UNION BUDGET 2010-11 PROPOSALS FOR EACH SECTOR

POWER
•Plan allocation to renewable energy ministry hiked
•Coal regulatory authority to be set up
•National clean energy fund to be set up
TEXTILES
•One-time 200 cr for allotment to Tripura Textile sector in Tamil Nadu
Infrastructure
•Plan allocation doubled for power sector
•To construct 20 km highway everyday
•13% rise in allocation for transport sector
•5 mega food parks to be set up
•Infrastructure thrust to be maintained in rural and urban areas
•Govt. committed to SEZ growth
AGRICULTURE
•Budget gives strong focus to boost agri production
•Rashtriya Krishi Vikas Yojna to get Rs 300 cr
•Four pronged strategy to boost agri production
•Repayment of loans to be extended to 6 months in drought and flood hit areas
•Fertilizer subsidy to be reduced
•Failure in agriculture sector compensated by good show in manufacturing sector
EXPORTS
•2% interest subvention for exports extended
BANKING & FINANCE
•Rs 16,500 cr allocated to public sector banks
•Divestment proceedings to be spent on social sector
•Double digit food inflation a worry
•RBI considering giving banking licenses to more private players
•Medium term growth plan to cross double-digit figure
•Private investment can sustain 9% growth
•Need to review fiscal stimulus
•GDP to reach 10% soon
•Efforts on to reduce inflation in two months

UNION BUDGET 2010-11 PROPOSALS

1. Individual / HUF Tax Slabs.
Up to 1,60,000 :- Nil
1,60,000 - 5,00,000 :- 10%
5,00,000 – 8,00,000 :- 20%
Above 8,00,000 :- 30%
2. Income tax return form to be made simple, Saral 2 form for individuals to come
into force, it will have only 2 pages
3. New Direct Tax Code by April, 2011
4. Additional Deduction of 20,000/- available for investment in Long Term
Infrastructure Bonds. This benefit is available above present 1,00,000/- on
savings instrument available U/s 80C
5. MAT Increased from 15% to 18% of the Book Profits.
6. Surcharge for Domestic Companies reduced from 10% to 7.5%
7. Relaxation of Audit with Business Income up to Rs.60 Lacs & Professional Income
Up to Rs.15 Lacs.
8. Threshold limit for TDS applicability to be rationalized.
9. No capital gains tax on conversion of a business entity into LPP
10.It is proposed to increase the interest chargeable u/s 201(1A) for late payment
of TDS from one percent to one and one -half percent for every month or part of
a month
11.Custom duty on gold to be reduced
12.Rationalisation of custom duty on gaming software
13.Excise duty on petrol, diesel increased
14.Mobile phones to be cheaper
15.Peak custom duty unchanged at 10%
16.5% custom duty on crude petrol back
17.Petro products to cost more
18.Cement to cost more
19.Large cars, SUVs to cost more
20.Cigarettes, non-smoking, chewing tobacco to cost more
21.Cross Tax Receipts Rs 7. 46 Lakh crore
22.R&D deduction hiked to 200%
23.Fiscal stimulus to be partially rolled back
24.GST to be implemented by 2011
25.Fuel price hike in due course
26.Defence allocation up by 6000 cr
27.Technology Advisory Group to function under Nandan Nilekani
28.15% rise in plan expenditure
29.Increase in allocation for school education
30.Interest subvention to benefit handicraft, jewellery and gem exports
31.Social sector spending up to 1.37 lakh crore
32.Bharat Nirman outlay Rs 48,000 cr
33.NREGA allocation Rs 40,100 cr
34.Banks in all villages with over 2000 population
35.Subsidy for affordable housing increased
36.Special allocation for unorganized labour sector
37.Slum free India at the earliest

BUDGET EXPECTIONS

The budget is important event in the country effecting planning’s of man people but what can we expect from the budget. The following points one can expect from the budget.
1.Full / Phase manner rollback of stimulus package.
2.Hike in personal income tax basic limits.
3.hike in excise duty
4.Benefits to export oriented sectors.
5.More benefits for software industry
6.Review of the STT system due to implementation of New Direct Tax Code from 2011-12
7.Road map for implementation of GST
8.Disinvestment of other PSU
9.Certain announcements with regard to housing sectors
10.Strategy for bringing down the Fiscal deficit.
11.Infrastructure spending for development of Roads etc.
12.The GOI may also consider to bring down subsidy for fertilizers due to gas based production.
13.Reconsider tax benefits U/s80C
14.May bring in more stiff provisions for tax evasion

I feel the budget may surprise many of us because the main effort will be to bring down deficit without hurting the growth of the country. However with inflation at 8.5% and likely to cross 10% in near term, the only option available to FM is to Full / phase manner rollback of stimulus package. However these packages will continue to EOU because the export is just picked up for last 2 months or so with increase of 10%. The main beneficiary will be the ITES, Textiles & EOU etc.
Therefore taking into consideration above points i feel that budget will be a disciple affairs and one should not expect more from FM. The market may react negatively with regard to rollback of stimulus packages & Hike in petrol etc.
WITH ROLLBACK OF STIMULAS the IIP will stabilise at around 12%, GDP at 7% and inflation will be at 3-4% after rollback for first FY and growth will be at better rate provided there is no policy overlapse from GOI.