budget review 2013

7/28/2019 budget review 2013

1/19

UNION BUDGET 2013-14

- A REVIEWTEAMMBA (AGRIBUSINESS MANAGEMENT)

COLLEGE OF CO-OPERATION, BANKING AND MANAGEMENTKERALA AGRICULTURAL UNIVERSITY, VELLANIKKARA


2/19

There are difficult times butIndia has navigated such times

before and with good policies itwill come through stronger

RAGURAM G RAJANCHIEF ECONOMIC ADVISOR


3/19

ECONOMIC SURVEY

HIGHLIGHTS

10,000 times increase in estimated revenue in 66 years.

Getting back to potential growth rate of 8% is the challengefacing the country.

At present, the economic pace is constrained by :

High fiscal deficit;

Reliance on foreign inflows to finance the CAD;

Lower savings and lower investment;

Tight monetary policy to contain inflation and

Strong external headwinds


4/19

ECONOMIC SURVEY -

CONTINUED

Growth can be accelerated by shifting national spendingfrom consumption to investment.

Weak corporate growth and falling revenue receipts calledfor a wider tax base to raise the Tax GDP Ratio.

Inflation controlled through both monetary and supply

side management. Budget expects to tighten spending and cut subsidies for

controlling rising deficit.


5/19

MOOL MANTRA HIGHERGROWTH LEADING TO INCLUSIVE

AND SUSTAINABLE DEVELOPMENT '


6/19

FOCAL POINT OF THE

BUDGET

FD target of 4.8% of GDP

Standard rates

FD: 3.0%, RD: 1.5% and Effective Revenue

Deficit: 0%

Fiscal consolidation measure to reduce fiscaldeficit


7/19

MEASURES FOR REDUCING TWIN

DEFICIT

FD can be reduced by curtailing government

expenditure

Results in increased credit rating which will attract

foreign investments

Requirement of USD 75 billion to finance CAD,

which can be raised by external transactions.

India needs to encourage foreign investments through

FDI, FII and ECB.

Absence of this will lead to decline in rupee value.


8/19

FINANCIAL INCLUSION

Insurance companies will be empowered to

open branches in tier II cities and below without

prior IRDA approval.

KYC compliances of banks will be sufficient to

acquire insurance policies.


9/19

MEASURES TO BOOST

SAVINGS:

Decline in savings from 36.8% to 30%.

Increase in savings & optimal allocation for productive useleads to higher economic growth.

Savings in financial instruments is 1% compared to othercountries.

For creating attractive savings, introduced schemes like:

- Income limit for RGESS raised to Rs.12 lakhs from Rs.10

lakhs.

- Inflation Indexed Bonds

- Mutual fund investment now subject to tax concession


10/19

TAX PROPOSALS

Direct tax

Surcharge :

On super rich at 10% ,

On domestic companies at 10% ,

Dividend distribution tax at 10% and

On foreign companies at 5%

Surcharge is for 2013-14 to tide over difficult

situation.

No revision in Income Tax slabs.

Tax credit of Rs.2,000 for assessee with income of

Rs.2 lakhs to Rs.5 lakhs.


11/19

TAX PROPOSALS

CONTINUED

House loans up to Rs 25 lakhs will be allowedadditional deduction of interest of Rs.1 lakh.

This benefit will trickle down to industries likesteel, cement, brick, wood, glass, electrical etc.


12/19

TAX PROPOSALS

CONTINUED

Indirect Tax

For boosting export, reduced excise duty of:

- Leather goods manufacturing machinery.

- Pre-forms of precious and semi precious stones.

Raised excise duty on imported luxury goods.

Increased excise duty on SUVs and cigarettes, asusual a whipping horse for the FM.

Proposed to levy service tax on air conditionedrestaurants.


13/19

Everything else can wait; but

agriculture"- JAWAHARLAL NEHRU


14/19

AGRICULTURE

DEVELOPMENT

Nearly 55 % of our population depend on agriculture forlivelihood.

Agricultural credit, subsidies and support price are the key driversof agriculture development.

Targeted agricultural credit of Rs.7,00,000 crores in 2013-14.

Interest subvention scheme has been extended to private sector

schedule commercial banks also.

Green revolution towards eastern India-additional allocation ofRs.1000 crores

FPOs get capital infusion of Rs.10 lakhs which will enable themto borrow working capital from commercial banks.


15/19

INFRASTRUCTURE DEVELOPMENT

AND ENTREPRENEURSHIP

DEVELOPMENT

Infrastructure

The long term debt for infrastructure project throughinfrastructure debt funds amounts to Rs.55 lakhs crsin PPP model

Entrepreneurship

Funding by corporate to set up incubators in academic

institutions qualify for CSR.

To encourage MSMEs tax break, up to 3 years afterthey grow out of category


16/19

CONTINUED

This will divert CSR funds to incubatees and lead India into theleague of innovation and entrepreneurship.

Indian economy is a moving away from managed economy toentrepreneurial economy.

Social sector

Major allocation of expenditure on social sector like health &education ,indicates measure of physical quality of life

Rs.41,561crores allocated for scheduled cast sub plan.

The gender ratio of India is in favour of men, but large crosssection of women need empowerment. For this the budget

proposed to start first women bank in public sector andNirbhaya fund for their protection.


17/19

SKILL DEVELOPMENT

India secret weapon; its youth population.

Vantage point of India is demographic

dividend.

For enhancement of the employability &

productivity, targeted skill development

programme for 9 million youth in 2013-14.

Higher investment in education will nudge ourcountry closer to our millennium development

goals.


18/19

OUTCOMES OF BUDGET Subsidies

The curtailment of subsidies leads to reduction in FD &ultimately credit rating will go up.

FIIs & FDIs

Boost up foreign capital inflow

Goods and Service Tax (GST)

Implementation of GST alone will increase the GDP by 1.25%therefore government should speed up the rolling out of GST.

R & D

India still lags in innovation, R & D spent


19/19

Thank you

Documents

budget review 2013