28 February 2010

Summary of Union Budget 2010

Friday, February 26, 2010
Ministry of Finance

Summary of Union Budget 2010-11
13:24 IST




The Union Budget this year has aimed to focus on inclusive growth and insuring food security. These concerns for aam aadami have gone hand in hand with credible measures for improving investment climate, strengthening infrastructure and fiscal consolidation. As the country looks to 'quickly revert to high GDP growth path' in the wake of 'uncertain times', concerns for inclusive growth targeting the disadvantaged sections form the defining features of the Budget.


Many new initiatives have been introduced for sustained and inclusive growth. These include setting up of Mahila Kisan Sashaktikaran Pariyojana, Financial Stability and Development Council, Gold Regulatory Authority, Technical Advisory Group for Unique Projects, National Mission for Delivery of Justice and Legal Reforms, Independent Evaluation Office  and National Clean Energy Fund,


Presenting the Union Budget 2010-11 in the Lok Sabha today, the Finance Minister Shri Pranab Mukherjee, said that three challenges would continue to engage the Indian policy planners for next few years. The first challenge is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit growth barrier. The second challenge is to consolidate recent gains in making development more inclusive. The third challenge is to remove weaknesses at different levels of governance and to improve public delivery mechanism. The Budget, therefore, focuses on fiscal consolidation, making growth more broad-based and ensuring that supply-demand imbalances are better managed.


The Minister expressed the hope that the economy will reach 10 per cent growth in not too distant a future. The Minister explained that after a fall in GDP growth in 2008-09 to 6.7 per cent, the growth has built up and 7.2 per cent growth is expected in 2009-10. The Minister said that the recovery is very encouraging as it has come  about despite negative growth in agriculture sector. The growth rate in manufacturing in December 2009 was 18.5 per cent, the highest in past two decades. Similarly, there are also signs of a turnaround in the merchandise exports with a positive growth in November and December 2009 after a decline in about twelve successive months.


Expressing concern at the emergence of double digit food inflation, the Minister said that the Government has set in motion steps in consultation with the State Chief Ministers to bring down the inflation in the next few months and ensure better management of food security.





The Minister said that now that the recovery has taken roots, there is a need to review public spending, mobilize resources and gear them towards building the productivity of the economy.


The government will follow the recommendations of the Thirteenth Finance Commission by capping the government debt. The Commission has recommended a capping of the combined debt of the Centre and the States at 68 per cent of the GDP to be achieved by 2014-15.

For the first time, the Government would target an explicit reduction in its domestic public debt-GDP ratio. A status paper would be brought out within six months, giving a detailed analysis of the situation and a road map for curtailing the overall public debt. This would be followed by an annual report on the subject.


The Finance Minister expressed the hope that a broad consensus would be achieved on the Direct Tax Code and the Goods and Service Tax (GST) and these would be introduced from April 2011.




The Finance Minister said that a number of steps have been taken to simplify the Foreign Direct Investment (FDI) regime. The government also intends to make the FDI policy user-friendly by consolidating all prior regulations and guidelines into one comprehensive document. This would enhance clarity and predictability of our FDI policy to foreign investors, he said.


With a view to strengthen and institutionalize the mechanism for maintaining financial stability, Government has decided to set up an apex-level Financial Stability and Development Council. It would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates.


Towards strengthening the banking system, the Budget provides Rs.16500 crore as Tier-I capital. It would ensure that the Public Sector Banks are able to attain a minimum 8 per cent Tier-I Capital by March 2011. Further capital would also be infused into the Regional Rural Banks (RRBs). The Minister also informed that the RBI is considering giving some additional banking licenses to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBI's eligibility criteria.





A four-pronged strategy would be followed to spur growth in agriculture sector. The elements of the strategy are (a) agricultural production; (b) reduction in wastage of produce; (c) credit support to farmers; and (d) a thrust to the food processing sector.


The Budget provides Rs.400 crore for extending the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa, with the active involvement of Gram Sabhas and the farming families.


60,000 'pulses and oil seed villages' will be organized in rainfed areas with an outlay of Rs.300 crore during 2010-11. This will provide water harvesting, watershed management and soil health facilities to enhance to productivity of dryland farming areas. Another Rs.200 crore have been provided in the Budget for conservation farming.


To improve the storage capacity of food grains, Food Corporation of India is being allowed to hire godowns from private parties for a guaranteed period of seven years. This period so far was five years.

The target for farm credit is being raised to Rs.3,75,000 crore in 2010-11 from Rs.3,25,000 crore in the current year.


The period for repayment of loans under the Debt Waiver and Debt Relief Scheme is being extended by six months to June 30,2010.


The interest subvention for timely repayment of crop loans is being raised from 1 per cent to 2 per cent. Thus, the effective rate of interest for crop loans for farmers who repay their crop loan as per schedule will now be 5 per cent per year.


Five more Mega Food Parks will be set up in addition to the 10 already being established. External Commercial Borrowings will henceforth be available for cold storage, farm level pre-cooling and preservation and storage of agricultural and allied produce marine products and meat.




The Budget provides Rs.1,73,552 crore for infrastructure, accounting for over 46 per cent of the total Plan allocation.


The allocation for road transport is being increased by over 13 per cent from Rs 17,520 crore to Rs.19,894 crore.


Disbursement for infrastructure by India Infrastructure Finance Company Ltd(IIFCL) is expected to reach Rs.20,000 crore in 2010-11 as against Rs.9,000 crore this year.  Refinancing of bank landing to infrastructure projects by IIFCL is expected to be more than double in 2010-11.   





The Plan allocation for power sector is being more than doubled from Rs.2,230 crore in 2009-10 to Rs.5,130 crore in 2010-11.


 A Coal Regulatory Authority is proposed to be set up for creating level playing field in the coal sector and resolving various issues.


The Plan outlay for New and Renewal Energy Ministry is being increased by 61 per cent from Rs. 620 crore to Rs.1,000 crore, especially to support the ambitious solar energy programme.




Stating that inclusive development is an act of faith for the UPA government, the Finance Minister said that after the Right to Information, Right to Work and Right to Education, the government is now ready with the draft Food Security Bill.  A sums of Rs.1,37,674 crore, representing 37 per cent of the total outlay, will be spent on social sector programmes.


Plan Allocation for school education is being increased from Rs.26,800 crore to Rs.31,036 crore to support the children's rights to free and compulsory education. In addition, States will have an access to Rs. 3,675 crore for elementary education under the Finance Commission grant for 2010-11.   


 It has been decided to provide appropriate banking facilities to habitations having population in excess of 2000 by March 2012. It is also proposed to extend insurance and other services to the targeted beneficiaries. These provisions are expected to cover 60,000 habitations.


Rs.66,100 crore have been provided for Rural Development. Mahatma Gandhi National Rural Employment Guarantee Scheme gets Rs.40,100 crore and Bharat Nirman Programme, Rs.48,000 crore.


Indira Awas Yojana gets Rs.10,000 crore. The unit cost under this scheme is being raised to Rs.45,000 in plain areas and Rs.48500 in hilly areas to cover the increase in cost of construction of houses.   


The allocation to Backward Region Grant Fund is being enhanced by 26 per cent from Rs.5,800 crore to Rs.7,300 crore. An additional Central assistance of Rs.1,200 crore is being provided for drought mitigation in the Bundelkhand region.


Swarna Jayanti Shahari Rozgar Yojana gets 75 per cent increase in allocation from Rs.3,060 crore to Rs.5,400 crore. In addition, the allocation for Housing and Urban Poverty Alleviation is also being raised from Rs.850 crore to Rs.1,000 crore in 2010-11.


The 1 per cent interest subvention on housing loans upto Rs.10 lakh (where the cost of the house does not exceed Rs.20 lakh) provided in the Budget for 2009-10 has been extended by another year.


Rajiv Awas Yojana, a scheme for housing to slum dwellers and urban poor, gets a huge jump in allocation from Rs.150 crore last year to Rs.1,270 crore in 2010-11.



 It has been decided to set up a National Social Security Fund for unorganized sector workers with an initial allocation of Rs.1,000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc.  


The Rashtriya Swasthya Bima Joyana is being extended to all Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year.


The Swavalamban initiative started last year, under which the government contributes Rs.1,000 per year to each New Pension Scheme (NPS) account, will now be available for another three years.


Plan outlay for Women and Child Development is being stepped up by 50 per cent. A Mahila Kisan Sashaktikaran Pariyojana is being launched to meet the specific needs of women farmers.


The Plan outlay of Ministry of Social Justice and Empowerment gets a boost of 80 per cent to Rs.4,500 crore. Besides supporting the programmes for the target beneficiaries, the Ministry will be able to raise the rates for scholarship schemes for SC and OBC students. Similarly, the Ministry of Minority Affairs allocation has been raised by 50 per cent to Rs.2,600 crore.




The government proposes to set up a Financial Sector Legislative Reforms Commission to rewrite and clean up the financial sector laws to bring them in line with the requirements of the sector.


Rs.1,900 crore has been allocated for the Unique Identification Authority of India.


A Technology Advisory Group for Unique Projects (TAGUP) is proposed to be set up under the Chairmanship of Shri Nandan Nilekani for creation of reliable and secure IT projects.


Defence gets an allocation of Rs.1,47,344 crore. As a one time confidence building measure in Jammu and Kashmir about 2000 youths will be recruited as constable in five Central Para-Military forces in 2010. Adequate funds will be made available to support the action plan to be prepared by the Planning Commission for development of 33 left wing extremist affected districts.

An Independent Evaluation Office is to be set up to undertake impartial and objective assessment of various public programmes and improve the effectiveness of public interventions in Planning Commission.

A National Mission for Delivery of Justice and Legal Reforms is also to be set up.




The Finance Minister emphasized the need for continued Tax Reforms. The Tax Returns form are being simplified and the Income Tax Department is now ready to notify Saral-2 forms for individual salary tax payers. The Sevottam project started in four cities to provide a single window system for registration and grievance redressal will be extended to four more cities. Two more centres will be opened for bulk processing of Tax Returns. The Indirect Tax Administrations are being revamped to achieve the roll out of Goods and Services Tax (GST). Rs.1133 crore have been budgeted for a mission mode project to achieve this.


Major relief has been provided to individual tax payers by enhancing exemption limit and reducing tax in different slabs of personal income.. Deduction of an additional amount of Rs.20000 for investment in long term infrastructure bonds will be available in addition to the existing limit of Rs.1 lakh available for specified savings.


The surcharge on domestic companies is being reduced from 10 per cent to 7.5 per cent. However, the minimum alternate tax (MAT) is being increased from 15 per cent to 18 per cent.        


Exemptions and deductions have been provided to increase spending on research.


The investment linked deduction to new hotels of two star category and above is being extended to give boost to investment in Tourism sector.


A one time interim relief is being provided to the housing and real estate sector by allowing pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits.


The Finance Minister has proposed to partially roll back the rate deduction in Central Excise duties and enhance the standard rate on all non-petroleum products from 8 per cent to 10 per cent ad valorem. The specific rates of duty applicable to Portland cement and cement clinker are also being adjusted upwards proportionately. Similarly, the ad valorem component of excise duty on large cars, multi-utility vehicles and sports utility vehicles which was reduced as part of the first stimulus package, is being increased by 2 percentage points to 22 per cent.


The basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products is being enhanced. The Central Excise Duty on petrol and diesel is being enhanced by Rs.1 per litre.


Excise duty on non-smoking tobacco is being enhanced. In addition a compounded levy scheme is being introduced by chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch making machines.


A number of duty concessions are being proposed to support agriculture and allied sector. Mechanised handling systems in warehouses will get project import status with a concessional import duty of 5 per cent. Installation and commissioning of such equipment will be fully exempt from service tax.  Concessional duty will also be applicable for cold storages, food processing units, specified equipment for food preservation etc. The concessional import duty to specified machinery for use in the plantation sector is being further extended upto March 2011. Testing and certification of agricultural seed is being exempt from service tax.


Tax exemptions have been announced for equipment used in solar systems and wind energy system, LED lights, electric cars, cycle rickshaw, mobile phone components and certain medical equipment.


The rate of tax on services has been retained at 10 per cent.





The Budget Estimates 2010-11 provides for a total expenditure of Rs. 11,08,749 crore. Out of this, Rs 3,73,092 crore is plan expenditure and Rs.7,35,657 crore is non-plan expenditure. The plan expenditure has increased by 15 per cent while there is only 6 per cent in increase in non-plan expenditure.


The total receipt are estimate Rs.7,46,651 crore.


The Fiscal deficit is pegged at 5.5 per cent. In the Medium Term Fiscal Policy Statement being presented along with other Budget documents in the House today, the rolling targets for fiscal deficit are pegged at 4.8 per cent and 4.1 per cent for 2011-12 and 2012-13, respectively. These projections improve upon the recommendations of the Thirteenth Finance Commission.      



Best Wishes

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Nellore-524 003
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[Budget] Rajendra Zawar: Budget 2010-11 [1 Attachment]

[Attachment(s) from Ashwin Nagar included below]

Dear Sir,

"Have a Great Day"

Please find the attachment of Budget Highlights 2010-11

I look forward to your valuable feedback/suggestion. Important Direct Tax Proposals in detail will be communicated to you shortly.


Zawar Associates.
Chartered Accountants,
8/129 Mhada Complex,
Opp, Vishal Mega Mart,
St. Road. Aurangabad.
Ph No-2350305


Attachment(s) from Ashwin Nagar

1 of 1 File(s)

[Budget] Kedia & Kedia: Compilation on Budget 2010 [2 Attachments]

[Attachment(s) from Ashwin Nagar included below]

Dear sirs,

Please find attached herewith following documents

(1) Important Direct Tax Proposals – Finance Bill 2010

(2) Key Features – Budget 2010

Thanks & warm regards



205, Kaling, Nr Mt Carmel School ,

Ashram Road, Ahmedabad - 380009

Tel: 079-26589941, 26579971

Email: kediaca@vsnl.net; kediaca@vsnl.net


Attachment(s) from Ashwin Nagar

2 of 2 File(s)

[Budget] Pradeep G. Tulsian: Budget 2010 [1 Attachment]

[Attachment(s) from Ashwin Nagar included below]

Dear Sir,

Please find the Budget Analysis.

Thanks and regards

P. G Tulsian & Company
Tulsian Sanjay & Company
Chartered Accountants
A-611, Fairdeal House
Near Swastik Char Rasta
Navrangpura, Ahmedabad
Gujarat - 380009
Phone/Fax 079-40073889

Mobile No.:

Pradeep G Tulsian : 09327444524
Sanjay G Tulsian : 09374004700

e-mail: pgtulsian_ca@rediffmail.com


Attachment(s) from Ashwin Nagar

1 of 1 File(s)

[Budget] Rajesh Dudhara: Major highlights of the Union Budget 10-11 [2 Attachments]

[Attachment(s) from Ashwin Nagar included below]

Rajesh Dudhara


Attachment(s) from Ashwin Nagar

2 of 2 File(s)



[Budget] Chhajed and Doshi: Budget highlights for the year F.Y 2010-11 [2 Attachments]

[Attachment(s) from Ashwin Nagar included below]

Hello Sirs,
Encl. pl. find the attachment of Budget Highlights for the year 2010-11.
With regards
Chhajed and Doshi
Chartered Accountants


Attachment(s) from Ashwin Nagar

2 of 2 File(s)

[Budget] Pragnesh Dharia: Union Budget 2010 and analysis of important proposals, Economic Survey and Recent Amendments [2 Attachments]

[Attachment(s) from Ashwin Nagar included below]

Dear Sir,

The Finance Minister of India has presented Union Budget for the Fiscal year 2010-11 in the Parliament on 26th February, 2010.

Consecutively for last 18 years, our firm is preparing commentary on the Union Budget of India. In continuation of this tradition, we have pleasure in presenting soft copy of our compilation on various proposals with its analysis.

We hope this detailed analysis shall be helpful to you.

We welcome your valuable feedback and suggestions to help our constant endeavour for improvement.

Thanking you,

Best Regards.

Pragnesh Dharia

Mukesh M. Shah & Co.

Chartered Accountants

Main :+9179 - 2658 0549

+9179 - 2658 5814

Fax : +9179 - 2658 1236

Mobile : +91 - 98240 17141

Email : pragneshdharia@gmail.com

Address : 1st Floor, H. K. House,

Ashram Road,

Ahmedabad - 380 009.


Attachment(s) from Ashwin Nagar

2 of 2 File(s)



27 February 2010

Budget Analysis 2010

An Analysis on Budget 2010 - see attachment

Best Wishes

Chartered Accountant
Door No.24-2-1885,
I Floor, Flat No.5,
Siddivinayaka Residency, I Cross,
Central Avenue, MSR Nagar,
Magunta Layout,
Nellore-524 003
Andhra Pradesh
Mobile:+91 - 0 9390221100
          +91 - 0 9440278412
e-Mail: vmvsr@rediffmail.com

26 February 2010

Anand Wadadekar: Union Budget 2010-2011 Synopsis


Economic crisis: "We have withered the global slowdown well," says FM.

18.9% growth rate in manufacturing sector in 2009.

Fiscal deficit pegged at 5.5%

Hope to breach 10% mark in GDP in near future, says FM.

Growth to exceed 7.2% in this fiscal, says FM.

General Sales Tax and Direct Tax Code can be introduced in April 2011

Gradual phasing out of stimulus, says FM.

Govt to set up apex level Financial Stability and Development Council

RBI to release additional licenses to pvt sector banks and non-banking financial institutions

Repayment tenure for farmer loans extended by 6 months to June 30th 2011

Delhi-Mumbai industrial corridor taken up for development

Govt to raise Rs 25000 cr through Disinvestment

Technology advisory group to be set up under Nandan Nilekani. UID authority given Rs 1900 cr

Allocation to Defence over Rs 147,000 crore


Direct tax code will be implemented from April 1, 2011

I-T dept to notify simple two-page Saral 2 form for individuals for current year

Direct Tax proposals to give loss of Rs 26,000 cr; Indirect Tax to yield gain of Rs 45,000 cr

No change in Corporate Tax

Minimum Alternate Tax up from 15% to 18% on book profits

Reduced Surcharge of 10% on domestic companies to 7.5%

Professionals with Rs 15 lakh income need accounts audit

Personal Taxation:

Income up to Rs 1.60 lakh: NIL tax

Income between Rs 1.60-5 lakh: Tax at 10%

Income between 5-8 lakh: Tax at 20%

Income above Rs 8 lakh: Tax at 30%

Minimum Tax Exemption limit for Senior Citizens and Women remains unchanged; i.e. Rs. 2,40,000 and Rs. 1,90,000 respectively.

Additional Rs 20,000 deduction made available for investment in Infrastructure Bonds. This is above Rs. 1,00,000 80C exemption


Service Tax rates unchanged at 10%, to bring more services under service tax

Duties on smoking and non-smoking tobacco products up

Peak excise duty hiked from 8% to 10%

Peak customs duty remains unchanged at 10%

Rs 1 per litre excise on petrol, diesel

Full excise cut on electric cars

Partial rollback of excise duty on cement

Agricultural seeds exempt from Service Tax

News agencies exempt from Service Tax

Service tax to GDP ratio is 1%

Customs duty on gold, platinum imports raised to Rs 300 from Rs 200

Import duty on silver raised to Rs 1500 per kg

Budget Highlight: Paresh Parekh

Indirect Taxes:


1.      Accredited news agencies exempt from service tax

2.      Service sector tax retained at 10 percent to aid the introduction of GST; more services to be taxed

3.      Toys fully exempt from central excise duty

4.      Concessional customs duty of 5 percent for cable TV operators for importing equipment

5.      Concessional duty of 4 percent for solar power rickshaw developed by Council of Scientific and Industrial Research

6.      Clean energy cess of Rs.50 per tonne on coal produced in India

7.      More services come under tax net

8.      Service tax rates to be retained

9.      Silver, gold import duty raised

10.  Concession for medical equipments for hospitals retained

11.  Excise duty cut on CFL

12.  Customs duty on crude oil back to 5%

13.  Excise duty on tobacco products hiked

14.  Partial rollback of excise duty on cement and cement products

15.  Excise duty on petrol, Diesel up by Re 1

16.  Excise duty on SUVs, MUVs hiked

17.  Excise duty on oil products hiked

18.  Sops for real estate housing projects to be extended

19.  To enhance tax audit limit for small businesses to Rs 60 lakh

20.  To partially rollback central excise duty


Direct Taxes:


1.      Tax Audit Limits has been increased from 40 lakh to 60 lakh & for professionals 10 Lakh to 15 lakh

2.      Surcharge on domestic companies cut to 7.5%

3.      MAT increased from 15 % to 18 %

4.      Pranab announces new tax structure

5.      No tax on income up to Rs 1.6 lakh

6.      Rs 1.6 lakh - Rs 5 lakh slab taxed at 10%

7.      Rs 5 lakh to Rs 8 lakh slab taxed at 20%

8.      Tax on income above Rs 8 lakh at 30%

9.      Saral - II for individual taxpayers in two pages

10.  Advanced tax receipts expected at Rs 7.46 lakh cr

11.  Interest on late payment of Tax has been increased.

12.  Total expenditure is within target

CA. Paresh Parekh

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