Mukherjee presents budget for continuity

Subscribe to Oneindia News

New Delhi, July 6 (ANI): Presenting a budget for continuity that met some of the expectations of the common man, Union Finance Minister Pranab Mukherjee on Monday kept his focus firmly on infrastructure, skills development and promotion of inclusive growth, while dampening the mood by announcing that fiscal deficit would close to seven percent in 2009-10.

Keeping his focus on the Aam Aadmi (common man), the majority of which lives in rural surroundings, Mukherjee announced a 146 percent hike in the National Rural Employment Guarantee Act (NREGA) and a 46 percent hike in the Bharat Nirmaan scheme. He also promised to introduce a Food Security Act under which 25 kilograms of rice or wheat a month would be provided to the poor at Rs.3 per kilogram.

This year's budget includes a number of sector specific incentives, particularly for those that promote employment. For example, the NREGA will have Rs.39, 100 crore to spend. Mukherjee informed Parliament that in 2008-09, over 4.47 crore households were covered under the act.

He also announced that the UPA Government is committed to providing a real wage of Rs.100 per day to those entitled to receive the benefit under the NREGA.

Mukherjee said that the Bharat Nirmaan with its six schemes was an important initiative for bridging the gap between rural and urban folk and is aimed at improving the quality of life and people, particularly the underprivileged.

Mukherjee also proposed to allocate Rs.8800 crore in 2009-10 for Indra Awas Yojana (IAY), which is 63 percent higher than the last year's outlay.

Keeping its focus on the poorest of the poor, the government has proposed to launch a new scheme called the Pradhan Mantri Adarsh Gram Yojana (PMAGY) on pilot basis for the integrated development of 1000 villages having Scheduled Caste (SC's) population of 50 percentor more. He has allocated 100 crores for this scheme in the current fiscal.

The restructuring of the Swarn Jayanti Gram Swarojgaar Yojana (SGSY) was also announced, making it universal in its application. This is being done with the focus and time bound poverty eradication by 2014-15.

Mukherjee also announced a hike of 400 crores in the Rashtriya Mahila Kosh from the present 100 crores to 500 crores over the next few years.

To enable students from economically weaker sections to access higher education, Mukherjee proposed a scheme to provide them full interest subsidy during the period of moratorium.

He laid special emphasis on infrastructure development in the country.

He said that the Infrastructure Finance Company Limited (IIFCL) would evolve a takeout financing scheme in consultation with banks to facilitate incremental lending to the sector. The IIFCL would refinance 60 percent of commercial bank loans for public private partnership projects in critical sectors over the next fifteen to eighteen months.

For improving the road infrastructure, this year's budget allocation to the National Highway Authority of India (NHAI) has been increased by 23 percent.

Announcing a slew of tax sops, Mukherjee said personal income tax exemption would go up by Rs.10, 000 and the 10 per cent surcharge would be scrapped. He also said that the Fringe Benefit Tax (FBT) and the Commodities Transaction Tax (CBT) would be abolished.

Exemption limit in personal income tax was also raised by Rs.15000 rupees for senior citizens and to Rs.190, 000 for women earners.

The finance minister also promised to phase out surcharges on various direct taxes and to bring out a new income tax code within next 45 days.

There was no change in corporate tax. Bringing in four new services extended the scope of services tax. Legal services for the first time will be brought under service tax net.

The export sector will benefit as some of the tax on services for the sector have been removed. Stimulus packages announced for the export sector, including ECGC adjustment schemes and interest subvention are to continue till March 2010.

Finance Minister made minimum changes with indirect taxes.

However excise duty on non-essential items has been increased from four to eight percent. or former and current defence personnel, the government announced that it has decided to accept one rank one pension and has also announced measures to tackle internal security.

Mukherjee said the country owed a deep debt of gratitude to its valiant ex-servicemen, and this was one way of showing appreciation for their services to the nation.he government has decided to substantially improve the pension of pre 1.1.2006 defence pensioners below officer rank (PBOR) and bring pre 10.10.1997 pensioners on par with post 10.10.1997 pensioners. Both these decisions will be implemented from July 1, 2009 resulting in enhanced pensions for more than 1.2 million ex-soldiers and junior commissioned officers.

He said these measures would cost the exchequer over Rs.2100 crore annually. Certain pension benefits being extended to war wounded and other disabled pensioners would also be liberalized, he added.

An additional amount of Rs.430 crore would be allocated for police force modernization.

The government has also sanctioned special risks/hardship allowances to paramilitary personnel at par with the defence forces. Provisions for payment of these allowances are also being proposed in the Budget.

For strengthening border management, an additional amount of Rs.2284 crore, over and above the Interim Budget provision for construction of fences, roads, floodlights on the international borders, is being provided.

Mukherjee is ready to invest more for strengthening the country's paramilitary forces.

The government proposed the launching of a massive program of housing for central paramilitary force personnel.

Allocation under the Jawaharlal Nehru National Urban Renewal Mission was stepped up by 87 percent.

Mukherjee proposed to enhance the allocation for housing and provision of basic amenities to urban poor to 3,973 crores.

Provision for the Brihan Mumbai storm water Drainage project funded through central assistance to address the problem of flooding in Mumbai enhanced from 200 crore rupees to 500 crore rupees.

With a view to reduce the gap between demand and supply in power sector, a steep 160 percent increase in the allocation has been proposed for the Accelerated Power Development and Reform Program.

The Government proposes to setup an expert group to advise on a viable and sustainable system of pricing petroleum products.

This year's budget also proposes the setting up of one handloom mega cluster each in West Bengal and Tamil Nadu, a power loom mega cluster in Rajasthan and mega carpet clusters in Srinagar and Mirzapur.

The proposed budgetary allocation for the Commonwealth Games has been substantially increased from Rs.2, 112 crores in the Interim Budget to Rs.3,472 crores in the Budget for 2009-10.

Expressing concern at the rising fiscal deficit (pegged at 6.8 percent for 2009-10), Mukherjee said that the UPA Government would seek to come back to the path of fiscal consolidation at the earliest.

The fiscal deficit was originally estimated at 2.5 per cent of GDP for 2008-09 but widened to 6.2 per cent after the government cut excise duty rates by 6 per cent and service tax by 2 per cent and increased planned outlay to spur the economy, slowing due to the global financial crisis.

A further rising fiscal deficit will necessitate more market borrowing and again increase the interest burden, which will become a cycle. (ANI)

Please Wait while comments are loading...