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HIGHLIGHTS - 2010/11 budget presented to parliament

Source : REUTERS
Last Updated: Fri, Feb 26, 2010 17:00 hrs
HIGHLIGHTS - 2010/11 budget presented to parliament

Finance Minister Pranab Mukherjee presents his annual budget on Friday.

Following are the highlights of the budget:

BORROWING

* Gross market borrowing for 2010/11 seen at 4.57 trillion rupees ($98.9 billion), Forecast in Reuters poll was 4.61 trillion.

* Net market borrowing for 2010/11 seen at 3.45 trillion rupees.

FISCAL DEFICIT

* Fiscal deficit seen at 6.9 pct of GDP in 2009/10

* Fiscal deficit seen at 5.5 pct of GDP in 2010/11 (Reuters poll 5.6 pct)

* Fiscal deficit seen at 4.8 pct of GDP in 2011/12; 4.1 pct in 2012/13.

* Fiscal deficit seen at 3.81 trillion rupees in 2010/11; seen at 4.14 trillion rupees in 2009/10.

SPENDING

* Total expenditure in 2010/11 11.87 trillion rupees.

* 15 pct increase in plan expenditure in 2010/11

* 2009/10 revised estimate for tax collection 7.47 trillion rupees.

* Defence spending for 2010/11 at 1.47 trillion rupees.

* To invest 1.73 trillion rupees in infrastructure in 2010/11.

* Social sector spending at 1.38 trillion rupees for FY11.

* To provide 661 billion rupees for rural development.

REVENUE

* Total revenue receipts for 2010/11 seen at 6.82 trillion rupees.

* Revenue deficit seen at 4 pct of GDP in 2010/11

*Indirect tax proposals to result in net revenue gain of 435 billion rupees.

* Direct tax proposals to result in revenue loss of 260 billion rupees.

TAXES

* Federal excise duty on non petroleum products to go up to 10 pct from 8 pct

* Raises federal excise duty on petrol, diesel by 1 rupee per litre

* Government will be in a position to implement direct tax code from April 2011

* Aims to introduce Goods and Services Tax in April 2011

* Raises minimum alternate tax rate to 18 pct

* To impose clean energy levy of 50 rupees/tonne on coal, including imports

* Service tax rate kept unchanged at 10 pct

* Personal income tax slabs widened

SUBSIDIES

* Subsidy bill seen at 1.16 trillion rupees.

* Petroleum subsidy for 2010/11 seen at 31.08 billion rupees

* Fertiliser subsidy for 2010/11 seen at 499.8 billion rupees

* To provide government subsidy in cash instead of bonds for fertilisers, oil

* To provide 2 pct loan subsidy to farmers

STAKE SALES AND RADIO AIRWAVES AUCTION

* Estimates disinvestment proceeds of 400 bln rupees in 2010/11.

* Estimates 350 billion rupees in 2010/11 from 3G wireless radio spectrum auction.

CREDIT TO SECTORS

* 3.7 trillion rupees farm credit target for FY11.

* External commercial borrowing will be available for food storage industries

* India Infrastructure Finance Company Limited to lend 200 billion rupees by March 2011.

MUKHERJEE ON THE STATE OF ECONOMY

* Final FY10 GDP figure maybe higher than estimate of 7.2 pct

* Need to review public spending

* Government to simplify FDI policy

* Roadmap within six months to cut public debt

* To set up finance sector legislative reform commission

* "The Indian economy now, is in a far better position than it was a year ago."

* "The first challenge before us is to quickly revert to the high GDP growth path of 9 percent."

* "After successfully managing the effects of the global slowdown, we need to strengthen the domestic macroeconomic environment to help consolidate the rebound in growth."

* "We need to reduce the stimulus, important to the economy, and move towards the preferred path of fiscal consolidation."

* "We need to make growth more broad based and ensure the supply demand imbalances are better managed."

(For full coverage of India Budget 2010, please click http://in.reuters.com/news/globalcoverage/india-budget-2010)

(Compiled by Krittivas Mukherjee and Matthias Williams)

(For more news on Reuters Money visit http://www.reutersmoney.in)



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