Monday, July 6, 2009

Budget for 2009-10

The Union budget for 2009-10 was presented to the Parliament by Finance Minister Pranab Mukherjee. Personally, I'm happy with the followings:
  1. Fringe Benefit Tax (FBT) to be scrapped
  2. Surcharge on Income Tax, currently @10%, to be abolished
  3. Income tax exemption limit to be increased by Rs 10k from 1.5L to 1.6L. Here is the new I-T slab.
  4. IT returns to be made simpler.
I had been expecting some benefits for home loan also, by way of increasing the current Rs 1.5L exemption in interest component of home loan. It didn't come though.

One bad news that came from the budget is that fiscal deficit will increase from 2.5% of GDP to about 6.8% of GDP. It's due to the Govt's stimulus to kickstart the economy which has slowed down from about 9% to 7%.

Another key point that I saw in the budget is the priority of government in rural development and poverty alleviation. They call it inclusive growth. Three things worth mentioning:
  1. NREGA: allocation increased by 144% to Rs 39,000 crore. Govt is committed to providing Rs 100 a day for rural household.
  2. Allocation for Bharat Nirman to be raised by 45%. There are six schemes under this. Fund for the Pradhan Mantri Gram Sadak Yojana (PMGSY), one of the 6 schemes, has been increased by 59% to Rs 12,000 crores. Indira Awaas Yojna, another scheme, hiked by 63% to Rs 8883 crores.
The complete budget speech is available here: http://business.rediff.com/special/2009/jul/06/budget09-finance-ministers-budget-speech.htm

The various schemes for rural development are conceptually good. But I doubt how much benefit actually goes to the poor and needy. I don't know about other states; but in my native state Assam, I know for sure that there is rampant corruption in DRDA (District Rural Development Agency), the nodal agency for implementing these schemes. Already the ongoing session of the Assam Legislative Assemby has been discussing anomalies in NREGA in Assam. (I read about that in the Assam Tribune last week.)

A few other highlights of the budget are:
  1. Funding to NHAI hiked by 23%
  2. Rs 2113 crores for new IITs and IIMs.

1 comment:

Jyotirmoy Saikia (জ্যোতিৰ্ময় শইকীয়া) said...

This evening after watching an interview of Pranab Mukherjeet in NDTV 24x7, I came to know that FBT on ESOP was not abolished. Here's the complex rule for calculating FBT on ESOP: http://www.hindu.com/2007/10/24/stories/2007102454701900.htm