[nukkad] Highlights of the Union Budget

["rajababu" <>]

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> Another version of the highlights of the Union Budget
>
> Highlights of the Union Budget 2001-2002
> Union Finance Minister Yashwant Sinha on Wednesday presented an ambitious
> and bold budget with a strong reform direction.
> The budget has introduced far-reaching reforms in:
> ·       Labour
> ·       Core sector
> ·       Capital account convertibility
> ·       Reducing cost of capital
> ·       Debt market restructuring.
> ·       Agri and Rural development reforms with special focus on
management
> of food economy
> ·       Fillip to the primary market
> ·       Rationalising excise duty structure
> ·       Widening the service tax net
> ·       Initiating decontrol of prices including urea and sugar
>
> Budget Estimates
> ·       The target of 5.1% of fiscal deficit in 2000-01 has been achieved
> first time in many years.
> ·       Total expenditure in the budget estimates for 2001-2002 is
estimated
> at Rs 3752.23 billion, of which Rs 1001 billion is for plan and Rs 2751.23
> billion for non-plan.
> ·       The budget support for Central, State and UT Plans placed
increased
> by Rs 138.62 billion (16%) over revised estimates of 2000-2001 to Rs 1001
> billion.
> ·       Gross budgetary support for the Central Plan being enhanced from
Rs
> 482.69 billion in the revised estimates 2000-2001 to Rs 594.56 billion in
> 2001-2002.
> ·       Central Plan assistance to States and Union Territories in
2001-2002
> increased to Rs 406.44 billion from Rs 379.69 billion in the revised
> estimates 2000-2001.
> ·       Non-plan expenditure in 2001-2002 is estimated to be Rs 2751.23
> billion compared to Rs 2492.85 billion in revised estimates for 2000-2001.
> Financial sector reforms
> ·       Financial sector and capital markets reforms to continue.
> ·       A Clearing Corporation for further orderly development of money
> market (including repo), Government Securities market and settlement of
> forex transactions will be set up.
> ·       RBI to set up an electronic Negotiated Dealing System by June 2001
> to facilitate transparent electronic bidding in auctions and dealings in
> Government securities on a real time basis.
> ·       Reserve Bank of India to set up Electronic Fund Transfer (EFT) and
> Real Time Gross Settlement Systems (RTGs) within the next year.
> ·       Removal of taxation anomalies to promote the issuance of STRIPS,
> zero coupon bonds, deep discount bonds, and the like Public Debt Act to be
> replaced by Government Securities Act.
> ·       7 more Debt Recovery Tribunals to be set up during 2001-02.
> ·       Legislation to facilitate foreclosure and enforcement of
securities
> in cases of default to be introduced.
> ·       Banking Services Recruitment Boards to be abolished by July
31,2001
> or earlier. Banks to do all future recruitment themselves.
> Structural reforms
> ·       The deadline of March 2002 for dismantling of the Administered
> Pricing Mechanism (APM) in the petroleum sector to be adhered to.
> ·       Phased programme of complete decontrol of urea by April 1, 2006 as
> recommended by the Expenditure Reforms Commission.
> ·       The unit specific Retention price Scheme (RPS) to be replaced by
the
> Group Concession Scheme with effect from April 1,2001.
> ·       The rate of concession for urea units based on naphtha/FO/LSHS
will
> be linked to international prices of these feed stocks with effect from
> April 1, 2001.
> ·       As a first step towards full decontrol of Sugar futures/forward
> trading in sugar to be introduced. The retail issue price of sugar under
the
> PDS is being revised to Rs.13.25 per kg. with effect from March 1, 2001.
> Industrial Restructuring
> ·       SICA to be repealed.
> ·       The Companies Act to be amended in order to set up a National
> Company Law Tribunal.
> ·       Prior Government approval for effecting lay-off, retrenchment and
> closure required by industrial establishments employing not less than 100
> workers to be revised to those employing not less than 1000 workers.
> ·       The separation compensation will be increased from 15 days to 45
> days for every completed year of service.
> ·       Contract Labour Act to be amended to facilitate outsourcing of
> activities and contract appointments. It would provide protection to
labour
> engaged in outsourced activities in terms of their health, safety,
welfare,
> social security, etc.
> ·       New "Ashraya Bima Yojana" to provide compensation of up to 30% of
> last drawn annual pay for a period of one year to workers who lose their
> jobs.
> ·       The four Government owned general insurance companies will
> administer this policy on a "No Profit No Loss: basis and will announce
full
> details by June 2001.
> Public sector restructuring
> ·       Privatisation to be accelerated
> ·       An amount of Rs 70 billion out of the expected receipt of Rs 120
> billion from divestment will be used for providing restructuring
assistance
> to PSUs, safety net to workers and reduction of debt burden.
> ·       Subject to realisation of the anticipated receipts of divestment a
> sum of Rs 50 billion will be used to provide additional budgetary support
> for the Plan primarily in the social and infrastructure sectors.
> Agriculture and Rural Development
> ·       Corpus of NABARD's RIDF VII increased from Rs.4,500 crore to Rs 50
> billion next year and interest charged reduced from 11.5 per cent to 10.5
> per cent.
> ·       Pradhan Mantri Gram Sadak Yojana (Rs 25 billion) to provide
> connectivity of every village with a population of over 1,000 persons
> through good all weather roads by the year 2003 and those with a
population
> of up to 500 persons by the year 2007.
> ·       Greater involvement of state government in procurement and
> distribution of foodgrains for PDS.
> ·       Financial assistance to the state governments to enable them to
> procure and distribute foodgrains to BPL families at subsidised rates.
> ·       Essential Commodities Act, 1955 to be reviewed and restrictions on
> the free inter-state movement of foodgrains to be removed.
> ·       The number of commodities declared as essential under the Act to
be
> brought down.
> IN A NUTSHELL
> Tax rate charges:
> No change in Direct tax rates
> All surcharges on corporate and non-corporate taxes except for calamity
> relief abolished
> One by six schemes extended to all Urban areas
> TDS extended to commission and brokerage incomes
> Wind Fall income - lotteries, games shows-at 30 per cent
> All companies to file a mandatory return
> No tax exemptions on interest paid on ECBs
> No tax gains if invested in Primary issues
> Dividend tax reduced to 10 per cent
> 20 year Tax holiday for core infrastructure
> 10 years tax holiday for infra in airports
> 15 years tax holiday for telecom projects
> Interest exemption on housing loans raised to Rs 150,000
> Foreign telecast channels to be taxed
> Duty structure changes:
> Rate structure rationalised: One CENVAT rate of 16 per cent and one
special
> excise duty of 16 per cent introduced
> Services Tax net widen
> 10 per cent surcharge on Customs Duty abolished
> Peak Custom Duty down to 35 per cent
> Customs Duty on select and IT products down to 15 per cent
> Second hand car customs duty at 180 per cent
> Customs Duty on cement and clinkers down to 25 per cent
> Duty on Gold reduced to Rs 250 per 10 grams
> Peak Customs Duty to be reduced to 20 per cent in 3 years
> Budget Estimates:
> Fiscal Deficit target 4.7 per cent
> Expenditure set at Rs 3752.23 billion
> Total Revenues Receipts at Rs 1630.31 billion
> Macro policy changes: a) Move towards Capital Account Convertibility
> FIIs can invest up to 49% in Domestic Companies
> Domestic Companies can invest 10 times their export earnings or 100
million
> abroad
> RBI to issue guidelines for companies
> FDI in NBFC upto 100% thru automatic route
> b) Interest rate on Small Savings cut by 1.5 percentage points c) Interest
> on Central Loans to State government reduced by 50 basis points d) Labour
> Reforms introduced
> Industrial Disputes Act to be amended
> Retrenchment compensation increased to 45 days from 15 days
> For companies employoing less tha 1000, retrenemnt made easier
> Contract Labour Act to be amended
> Safety net for workers thru group insurance schme
> e) Divestment:
> Rs 120-billion target
> Divestment of 12 PSUs to be completed this years; including VSNL,
Air-India
> and Maruti
> Rs 50 billion set aside for outlay for infrastructure and social sectors
> f) Second-hand car imports liberalised g) Prices decontrolled:
> Urea Prices to be decontrolled by 2006
> Decontrol of Sugar; Future and Options to be introduced
> g. Policy changes at sectoral level a. Agricultural:
> Interest charged by Nabard reduced 1 per centage point to 10.5 per cent
> RIDF corpus increased to Rs 50 billion from Rs 45 billion
> Credit flow to agriculture to be increased by 2 per cent
> Personal insurance for Kisan credit card holders
> Nabrad to help agri graduates to launch agri clinics and agri business
> centre as a part of extension services
> h) Strategy of Budget:
> Speeding up of Agricultural Reforms
> Change management of the Food Economy
> Improve infrastucture
> Deepen capital markets
> Improve quality of government expenditure
> Widening of tax base
> Structural reforms
>
>



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