Interim budget 2014-15

Union finance minister , P.Chidhambaram presented the interim budget 2014-15 in the loksabha on 17 Feb 2014.

This was the 83^rd budget of the union govt and 9^th personal budget by Chidambaram as finance minister.

The highlights of the union budget 2014-15:

Growth:

·        GDP expansion in the 3^rd and 4^thquarters of 2013/14 estimated at 5.2%. Growth for the whole year expected at 4.9%.

Fiscal Deficit:

·        Fiscal deficit seen t 4.6% of GDP in 2013/14, below target of 4.8%.

·        Fiscal deficit projected at 4.1% of GDP in 2014/15.

·        Says need to bring down the deficit to 3% of GDP by 2016/17.

Current Account Deficit:

·        CAD or 2013/14 estimated at $45 billion from last fiscal year’s $88 billion.

·        Forex reserves to rise by $15 billion by end of 2013/14.

Borrowing/Debt Servicing

·        Gross marketing borrowing for 2014/15 seen at 5.97 trillion rupees, net market borrowing at 4.5 trillion rupees.

·        Govt plans to buy back/switch bonds of 500 billion rupees in 2014/15.

·        Ways and Means advances for 2014/15 estimated at 100 billion rupees

·        Debt repayment in 2014/15 seen at 1.397 trillion rupees.

·        Interest payments seen rising to 4.27 trillion rupees in 2014/15 from a revised estimate of 3.8 trillion rupees or the current fiscal year.

Privatisation:

·        Target from stake sale in state run firms for 2013/14 revised to 258.41 billion rupees.

·        Target for 2014/15 increased to 569.25 billion rupees.

Spending:

·        Plan expenditure for 2014/15 seen at 5.55 trillion rupees, the same level as previous fiscal year.

·        Non plan spending estimated at about 12.08 trillion rupees in 2014/15.

Subsidies:

·        Total spending on food fertilizers and fuel at 2.5 trillion rupees in 2014/15.

·        Food subsidy estimated at 1.15 trillion rupees , fertilizer subsidy at 679.71 billion rupees, petroleum subsidy seen at 634.27 billion rupees versus revised figure of 854.8 billion rupees for 2013/14.

Defence:

·        Spending raised to 2.24 trillion rupees in 2014/15, up to 10% year on year.

Exports:

·        Merchandise exports seen at $326 billion 2013/14, up 6.3%  on year.

·        Agriculture exports expected to touch at $45 billion in 2013/14, up from $41 billion in 2013/14.

Tax Proposals:

·        Income tax rates kept unchanged.

·        10 pc surcharge on super-rich having annual income above rs 1 crore to continue.

·        5 pc surcharge on corporates with turnover at 10 cr.

·        Factory gate tax to be reduced to 10% from 12% on some capital goods consumer durables.

·        Cut excise duty on small cars, two wheelers, commercial vehicles to 8%  from 12%.

·        Recommends excise duty reductions on large vehicles.

·        Restructure of factory gate tax for mobile handsets.

Bank Restructuring:

·        Govt to provide 112 billion rupees capital infusion in state run banks 2014/15.

·        Propose to set up public debt management office to start to work from 2014/15.