Highlights of the Union Budget 2013

The following are the highlights of Union Budget 2013:

Excise duty on cigarettes hiked by 18%; Negative for ITC

 

FISCAL DEFICIT

Fiscal deficit seen at 5.2 pct of GDP in 2012/13

Fiscal deficit seen at 4.8 pct of GDP in 2013/14

Faced with huge fiscal deficit, India had no choice but to rationalise expenditure

 

 

BORROWING

Gross market borrowing seen at 6.29 trillion rupees in 2013/14

Net market borrowing seen at 4.84 trillion rupees in 2013/14

Short-term borrowing seen at 198.44 billion rupees in 2013/14

To buy back 500 billion rupees worth of bonds in 2013/14

 

 

SPENDING

Petroleum subsidy seen at 650 billion rupees in 2013/14

Revised petroleum subsidy for 2012/13 at 968.8 billion rupees

Estimated 900 billion rupees spending on food subsidies in 2013/14

Revised food subsidies at 850 billion rupees in 2012/13

Revised 2012/13 fertiliser subsidy at 659.7 billion rupees

 

 

INFRASTRUCTURE

Infra sector to gain from Rs 50,000 crs tax free infra bonds

3000 kms of road projects in 2013-14 in various states including Gujarat, Maharashtra, Rajasthan and Andhra Pradesh

Finance will be available at lower cost to ease interest burden for the infra sector

For this purpose, Infra debt funds will be encouraged

 

REVENUE

Expect 133 billion rupees through direct tax proposals in 2013/14

Expect 47 billion rupees through indirect tax proposals in 2013/14

Target 558.14 billion rupees from stake sales in state-run firms in 2013/14

 

 

TAX

Proposes surcharge of 10 per cent on rich taxpayers with annual income of more than 10 million rupees a year

To increase surcharge to 10 per cent on domestic companies with annual income of more than 100 million rupees

To continue 15 per cent tax concession on dividend received by India companies from foreign units for one more year

Propose to impose withholding tax of 20 per cent on profit distribution to shareholders

Amnesty on service tax non-compliance from 2007

10 bln rupees for first installment of balance of GST (Goods and Services Tax) payment

Propose to reduce securities transaction tax on equity futures to 0.01 per cent from 0.017 per cent

Time to introduce commodities transaction tax (CTT)

CTT on non-agriculture futures contracts at 0.01 per cent

 

 

CORPORATE SECTOR AND MARKETS

Plans to issue inflation-indexed bonds

Proposes capital allowance of 15 per cent to companies on investments of more than 1 billion rupees

Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements

Insurance, provident funds can trade directly in debt segments of stock exchanges

FIIs can hedge forex exposure through exchange-traded derivatives

Investor with less than 10 per cent stake in a company will be regarded as FII, more than 10 per cent stake as FDI (foreign direct investment)



Stock exchange regulator will simplify know-your-customer norms for foreign portfolio investors

To implement quickly recommendations of financial sector legislative reforms commission

 

 

 

POWER AND ENERGY SECTOR

Proposes zero customs duty for electrical plants and machinery

Proposes to move to revenue-sharing from profit-sharing policy in oil and gas sector

To equalise duties on steam and bituminous coal to 2 per cent customs duty and 2 per cent cvd (countervailing duty)

 

 

FOREIGN TRADE

To cut duty on exports of precious and semi-precious stones to 2 per cent from 10 per cent

No duty on import of ships, vessels

 

 

BANKING

To provide 140 billion rupees capital infusion in state-run banks in 2013/14

 

 

DEFENCE

To allocate 2.03 trillion rupees to defence in 2013/14

 

FISCAL DEFICIT

Faced with huge fiscal deficit, India had no choice but to rationalise expenditure

 

 

GROWTH

India faces challenge of getting back to its potential growth rate of 8 per cent

India must unhesitatingly embrace growth as highest goal

 

SPENDING

Total budget expenditure seen at 16.65 trillion rupees in 2013/14

India's 2013/14 plan expenditure seen at 5.55 trillion Indian rupees ($103 billion)

Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13, which is 96 per cent of budget estimate

Set aside 100 billion rupees towards spending on food subsidies in 2013/14

 

CURRENT ACCOUNT DEFICIT

India's greater worry is the current account deficit – will need more than $75 billion this year and next year to fund deficit

 

INFLATION

Food inflation is worrying, will take all steps to augment supply side

 

CORPORATE SECTOR AND MARKETS

Plans to issue inflation-indexed bonds

Proposes capital allowance of 15 per cent to companies on investments of more than 1 billion rupees

 

POWER AND ENERGY SECTOR

Proposes zero customs duty for electrical plants and machinery

Proposes to move to revenue-sharing from profit-sharing policy in oil and gas sector

 

AGRICULTURE

To allocate 801.94 billion rupees to rural development in 2013/14

Plan to allocate 270.49 billion rupees for agriculture in 2013/14

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