th
April 1860
The first Finance Member, James Wilson presented
the budget
Liaquat Ali Khan, member of the interim Govt.
presented the budget of 1947-48
After independence, India’s first Finance Minister
R.K. Shanmukhan Chetty, presented the 1st
budget on
26th
November, 1947

3. MEANING OF BUDGET
The word budget has been derived from the French
word “bougetts” which means a small bag. It
emphasizes a bag containing the financial proposals
The use of the term budget for the annual financial
plans of the govt. dates back to 1733
In general, a budget shows financial accounts of the
previous year, the budget and revised estimates of the
current year and the budget estimates for the
forthcoming year
Article – 112 – annual financial statement

4. THE ECONOMY & THE
CHALLENGES
Global economic growth slowed from
3.9% in 2011 to 3.2% in 2012
India is part of the global economy –
exports and imports amount to 43% of
GDP- International Transmission – eg.
Recent financial crisis

5. CURRENT GROWTH RATE OF THE
INDIAN ECONOMY
ESTIMATING
AUTHORITY
GROWTH RATE
(%)
CSO 5%
RBI 5.5%
POTENTIAL GR 8%
GNP GAP 3% / 2.5%

6. CHALLENGE
Getting back to that growth rate is the challenge that
faces the country
There is no reason for gloom or pessimism
Even now, of the large countries of the world, only
China & Indonesia are growing faster than India in
2012-13
If we grow at the rate projected by many forecasters
in 2013-14 – only China will grow faster than India
The average for the 11th
plan period, entirely under the
UPA Govt., was 8%, the highest ever in any plan
period

7. STRATEGY / MANTRA OF THE BUDGET
Our goal is “higher growth leading to inclusive and
sustainable development”
Growth is a necessary condition for economic dvpt
It is growth that will lead to inclusive dvpt
Without growth there will be neither dvpt nor
inclusiveness – consider SC, ST, Minorities, Women
As Joseph Stiglitz, Nobel Prize winning economist, said,
“There is a compelling moral case for equity; but it is also
necessary if there is to be sustained growth. A country’s
most important resource is its people”.
The UPA Govt believes in inclusive dvpt, with emphasis
on improving human dvpt indicators

8. FISCAL DEFICIT, CURRENT ACCOUNT
DEFICIT & INFLATION
The purpose of a budget – to create the economic
space and find the resources to achieve the socio-
economic objectives
At present, the economic space is constrained due to:
1) High fiscal deficit
2) Reliance on foreign inflows to finance CAD
3) Lower savings
4) Lower investment
5) Tight monetary policy to contain inflation
6) Strong external headwinds

9. FORMS OF DEFICITS IN PF
RD = total revenue expenditure – TR receipts
BD = total expenditure – total revenue
FD = TE – (revenue receipts + non-debt creating
capital receipts)
FD = Budget deficit + borrowings (that part of the govt.
expenditure which is financed out of borrowing)
Primary Deficit = FD – interest payments
Monetized Deficit means the extent to which the govt.
borrows from the RBI and not from the market. RBI prints
fresh currency which monetize the economy by bringing
more money into circulation – called deficit financing

10. CURRENT ACCOUNT DEFICIT (CAD)
It is defined as deficit b/w receipts on account of
trade & invisibles and payments on account of trade &
invisibles in the BoPs account of the country
TWIN DEFICIT
An economy is deemed to have a Twin Deficit if it has
CAD and Fiscal Deficit

11. FISCAL DEFICIT, CURRENT ACCOUNT
DEFICIT & INFLATION
In September, 2012 – Govt. accepted the
main recommendations of the Dr. Vijay
Kelkar
A new fiscal consolidation path was
announced
Red lines were drawn for the FD at 5.3% of
GDP in 2012-13 and 4.8% in 2013-14

12. CAD; IS ANY AMICABLE SOLUTION
The greater worry of the budget – CAD
The CAD continues to be high mainly because of:
1) Our excessive dependence on oil imports
2) High volume of coal imports
3) Our passion for gold
4) Slow down in exports
This year, and perhaps next year too, we have to find
over USD 75 billion to finance the CAD

13. HOW CAN WE FINANCE CAD
There are only 3 ways before us
Foreign Direct Investment (FDI)
Foreign Institutional Investment (FII), and
External Commercial Borrowing (ECB)
Hence, we have no choice between welcoming and
spurning foreign investment
Foreign investment is an imperative
What we can do – to encourage foreign investment that is
consistent with our economic objectives

14. INFLATION: FOOD & NON-FOOD
Economic evils; namely: inflation and deflation
Looming large over our efforts to stimulate growth is inflation.
Major factors responsible for inflation:
 Imported inflation
 Supply demand mismatch, eg. Oilseeds & pulses
 Excessive aggregate demand
Our efforts in the past few months have brought down
headline WPI inflation to about 7.0% and core inflation to
about 4.2%
It is food inflation that is worrying, and we shall take all
possible steps to augment the supply side to meet the
growing demand for food items

15. INFLATION
CORE INFLATION: Take only
manufacturing items only – practiced in
developed countries – not food & fuel
HEADLINE INFLATION: Take all sectors
like manufacturing, food and fuel items –
practiced in India

16. WHOLE PRICE INDEX (WPI)
SL.N
O.
COMPONENTS WEIGHTAGE
(%)
1 MANUFATURE ITEMS 64.97
2 PRIMARY ARTICLES 20.12
3 FUEL & POWER 14.91
NO. OF COMMODITIES 676
BASE YEAR 2004-05

17. 8 CORE INDUSTRIES
1) COAL
2) FERTILIZERS
3) CEMENT
4) ELECTRICITY
5) CRUDE OIL
6) NATURAL GAS
7) REFINARY PRODUCTS
8) STEEL

18. GOVERNMENT EXPENDITURE
Govt. expenditure boosts AD and it has both good
and bad consequences
Wisdom lies in finding the correct level of govt.
expenditure; some propsals:
Rationalization of PE
Disciplined budget (tax & expenditure)
Market mechanism (forces of DD & SS)
Review of certain tax policies
The dvpt must be sustainale – economically,
ecologically, democratic legitimacy & approval

19. THE PLAN AND BUDGETARY ALLOCATIONS
• Budget estimate of 2012-13 – BE Rs. 14,90,925 crore
• Due to the slowdown & the austerity measures, the
revised estimate is Rs. 14,30,825 crore – 96% of the BE
• BE of 2013-14 – Rs. 16,65,297 crore & plan expenditure
at Rs. 5,55,322 crore
• Plan expenditure in 2013-14 will be 29.4% more than
the revised estimate of the current year
• All flagship programs have been fully & adequately
funded

20. MAIN GOAL OF THE BUDGET
One side ‘Economic policy’ and other side is
‘Economic welfare’
The link b/w policy and welfare can be expressed in a
few words: opportunities, education, skills, jobs &
incomes
One overarching goal: to create opportunities for our
youth to acquire education & skills that will get them
decent jobs or self employment that will bring them
adequate incomes that will enable them to live with
their families in a safe and secure environment

21. SC, ST, WOMEN & CHILDREN
The total (SC & ST sub plans) represents an increase
of 12.5% over the BE and 31% of the revised budget
(RB) of the current year
Fund Allocation
CATEGORY FUND (in crore)
SC sub plan 41,561 - III
ST sub plan 24,598 - IV
Gender budget 97,134 _ I
Child budget 77,236 - II
Ministry of Minority
Affairs
3,511 - V

22. WOMEN
Ministry of Women & Child Dvpt has
been asked to design schemes that will
address gender discrimination every
where, especially at the work place –
additional sum of Rs. 200 crore

23. MAULANA AZAD EDUCATION FOUNDATION
Main vehicle to implement educational schemes and
channelize funds to non-govt. organizations for the
minorities
Its corpus stands at Rs. 750 crore
Budget allocated Rs. 160 crore to the corpus fund of
the institution to increase corpus fund to RS. 1,500
crore during the 12 FYP
Rs. 100 crore to this foundation to launch medical aid
to its objectives

24. DISABLED PERSONS
Allocate a sum of Rs. 110 crore to the
Department of Disability Affairs for
the ADIP Scheme in 2013-14, as against
the RE of Rs. 75 crore in 2012-13

25. HEALTH AND EDUCATION
Health for all and education for all remain our
priorities
Allocate 37,330 crore to the Ministry of Health &
Family Welfare. Of this, the new National Health
Mission (combines NRHM & proposed NUHM) will
get 21,239 crore, an increase of 24.3% over the RE
Rs. 4,727 crore for medical education, training &
research
Rs. 1,069 crore to the Department of AYUSH
The National Program for the Health Care of Elderly
is being implemented in 100 selected districts of 21
states

26. EDUCATION
Allocate Rs. 65,867 crore to the Ministry of Human
Resource Development
Sarva Shiksha Abhiyan (SSA) – Rs. 27,258 crore
Right to Eductaion Act (1st
April, 2010, Article 21A)
Rashtriya Madhyamik Shiksha Abhiyan (March 2009)
alloted – Rs. 3,983 crore
Scholarships – 5,284 crore
Mid-Day Meal Scheme (15th
August,1995) – Rs. 13,215 crore
The Govt. is committed to the creation of Nalanda
University as a centre of educational excellence

27. ICDS
Allocate Rs. 17,700 crore in 2013-14
(15,850- 2012-13) – representing an
increase of 11.7%
The focus will continue to be on early
childhood care & education

28. DRINKING WATER
Allocate Rs. 15,260 crore to the Ministry of
Drinking Water and Sanitation
Provide rs. 1,400 crore towards setting up
water purification plants

29. RURAL DEVELOPMENT
Allocated – Rs. 80,194 crore
MGNREGS (Feb,2006) - Rs. 33,000 crore
PMGSY (25 Dec, 2000) - Rs. 21,700
IAY (1985-86) - Rs. 15,184
The budget proposed to carve out PMGSY-II and
allocate a portion of the funds to the new programs
that will benefit states such as AP, Haryana,
Karnataka, Maharashtra, Punjab & Rajasthan

30. JNNURM
Jawaharlal Nehru National Urban Renewal Mission is
being continued in the 12th
plan (2005-2012) -
Allote Rs. 14,873 crore

31. AGRICULTURE
The average annual growth rate of agriculture
9th
FYP - 2.5%
10th
FYP - 2.4%
11th
FYP - 3.6%
Total food grain production – 2012-13- over 250 MTs
Agricultural exports from April to December, 2012
have crossed Rs. 138,403 crore
Allocate Rs. 27,049 crore to the Ministry of
Agriculture
Of this, agricultural research will be provided Rs.
3,415 crore

32. AGRICULTURE
Agricultural credit is the driver of agricultural
production
It is a state subject
Agricultural credit target for 2013-14 – Rs. 700,000
crore
Interest subvention scheme for short-term crops loan
continued – 4% per annum
The budget proposed to extend the scheme to crop
loans borrowed from private sector scheduled
Commercial Banks

33. GREEN REVOLUTION
Continue to support the eastern Indian states with an
allocation of Rs. 1000 crore in 2013-14
Crop diversification – Punjab & Haryana
Rashtriya Krishi Vikas Yojana (RKVY-Aug 16, 2007) –
9,954 crore – to mobilize higher investment in
agriculture – 11th
plan allocation was – 25,000 crore
National Food Security Mission (NFSM-Rabi, 2007-
08) – 2,250 crore – intended to bridge yield gaps
Integrated Watershed Program – Rs. 5,387 crore

34. PROPOSED INSTITUTIONS
National Institute of Biotic Stress Management – for
addressing plan protection issues will be established
at Raipur, Chhattisgarh
Indian Institute of Agricultural bio-technology will be
established at Ranchi, Jharkhand

35. NATIONAL LIVESTOCK MISSION
NLM will be launched in 2013-14 to attract
investment and to enhance productivity taking into
account local agro-climatic conditions
The budget proposed to provide Rs. 307 crore for the
mission
There will be a submission for increasing the
availability of feed and fodder

36. FOOD SECURITY
National Food Security Bill is a promise of the UPA
Government
The budget set apart Rs. 10,000 crore, over and above
the normal provision for food subsidy, towards the
incremental cost that is likely under the Act

37. INVESTMENT, INFRASTRUCTURE & INDUSTRY
The growth rate of an economy is correlated with the
investment rate
Investment is an act of faith. ‘Doing business in India’
must be seen as easy, friendly and mutually beneficial.
It is the infrastructure that needs large volumes of
investment
The 12th
plan projects an investment of USD 1 trillion
or Rs. 55, 00,000 crore in infrastructure
The plan envisages that – private sector will share
47% of the investment

38. INVESTMENT IN INFRASTRUCTURE
Govt. has taken or will take the following measures to
increase investment in infrastructure:
1) Infrastructure Dept Funds (IDF) will be encouraged
2) India Infrastructure Finance Corporation Ltd (IIFCL), in
partnership with the ADB
3) In the last two years, a number of institutions were allowed
to issue tax free bonds
4) Multilateral Development Banks – ADB, World Bank
5) NABARD operates the Rural Infrastructure Development
Fund (RIDF). RIDF has successfully utilized 18 tranches so
far. The budget proposed to raise the corpus of RIDF-XIX
in 2013-14 to Rs. 20,000 crore

39. ROAD CONSTRUCTION
Govt. has decided to constitute a regulatory authority
for the road sector

40. CABINET COMMITTEE ON INVESTMENT (CCI)
Revival of investment in the industrial sector,
especially manufacturing, is a key challenge
CCI has been set up to monitor investment proposals
as well as projects under implementation, including
stalled projects, and guide decision-making in order
to remove bottlenecks and quicken the pace of
implementation

41. NEW INVESTMENT
A company investing Rs. 100 crore or more in plant
and machinery during the period 1/4/2013 to 31/3/2015
will be entitled to deduct an investment allowance of
15% of the investment – aim – to attract new
investment and to quicken the implementation of
projects
The National Electronics Policy, 2012 is intended to
promote manufacture of electronic goods in India

42. SAVINGS
Increasing savings and their optimal allocation for
productive uses lead for higher economic growth
High saving rate – 36.8% - 2007-08
Gross domestic saving fell by 6% points in 2011-12
The private, comprising households and corporate,
remains the main contributor to saving
The household sector must be incentivized to save in
financial instruments rather than buy gold

43. MEASURES TO INCREASE THE AMOUNT OF
SAVING
Rajiv Gandhi Equity Savings Scheme (proposed in the
budget, 2012-13 – income tax deduction of 50% on
retail investments of up to Rs. 50,000 made directly in
equities by those earning an annual income of less
than Rs. 10 lakh) will be liberalized to enable the first
time investor to invest in mutual funds as well as
listed shares
Home loan interest deduction
Inflation Indexed Bonds or Inflation Indexed National
Security Certificates

44. INDUSTRIAL CORRIDORS
Delhi Mumbai Industrial Corridor (DMIC) project has
made rapid progress
Work on two new smart industrial cities at Dholera,
Gujarat and Shendra Bidkin, Maharashtra will start
during 2013-14 – support of Japan
The department of Industrial Policy and Promotion
(DIPP) & the Japan International Cooperation Agency
(JICA) are currently preparing a comprehensive plan
for the Chennai Bengaluru Industrial Corridor
The next corridor will be the Bengaluru Mumbai
Industrial Corridor

45. LEH-KARGIL TRANSMISSION LINE
To improve power supply in the Leh-Kargil region
and connect the Ladakh region to the northern grid,
the govt. will construct a transmission system from
Srinagar to Leh at a cost of Rs. 1,840 crore. The budget
proposed to provide Rs. 226 crore in 2013-14 for the
project

46. CURRENT AFFAIRS – HEAD II
Brazilian Roberto Azevedo – new head of
WTO
Replaced – Frenchman – Pascal Lamy
Azevedo – Brazilian career diplomat
159 member WTO’s – Geneva based
He has been Brazil’s WTO Ambassador
since 2008

47. CURRENT AFFAIRS - SPORTS
Sir Alex Ferguson – Manchester
United Manager – retirement
Took over from Ron Atkinson in 1986
and has won 13 league titles - 5 FA
cups – 2 Champions League

48. PORTS
Two major ports will be established in
Sagar, WB and in AP
A new outer harbour will be
developed in the VOC port at
Thoothukodi, TN

49. NATIONAL WATERWAYS
Five inland waterways have been declared as national
waterways
Move a Bill – Lakhipur – Bhanga stretch of river Barak
in Assam as the 6th
national waterway
The first transport contract has been awarded in WB
from Haldia to Farakka

50. COAL
We must reduce our dependence on
imported coal
Coal imports during the period April-
December, 2012 have crossed 100 MTs
It is estimated that imports will rise to 185
MTs in 2016-17

51. MICRO, SMALL & MEDIUM ENTERPRISES
Enhance the refinancing capability of
SIDBI(April,2,1990) from the current level
of Rs. 5,000 crore to Rs. 10,000 crore per
year
SIDBI set up the India Microfinance Equity
Fund in 2011-12 – Rs. 100 crore

52. TEXTILES
Continue the Technology Upgradation Fund
Scheme (TUFS) for the textile sector in the 12th
plan with an investment target of Rs. 151,000 crore
The major focus would be on modernization of
the powerloom sector. The budget provide Rs.
2,400 crore in 2013-14 for the purpose
Textile parks have been set up under Scheme for
Integrated Textile Parks (SITP)

53. TEXTILES
A new scheme with an outlay of Rs. 500
crore called the Integrated Processing
Development Scheme will be implemented
in the 12th
plan to address the environmental
concerns of the textile industry, including
improving the effluent treatment
infrastructure. The budget provide Rs. 50
crore in 2013-14 for the scheme

54. FINANCIAL SECTOR
Financial sector is at the heart of the economy
Govt. constituted the Financial Sector Legislative
Reforms Commission (FSLRC) in 2011

55. BANKING
Rs. 12,517 crore to infuse additional capital into 13
public sector banks
In 2013-14 – budget allocated further amount of Rs.
14,000 crore for capital infusion
Ensure that public sector banks always meet the Basel
III regulations
Bring all banks under core banking solutions (CBS)
CBS and e-payment systems by 31/12/2013
Rs. 1000 crore – to set up India’s 1st
Women’s Bank as a
PS bank

56. HOUSING SECTOR BANKING
The Rural Housing Fund set up
through the NHB is used to refinance
lending institutions, including RRBs,
that extend loans for rural housing
Budget proposed to start a fund for
urban housing to mitigate the huge
shortage of houses in urban areas

57. INSURANCE
IRDA
Rashtriya Swasthiya Bima Yojana
ULIPs (Unit Linked Insurance Plans), a highly
popular hybrid financial product marketed by the
insurance companies
The SEBI’s case that ULIPs with a large investment
component were oriented more towards the capital
market than to life insurance and, therefore, should
be regulated by SEBI and not IRDA
Ordinance – ULIPs will be regulated by IRDA

58. CAPITAL MARKET
Best regulated market
SEBI’s (1988 – as per the recommendations of the G.S. Patel
Committee – in 1992- statutory body through an Act) silver
jubilee year – 2013 - SEBI set up a new Committee headed by
former Chief Justice of Karnataka HC, Justice N.K. Sodhi to
review insider trading norms (6/3/13)
Some proposals – simplify the procedures
In order to remove the ambiguity that prevails on FDI & FII –
adopt international practice and lay down a broad principle –
where an investor has a stake of 10% or less in company treated
as FII
More than 10% - treated as FDI
A committee will be constituted to examine the application of
the principle and to work out the details expeditiously

59. ENVIRONMENT
Waste to energy project – promotion
Clean & Green energy is a priority of the Govt.
The budget proposed to reintroduce ‘generation-
based incentive’ for wind energy projects and provide
Rs. 800 crore to the Ministry of Non Renewable
Energy for the purpose.

60. OTHER PROPOSALS
Backward Regions Grant Fund (BRGF) is a vital
source of gab funding – Rs. 11,500 crore in 2013-14
BRGF will include a state component for Bihar, the
Bundelkand region, WB, the KBK districts of Odisha
and 82 districts under the Integrated Action Plan
Skill Development – NSDC
We have set an ambitious target of skilling 50 million
people in the 12th
plan period, including 9 million in
2013-14
NRLM & NULM – releasing funds

61. DEFENCE
Allocation for defence to Rs. 203,672 crore

62. SCIENCE & TECHNOLOGY
Rs. 6,275 crore to the Ministry of S&T
Rs. 5,615 crore to the Department of Space
Rs. 5,880 crore to the Department of Atomic Energy
Problem – we do not pay enough attention to S & T
for the common man
Institutions of Excellence

63. SPORTS
The budget proposed to set up the
National Institute of Sports Coaching
at Patiala

64. PANCHAYATI RAJ
The Rajiv Gandhi Panchayat Sashaktikaran
(RGPSA) was started in 2013 with a modest
allocation of Rs. 50 crore
Allocated Rs. 455 crore to the Ministry of
Panchayati Raj in 2013-14

65. GHADAR MEMORIAL
To mark the centenary of the Ghadar
movement, the Govt. will fund the
conversion of the Ghadar memorial in San
Francisco into a museum and library

66. CENTRAL SCHEMES
Reduced from 173 in number (11th
plan)
to 70 schemes
As a part of fiscal consolidation

67. MAKE THREE PROMISES
1st
– is the face of the woman – Nirbhaya Fund
2nd
– is the face of the Youth - NSDC
3rd
– face of the poor – Direct Benefit Transfer scheme

68. BUDGET ESTIMATES
Plan Expenditure – Rs. 5,55,322 crore – 33.3% of
total expenditure
Non plan Expenditure – Rs.11,09,975 crore
FD – 5.2% (2012-13) - 4.8% (2013-14)
RD – 3.9 ,, - 3.3% ,,
By 2016-17 bring down the FD – 3% - RD – 1.5% and
the Effective RD to zero
FRBM Act

69. PART- B : TAX PROPOSALS
An emerging economy must have a tax system that
reflects best global practices
The budget propose to set up a Tax Administration
Reform Commission to review the application of tax
policies and tax laws and submit periodic reports that
can be implemented to strengthen the capacity of our
tax system

70. TAX GDP RATIO
In 2011-12, the ratio was 5.5% for Direct
Taxes and 4.4% fro Indirect Taxes –
Aggregate – 9.9% (lowest ratio – we must
reclaim that peak)
In 2007-08 – the ratio – touched a peak of
11.9%
Laffer Curve

71. DIRECT TAXES
Current slabs of personal income tax were introduced
only last year – no change in the budget
The budget give some relief to the tax payers in the
first bracket of 2 lakh to 5 lakh – tax credit of Rs. 2,000
1.8 crore tax payers are expected to benefit to the
value of Rs. 3,600 crore
Fiscal consolidation – both PE cut & augment PR

72. SUPER – RICH TAX
The budget proposed to impose a surcharge of 10% on
persons whose taxable income exceeds Rs. 1 crore –
42,800 persons
Increased the surcharge from 5% to 10% on domestic
companies whose taxable income exceeds Rs. 10 crore
In the case of foreign companies, who pay the higher
rate of corporate tax, the surcharge will increase from
2% to 5%
Dividend distribution tax or tax on distributed
income – increase the current surcharge of 5% to 10%
Educational cess for all tax payers shall continue at
3%

73. INCOME TAX SLAB
BASE OF THE TAX RATE OF THE TAX
Up to 2 lakh Nil
2.1 lah t0 5 lakh 10%
5.1 lakh to 10 lakh 20%
Above 10 lakh 30%
60-79 age group 2.5 lakhs – nil
80 & above age 5 lakh - nil

74. SOME FACTS
Venture Capital Funds – the relevant regulations of SEBI
have been replaced by Alternative Fund Regulations –
registered with SEBI
Introduced Commodities Transaction Tax (CTT) on non-
agricultural commodities futures contracts
The Finance Act, 2012 introduced the General Anti
Avoidance Rules (GAAR)
An expert committee was constituted to consult
stakeholders and finalize the GAAR guidelines
Impermissible tax avoidance arrangements will be
subjected to tax
The budget proposed to bring the modified provisions
into effect from 1/4/2016

75. SOME FACTS
The Rangachary Committee was appointed to look
into tax maters relating Development Centers & IT
sector and Safe Harbor Rules for a number of sectors
The 5th
Large Tax payer Unit will be opened at Kolkata
shortly
Income – tax department is rapidly moving towards
technology based processing (e-filing) – Central
Processing Cell set up at Bengaluru & Central
Processing Cell-TDS inaugurated a few days ago at
Vaishali, Ghazibad

76. DIRECT TAX CODE (DTC)
Income Tax Act – 1961 – 2011 marked the 50th
year
Proposed to a new code based on the best
international practices that will be compatible with
the needs of a fast developing economy

77. INDIRECT TAXES
Customs duty – peak rate – 10% - no change
Excise duty - 12% ,,
Service tax - 12% ,,
As a measure of relief to the ship building industry –
exempt ships and vessels from excise duty
Increased the specific excise duty on cigarettes by
about 18%
Items under service tax enlarged – levy service tax all
air conditioned restaurants

78. ESTIMATES
T he budget proposals on the Direct Taxes side are
estimated to yield Rs. 13,300 crore
Indirect Taxes side – Rs. 4,700 crore

79. GOODS AND SERVICES TAX (GST)
GST first mentioned in the budget of 2007-08 and
planned to implement on 1/4/2010
Need constitutional amendment
GST council
Compensation

80. CONCLUSION
India – 10th
largest economy in the world
We can become 8th,
or perhaps 7th
largest by 2017
By 2025, we could become a USD 5 trillion economy
and among the top five in the world
Swami Vivekananda (Jan 12th
1863), whose 150th
birth
anniversary we celebrate in 2013, told the people: “All
the strength and succour you want is within
yourself. Therefore, make your own future”.

81. RUPEES COMES FROM
1. Borrowing & other liabilities- 27
2. Corporate Tax - 21
3. Income Tax - 12
4. Union Excise Duties - 10
5. Customs Duties - 9
6. Service Tax & other Taxes - 9
7. Non-Tax Revenue - 9
8. Non-Debt Capital Receipts - 3

82. RUPEES GOES TO
1. Central Plan - 21
2. Interest Payments - 18
3. States’ share of taxes & duties - 17
4. Subsidies - 12
5. Other non-plan expenditure - 11
6. Defence - 10
7. Plan assistance to states & UTs - 7
8. Non-plan assistance to states & UTs - 4