| Financial Bill, 2006-2007...Government of | | | | (Rs 46.8 billion) next year as against Rs |
| IndiaThe following are the proposals | | | | 3645 crore this year.21.National Health |
| announced by Union Finance Minister of India, | | | | Mission allocation increased to Rs 8207 crore |
| in the Parliament on 28th Feb. 2006. | | | | (Rs 82.07 billion) in next fiscal from Rs |
| | | | 6,553 crore (Rs 65.53 billion) this |
| Changes in Fringe Benefit Tax...as compare | | | | year.22.Government plans to eradicate polio |
| to Financial Bill, 2005-2006Fringe Benefit | | | | by December 2007, Chidambaram said.23.The |
| Tax introduced last year as a revenue raising | | | | Finance Minister said that Rs 14,300 crore |
| measure; justified on the principles of | | | | (Rs 143 billion) for rural employment program |
| horizontal equity and vertical equity; on | | | | would be scheduled during 2006-07, out of |
| review, following changes being | | | | which Rs 11,300 crore (Rs 113 billion) for |
| proposed:B)Value the benefit in the form of | | | | NREG program and Rs 3,000 crore (Rs 30 |
| 'tour and travel' at 5 per cent instead of 20 | | | | billion) for SGRY.24.New towns to be |
| per cent;C)Value benefit in the form of | | | | established on specific themes.25.For gender |
| 'hospitality' and 'use of hotel boarding and | | | | budgeting under various heads, Rs 28,737 |
| lodging facilities', in case of airline | | | | crore (Rs 297.37 billion) has been |
| companies and shipping industry, at 5 per | | | | allocated.26.Special schemes to be announced |
| cent instead of 20 per cent;D)Exclude | | | | for STs and SCs for their |
| expenses on free samples of medicines and of | | | | development.27.India to be made a |
| medical equipment distributed to | | | | manufacturing hub for textiles, steel, metals |
| doctors;E)Exclude expenses incurred on brand | | | | and petroleum products.28.Maulana Azad |
| ambassador and celebrity endorsement; | | | | Educational Foundation corpus doubled to Rs |
| andF)Prescribe a threshold of Rs 100,000 | | | | 200 crore (Rs 2 billion) for greater |
| under section 115WB(1)(c) so that only a | | | | financial support to organizations involved |
| contribution by an employer to an approved | | | | in minority welfare.29.Allocation for |
| superannuation fund in excess of Rs 100,000 | | | | national Urdu education program increased to |
| per year per employee to attract FBT.G)Under | | | | Rs 13 crore (Rs 130 million) from Rs 10 crore |
| section 80C there is already exemption up to | | | | (Rs 100 million) this year.30.One thousand |
| Rs 100,000 for contribution by an employee to | | | | schools for girls of SCs, STs, OBCs and |
| an approved superannuation fund.H)Effective | | | | minorities to be set up.31.A girl child will |
| FBT rate on hospitality reduced to 1.68% from | | | | get Rs 3,000 deposited in a bank account |
| 6.73%.I)Free sample exclusion from FBT to | | | | after she enrolls for eighth class |
| benefit pharma companies.Proposals on Direct | | | | examination and the amount would be given |
| (Income) -TaxA)No changes in the rates of | | | | when she becomes a major.32.Separate window |
| personal income tax, which will remain as | | | | for tenant farmers to ensure loan share. Agri |
| they are currently.B)No change in corporate | | | | credit proposed to be increased to Rs 175,000 |
| income tax rate.C)No new taxes on | | | | crore (Rs 1750 billion) next year as against |
| income.D)One by six scheme for filing of | | | | Rs 1,41,500 crore (Rs 1415 billion), covering |
| income tax returns has been | | | | additional 50 lakh farmers.33.Farmers to |
| abolished.E)Services tax net to be increased | | | | receive short term credit at 7 per |
| which include ATM operations, maintenance and | | | | cent.34.Budgetary loan for PSEs has been |
| management, share transfers, registration, | | | | fixed at Rs 16901 crore (Rs 169.01 billion) |
| international air travel excluding economy | | | | including Rs 2791 crore ( Rs 27.91 billion) |
| class, sponsorship other sports events, | | | | for Railways.35.Ninety-six per cent of the |
| auctioneers, ship management and travel on | | | | golden quadrilateral would be completed by |
| cruise.F)25 per cent across the board | | | | June 2006 and the corridor would be completed |
| increase in securities transaction | | | | by the end of 2008.36.Six lakh hectares of |
| tax.G)Cooperative lending banks and rural | | | | irrigation potential expected to be created |
| development banks to be exempted from taxes | | | | this year. Rupees nine hundred and forty-four |
| under Section 80(B).H)Fixed deposits in | | | | crore (Rs 9.44 billion) released this year |
| scheduled commercial banks with at least five | | | | under the Accelerated Irrigated Benefit |
| year maturity will get tax exemption for | | | | Program.37.Allocation on education increased |
| savings under section 80C of Income Tax | | | | by 31.5 per cent to over Rs 24,150 crore (Rs |
| Act.I)The Rs 10,000 exemption limit for | | | | 241.5 billion) and that for healthcare raised |
| investment in pension funds under Section | | | | by 22 per cent to Rs 12, 546 crore (Rs 125.46 |
| 80CCC has been removed but these investments | | | | billion).38.Entire Rs 1,100 crore (Rs 11 |
| would be brought under Sec.80C subject to a | | | | billion) for rural electrification released |
| ceiling of Rs 1 lakh.J)Donations to only | | | | this year and 10,366 villages to be |
| religious institutions will be exempted from | | | | electrified.39.Five lakh additional class |
| tax.K)Minimum alternative tax on corporates | | | | rooms to be constructed and 150,000 |
| increased from 7.5 per cent to 10 per | | | | additional teachers to be appointed.40.Larger |
| cent.L)More transactions to come under | | | | budgetary support will be given to Bharat |
| PAN.M)Constituency allowances of MLAs to be | | | | Nirmal Programme: Rs 18696 crore (Rs 186.96 |
| treated as constituency allowances of MPs for | | | | billion) to be given which represents a hike |
| income tax purposes.N)Banking cash | | | | of 54 per cent.41.Total budget for |
| transaction tax introduced last year will | | | | north-eastern region will be Rs 12,041 crore |
| continue.O)Fringe Benefit Tax modified. | | | | (Rs 120.41billion) including Rs 1,350 crore |
| Threshold limits raised, but FBT will remain | | | | (Rs 13.5 billion) for the ministry of |
| as it is justified for ensuring horizontal | | | | north-east development.42.A massive |
| equity.P)Minimum alternative tax on | | | | immunization program will be launched to |
| corporates increased from 7.5 per cent to 10 | | | | eradicate polio completely by |
| per cent.Proposals on Indirect -TaxA)Excise | | | | 2007.43.Allocation for mid-day meal scheme to |
| duty on cigarettes increased by five per | | | | be enhanced to Rs 4813 crore (Rs 48.13 |
| cent.B)Many tax exemptions in customs and | | | | billion) next fiscal as against Rs 3014 crore |
| excise to be removed barring SSI.C)April | | | | (Rs 30.14 billion) this year.44.Gross |
| 1,2010 has been fixed as the date for | | | | budgetary support for annual plan expenditure |
| introduction of goods and services tax.D)Peak | | | | has been raised to Rs 1,74,725 crore (Rs |
| customs duty for non agriculture products | | | | 1747.25 billion) for 2006-07 as against Rs |
| reduced from 15 to 12.5 per cent.E)Customs | | | | 1,43,497 crore (Rs 1434.97 billion), an |
| Duty on primary and non-primary steel and | | | | increase of 20.4 per cent.45.Likewise for the |
| alloy products reduced from 10 per cent to | | | | central plan increased to Rs 1,31,285 crore |
| 7.5 per cent.F)Duties on mineral products | | | | (Rs 1312.85 billion) next fiscal.46.Eight |
| reduced from 15 to five per cent, barring | | | | flagship program of the UPA including Sarva |
| some items.G)Duty on ores and concentrates | | | | Shiksha Abhiyan and Mid-Day Meal Scheme will |
| reduced from five to two per cent.H)Duty on | | | | get a total allocation of Rs 60,015 crore (Rs |
| refractories reduced to 7.5 per | | | | 600.15 billion) in 2006-07 as against Rs |
| cent.I)Customs duty reduced on ten anti-AIDS | | | | 34,927 crore (Rs 349.27 billion) in the |
| drugs and 14 anti-cancer drugs to five per | | | | current year.47.Metro in Hyderabad to be |
| cent.J)Customs duty on packaging machines | | | | considered.48.Old age pension to be increased |
| reduced from 15 per cent to five per | | | | to Rs 200 per month for above 75 years of |
| cent.K)Four per cent countervailing duty on | | | | age.49.Allocation for it put at Rs 1430 crore |
| all imports to be levied with few | | | | (Rs 14.3 billion) from the Centre and the |
| exceptions.L)Customs duty on bulk plastics | | | | state government to provide matching |
| reduced from 10 per cent to five per | | | | contribution.50.Rajiv Gandhi drinking water |
| cent.M)To protect vanaspati industry, customs | | | | programme to get Rs 4680 crore (Rs 46.8 |
| duty to be increased to 80 per cent on its | | | | billion) next year as against Rs 3645 crore |
| imports.N)Import duty on all man made fiber | | | | this year.51.National Health Mission |
| has been reduced from 15 per cent to 10 per | | | | allocation increased to Rs 8207 crore (Rs |
| cent.O)Excise duties on man-made fibers and | | | | 82.07 billion) in next fiscal from Rs 6,553 |
| filament yarn reduced from 16 per cent to | | | | crore (Rs 65.53 billion) this |
| eight 8 per cent, since it provides growth | | | | year.52.Government plans to eradicate polio |
| and employment.P)Eight per cent special | | | | by December 2007, Chidambaram said.53.The |
| additional duty on aerated soft drinks and | | | | Finance Minister said that Rs 14,300 crore |
| small cars withdrawn and they will attract | | | | (Rs 143 billion) for rural employment |
| only 16 per cent CENVAT excise duty instead | | | | programme would be scheduled during 2006-07, |
| of 24 per cent earlier.Q)Reduction of duty on | | | | out of which Rs 11,300 crore (Rs 113 billion) |
| footwear priced between Rs 250 and Rs 750 | | | | for NREG programme and Rs 3,000 crore (Rs 30 |
| from 16 per cent to eight per cent.R)Duty on | | | | billion) for SGRY.54.New towns to be |
| specialized writing paper reduced form 16 to | | | | established on specific themes.55.For gender |
| 12 per cent.S)Excise duty on compact | | | | budgeting under various heads, Rs 28,737 |
| fluorescent lamps reduced from 16 to eight | | | | crore (Rs 297.37 billion) has been |
| per cent.T)Cess on domestically produced | | | | allocated.56.Special schemes to be announced |
| petroleum crude has been raised from Rs.1800 | | | | for STs and SCs for their |
| per tonne to Rs.2500 per tonne but the entire | | | | development.57.India to be made a |
| amount to be absorbed by oil producing | | | | manufacturing hub for textiles, steel, metals |
| companiesOther Highlights of General | | | | and petroleum products.58.Maulana Azad |
| Budgets...Others Proposals1.The defence | | | | Educational Foundation corpus doubled to Rs |
| budget raised to Rs 89,000 crore (Rs 890 | | | | 200 crore (Rs 2 billion) for greater |
| billion) in 2006-07 from Rs 83,000 crore (Rs | | | | financial support to organizations involved |
| 830 billion) in the current year. Of this Rs | | | | in minority welfare.59.Allocation for |
| 37,458 crore (Rs 374.58 billion) would be | | | | national Urdu education programme increased |
| capital expenditure.2.Rs 100 crore special | | | | to Rs 13 crore (Rs 130 million) from Rs 10 |
| grant for Punjab Agricultural University as a | | | | crore (Rs 100 million) this year.60.One |
| centre of excellence for its commendable work | | | | thousand schools for girls of SCs, STs, OBCs |
| in agricultural research.3.500 ITIs to be | | | | and minorities to be set up.61.A girl child |
| upgraded in five years. Work has already | | | | will get Rs 3,000 deposited in a bank account |
| started in 100 ITIs and would be taken up in | | | | after she enrolls for eighth class |
| the remaining 400 institutes soon. Rs 97 | | | | examination and the amount would be given |
| crore (Rs 970 million) allocated in | | | | when she becomes a major.62.Separate window |
| 2006-07.4.Special assistance of Rs 848 crore | | | | for tenant farmers to ensure loan share. Agri |
| (Rs 8.48 billion) for Jammu and Kashmir for | | | | credit proposed to be increased to Rs 175,000 |
| its reconstruction fund, including Rs 230 | | | | crore (Rs 1750 billion) next year as against |
| crore (Rs 2.30 billion) for Baglihar project. | | | | Rs 1,41,500 crore (Rs 1415 billion), covering |
| This will be in addition to 2006-07 state | | | | additional 50 lakh farmers.63.Farmers to |
| plan of Rs 2,300 crore (Rs 23 billion).5.Rs | | | | receive short term credit at 7 per |
| 10 crore (Rs 100 million) allocated for | | | | cent.64.Budgetary loan for PSEs has been |
| preparatory work for celebrating the 150th | | | | fixed at Rs 16901 crore (Rs 169.01 billion) |
| anniversary of the First War of Independence | | | | including Rs 2791 crore ( Rs 27.91 billion) |
| of 1857 in a befitting manner.6.To safeguard | | | | for Railways.What they have to say about the |
| old art forms, Vedic chanting and Ram Lila | | | | Financial Bill, 2006-2007Saroj K Poddar, |
| have been declared UNESCO heritage and will | | | | President, FICCI: The most significant points |
| be granted Rs 5 crore (Rs 50 | | | | in the Budget are the enhanced allocations |
| million).7.Comprehensive Insurance Regulatory | | | | for infrastructure like roads. I am sure this |
| and Development Authority bill to be | | | | will drive growth. |
| introduced in 2006-07 incorporating the | | | | |
| recommendations of K P Narasimhan Committee | | | | We are also glad that Finance Minister P |
| on insurance sector revamp. The committee has | | | | Chidambaram has announced a series of |
| already submitted its report to government | | | | incentives in the agriculture sector. He has |
| and IRDA is studying its recommendations.8.An | | | | made good allocation for agriculture. This |
| Investors Protection Fund will be set up and | | | | will increase agricultural output and it will |
| funded by fines and penalties to safeguard | | | | in turn help develop the rural areas.One area |
| the interests of retail investors.9.FII | | | | of concern in the Budget is power generation. |
| investment limit in stock markets will be | | | | The finance minister has now announced five |
| raised from $1.75 billion to $2 billion to | | | | new power projects, and we hope these new |
| deepen, strengthen and broaden the | | | | projects will accelerate growth in the |
| market.10.Raise in the aggregate investment | | | | industrial sector. But our concern is whether |
| of overseas investors from $1 billion to $2 | | | | the power projects will be executed on |
| billion is proposed.11.An investment | | | | time.It is also great that Chidambaram has |
| protection fund under the aegis of SEBI would | | | | not touched income tax rates. I believe |
| be set up.12.Rs 50 cr (Rs 500 million) for | | | | reducing the excise tax rates will lead to |
| Mumbai, Kolkata, Chennai varsities.13.Eighty | | | | more manufacturing. The finance minister's |
| two power projects are in various stages of | | | | idea to introduce goods and services tax by |
| implementation in the country to overcome | | | | 2010 is a good move forward.R Seshasayee, |
| power shortage. This when completed in 1 to 3 | | | | Vice President, CII: I feel overall the |
| years will generate 33,000 mws of power in | | | | Budget is good. The good news is that we must |
| PSUs and 6500 mws in private sector. Of this, | | | | celebrate the tax-GDP ratio of 10 per cent. |
| 15,000 mw of power generation is to be | | | | It proves our economy has arrived. The |
| installed by March 2007.14.Five mega power | | | | disappointing factor is the continuation of |
| projects of Rs 4000 crore (Rs 40 billion) | | | | bank withdrawal tax. |
| each is to be set up for which clearance is | | | | |
| to be given by March 31, 2006. Of this, one | | | | Another good thing about the Budget is that |
| each will come in Chhattisgarh and MP. The | | | | it continues to put emphasis on education. |
| remaining three will be in coastal areas of | | | | |
| Maharashtra, Karnataka and Gujarat.15.NHAI to | | | | The overall approach is good for economy and |
| be reconstituted to make it more | | | | country if we continue to pay more attention |
| effective.16.A new deep draft port to be set | | | | on education.The above mentioned proposals |
| up in West Bengal. A study is to be | | | | are as presented by Union Finance Minister of |
| conducted.17.The National Institute of Port | | | | India Mr. P. Chidambaram in Parliament on |
| Management in Chennai to be renamed as | | | | 28th Feb. 2006. These proposals are debatable |
| National Maritime Academy and converted into | | | | and subject to change.Compiled and prepared |
| a Central University with branches in Mumbai, | | | | by: Sanjeev Sharma (Himachali) |
| Viskhapatnam and Kolkata.18.Old age pension | | | | |
| to be increased to Rs 200 per month for above | | | | Chandigarh-India |
| 75 years of age.19.Allocation for it put at | | | | |
| Rs 1430 crore (Rs 14.3 billion) from the | | | | (Mobile: +91-9876328841) |
| Centre and the state government to provide | | | | |
| matching contribution.20.Rajiv Gandhi | | | | (E-mail: ; sanjeev. |
| drinking water program to get Rs 4680 crore | | | | |