Thursday 28 February 2013

Current Affairs-Indian Government's Union Budget 2013-14: Budget Summary


Budget Summary

The Union Budget for 2013-14 aims at ‘higher growth leading to inclusive and sustainable development.’ With this as mool mantra, the Finance Minister Shri P Chidambaram has sought to increase allocation to key areas and provide incentives for investments and savings while containing the fiscal deficit to 4.8% of GDP.

Presenting the Union Budget in Parliament today, the Finance Minister expressed the hope that the India would achieve high economic growth despite slowdown in the global economic growth.

The Minister said that his government has been able to contain the fiscal deficit at 5.2% in 2012-13 by following the path of fiscal consolidation.  But the current account deficit (CAD) is a greater worry, the Minister added. He, therefore, proposes to encourage foreign investment that is consistent with India’s economic objectives.

The Finance Minister said that the other areas of concern addressed by his Government are inflation and government expenditure. “Our efforts in the past few months have brought down headline WPI inflation to about 7.0 percent and core inflation to about 4.2 percent. It is food inflation that is worrying, and we shall take all possible steps to augment the supply side to meet the growing demand for food items,” he said. The Minister further said that he had no choice but to rationalize government expenditure in view of huge fiscal deficit in 2012-13. “We also took some policy decisions that had been deferred for too long, corrected some prices, and undertook a review of certain tax policies.”

THREE PROMISES: TO WOMEN, YOUTH AND THE POOR

Shri Chidambaram made promises to the women, the youth and the poor -  the three faces that represent the majority of the people of India. Stating that the government pledges to do everything possible to empower the women and to keep them safe and secure, he said that a number of initiatives were underway and many more would be taken by the Government as well as non-government organizations. He announced the setting up of a fund - Nirbhaya Fund - with the Government contributing Rs. 1000 crore.
      
The Minister also announced a Rs. 1,000 crore scheme for training youth to boost their employability and productivity. The National Skill Development Corporation will be asked to set the curriculum and standards for training different skills.  Trained youth who pass a test at the end of training will get a monetary reward of Rs.10000 on an average. This initiative is likely to motivate 10 lakh youth.

For the benefit of the poor, the Minister assured that Direct Benefit Transfer (DBT) schemes will be rolled out throughout the country during the term of the UPA Government. “We are redoubling out efforts to ensure that the digitized beneficiary lists are available; that a bank account is opened for each beneficiary; and that the bank account is seeded with Aadhaar in due course,” he said.

RURAL DEVELOPMENT, AGRICULTURE AND FOOD SECURITY

The allocation for Rural Development Ministry has been raised by 46 percent to Rs 80,194 crore in 2013-14.

Pradham Mantri Gram Sadak Yojana (PMGSY)-II has been carved out to benefit States that have substantially fulfilled the objectives of PMGSY. This will benefit states such as Andhra Pradesh, Haryana, Karnataka, Maharashtra, Punjab and Rajasthan.

Ministry of Agriculture gets a rise of 22 per cent over the revised estimates (RE) for 2012-13, at Rs 27,049 crore. Rs 500 crore is being allocated to start a programme on crop diversification. It will encourage farmers in the original green revolution states to choose alternative crops. A pilot programme on Nutri-Farms will be started for introducing new crop varieties that are rich in micro nutrients, such as iron-rich bajra. A sum of up to Rs 200 crore is to be provided to start the pilots.

The Budget seeks to support Farmer Producer Organizations (FPO), including Farmer Producer Companies (FPC) which have emerged as aggregators of farm produce and link farmers directly to markets.

The target of agricultural credit for 2012-13 (Rs. 5,75,000 crore) is likely to be exceeded, and a target of Rs 7,00,000 crore farm credit has been fixed for the next year.

The interest subvention scheme for short-term crop loans is proposed to be continued for loans by public sector banks, RRBs and Cooperative banks, and expanded to private scheduled commercial banks. Under the scheme, a farmer who repays the loan on time is able to get credit at 4 cent per year.

Rs.307 crore have been provided for setting up of the National Livestock Mission. This will attract investment and enhance livestock productivity. A sub-mission of this Mission seeks to increase the availability of feed and fodder.

Expressing the hope that the National Food Security Bill will be passed by Parliament as early as possible, the Finance Minister has set apart Rs. 10,000 crore towards the incremental cost that is likely under the Act.

OTHER MAJOR ALLOCATIONS

Education has been allocated Rs. 65,867 crore, an increase of 17 per cent over the RE for 2012-13.

ICDS gets Rs. 17,700 crore representing an increase of 11.7 per cent. A multi-sectoral programme to tackle maternal and child malnutrition that was announced last year will be implemented in 100 districts during 2013-14. It will be further scaled up to cover 200  districts the year after.

Ministry of Health and Family Welfare has been allocated Rs. 37,330 crore.  Of this, the new National Health Mission that combines the rural mission and the proposed urban mission will get Rs. 21,239 crore - an increase of 24.3 percent over the RE.

The Backward Regions Grant Fund (BRGF) has been allocated Rs. 11,500 crore and will include a State component for Bihar, the Bundelkhand region, West Bengal, the KBK districts of Odisha and the 82 districts under the Integrated Action Plan.

Science and Technology related Departments have been allocated funds with substantial enhancements.

A National Institute of Sports Coaching is proposed to be set up at Patiala at a cost of Rs. 250 crore over a period of three years.

 Drinking water and sanitation will receive Rs. 15,260 crore. Rs. 1,400 crore is being provided for setting up water purification plants to cover arsenic and fluoride effected rural habitations.

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will receive Rs. 14,873 crore as against RE of Rs. 7,383 crore in the current year. Out of this, a significant portion will be used to support the purchase of upto 10,000 buses, especially by hill States.

Defence gets an allocation of Rs. 2,03,672 crore and the assurance that constraints will not come in the way of providing any additional requirement for the security of the nation.

Stating that adequate funds must be provided for programmes that benefit  women, children and minorities, as also the scheduled castes and scheduled tribes, the Finance Minister  proposed to allocate Rs 41,561 crore to the scheduled caste sub-plan and Rs 24,598 crore to the tribal sub-plan. The programmes relating to women get Rs. 97,134 crore and child budget, Rs. 77,236 crore. The Ministry of Women and Child and Development has been asked to design a scheme that will address women’s concerns, and an additional sum of Rs. 2,000 crore has been provided to the Ministry to began work in this regard. Ministry of Minority affairs has been allocated Rs. 3,511 crore and the Department of Disability Affairs, Rs. 110 crore.

INVESTMENT AND INFRASTRUCTURE

The Finance Minister stated that the key to restart the growth engine was to attract more investment, and that the government will improve communication of its policies to remove any apprehension or distrust in the minds of investors.

 A number of steps to mobilize investment have been announced in the Budget keeping in view that as per 12th Plan the private sector will share 47 percent of Rs 55,00,000 crore investment in infrastructure. Infrastructure Debt Funds (IDF) will be encouraged. India Infrastructure Finance Corporation (IIFCL) will offer credit enhancement to infrastructure companies that wish to access the bond market to tap long term funds. Some institutions will be allowed to issue tax - free bonds up a total sum of Rs 50,000 crore (as against Rs 25,000 crore in 2012-13). Assistance of the World Bank and Asian Development Bank will be sought to build roads in the North Eastern States and connect them to Myanmar. The corpus of Rural Infrastructure Development Funds (RIDF) is proposed to be raised to Rs. 20,000 crore. A sum of Rs 5,000 crore will be made available to NABARD to finance construction of warehouses, godowns, silos and cold storage units designed to store agricultural produce.

Shri Chidambaram informed that the newly set-up Cabinet Committee on Investment has held two meetings and taken decisions in respect of a number of oil and gas, power and coal projects. CCI will take up some more projects shortly, he said. The Minister also informed that a regulatory authority is being constituted for the road sector. Bottlenecks stalling road projects have been addressed and 3,000 km  of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the first six months of 2013-14.

The Budget introduces an investment allowance for new high value investment. A company investing Rs. 100 crore or more in plant and machinery during the period 1.4.2013 to 31.3.2015 will be entitled to deduct an investment allowance of 15 percent of the investment (in addition to depreciation).

INDUSTRIAL SECTOR

Plans for seven new cities have been finalized for industrial corridors and work on two new smart industrial cities at Dholera (Gujarat) and Shendra Bidkin (Maharashtra) will start during 2013-14. A comprehensive plan is being prepared for the Chennai Bengaluru industrial corridor. Preparatory work has started for the next corridor - Bengaluru Mumbai industrial corridor.

Two new ports will be established in Sagar (West Bengal) and in Andhra Pradesh. In addition, a new outer harbour will be developed in the VOC port at Thoothukkudi (Tamil Nadu) through PPP at an estimated cost of Rs 7,500 crore.

A power transmission system will be constructed from Srinagar to Leh and for this Rs. 226 crore have been provided in 2013-14.

The oil and gas exploration policy will be reviewed to move from profit sharing to revenue sharing contracts. A policy to encourage exploration and production of shale gas will be announced. The natural gas pricing policy will be reviewed and uncertainties regarding pricing will be removed.

To provide greater support to Micro, Small and Medium Enterprises (MSMEs), the refinancing capability of SIDBI is proposed to be enhanced from Rs. 5,000 crore to Rs. 10,000 crore per year. SIDBI will also be provided a corpus of Rs 500 crore to set up a Credit Guarantee Fund for factoring.

Apparel Parks are proposed to be set up within the Integrated Textile Parks, to house apparel manufacturing units. A new scheme, Integrated Processing Developing Scheme, is being started to address to environmental concerns of the textile industry. Working capital and term loans to the handloom sector will be available at a concessional interest of 6 per cent. This will benefit 1.5 lakh weavers and 1,800 primary co-operative societies.

SAVINGS

The Budget proposes three measures to promote household savings. One, the income limit for Rajiv Gandhi Equity Saving Scheme for first time investors is being raised from Rs. 10 lakh to Rs. 12 lakh. Two, persons taking loan for first home up to Rs 25 lakh will be entitled to an additional deduction of interest of up to Rs 1 lakh. Three, instruments such as Inflation Indexed Bonds will be introduced to protect savings from inflation.

FINANCIAL SECTOR

Shri Chidambaram proposed to constitute a Standing Council of Experts in the Ministry of Finance to analyse the international competitiveness of the Indian financial sector.

The Finance Minister announced that Rs. 14,000 crore worth of capital infusion will be made into public sector banks. It will be ensured that these banks meet the Basel III regulations.

India’s first women’s bank is proposed to be set up with Rs. 1,000 crore as initial capital.

The government has finalized a number of proposals relating to the insurance sector in consultation with IRDA. These include empowering insurance companies to open branches in Tier II cities and below without prior approval of IRDA, having an office of LIC and a public general-insurance company in all towns with the population of 10,000, and  permitting banks to act as insurance broker.

The Rashtriya Swasthiya Bima Yojana, which cover 34 million families below the poverty line, will now be extended to other categories such as rickshaw, auto-rickshaw and taxi-drivers, sanitation workers, rag pickers and mine workers.

The Finance Minister proposes to evolve a comprehensive social security package by converging various schemes for life-cum-disability cover, health cover, maternity assistance and pension benefits.

A number of proposals relating to capital market have been finalized in consultation with SEBI. These include simplification of procedure and uniforms norms for foreign portfolio investors, clarity relating to FDI investment, allowing FIIs to participate in new areas, etc. 

BUDGET ESTIMATES

The total expenditure in the Union Budget 2013-14 is pegged at Rs. 16,65,297 crore. Out of it Rs.5,55,322 crore (33%) is Plan expenditure.  The non-Plan expenditure is estimated at Rs 11,09,975 crore.

The Plan expenditure in 2013-14 will be 29.4 per cent more than the revised estimates of the current year. All flagship programmes have been fully and adequately funded.

Juxtaposing economic welfare with the economic policy, the Minister said that the link between policy and welfare can be expressed in a few words: opportunities, education, skills, jobs and incomes. The Budget has before it one overarching goal - to create opportunities for the youth to acquire education and skills that will get them decent jobs or self-employment that will bring them adequate incomes that will enable them to live with their families in a safe and secure environment. The Budget sets a target of skilling 90 lakh people in 2013-14, for which funds will be released by the National Rural Livelihood Mission and National Urban Livelihood Mission.

TAXES

The General Budget reiterates that clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution and independent judiciary for greater assurance is underlying theme of tax proposals. It is proposed to set up the Tax Administration Reforms Commission.

As regards Direct Taxes, a relief of Rs. 2000 for the Tax Payers in the first bracket of Rs. 2 lakhs to Rs. 5 lakhs have been proposed. A surcharge of 10 percent on persons (other than companies) whose taxable income exceeds Rs.1 crore have been levied. Surcharge has been increased from 5 to 10 percent on domestic companies whose taxable income exceed Rs. 10 crore. In case of foreign companies, surcharge will increase from 2 to 5 percent, if the taxable income exceeds Rs. 10 crore. Additional surcharges to be in force for only one year. Mr. Chidambaram said, education cess to continue at 3 percent.

The Finance Minister announced the grant of investment allowance at the rate of 15 percent to manufacturing companies that invest more than Rs. 100 crore in plant and machinery during the period 1.4.2013 to 31.3.2015. Concessional rate of tax of 15 per cent on dividend received by the Indian companies from its foreign subsidiary proposed to continue for one more year. It is proposed that TDS at the rate of one percent on the value of the transfer of immovable property where the consideration exceeds Rs. 50 lakhs to be levied. Agricultural land to be exempted from TDS. Modified provisions of GAAR will come into effect from 1.4.2016. It is also proposed to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10 percent to 25 percent. The Budget also proposes to introduce Commodities Transaction Tax (CTT) in a limited way. However, agricultural commodities will be exempted. A number of administrative measures such as extension of refund banker system to refund more than Rs. 50,000, technology based processing, extension of e-payment through more banks and expansion of in the scope of annual information returns by Income-tax Department.

With regards to Indirect Taxes, the Finance Minister proposed no change in the normal rates of 12 percent for excise duty and service tax. Similarly, no change has been made in the peak rate of custom duty of 10 percent for non-agricultural products. Custom duty on free gold limit increased to Rs. 50,000 in case of male passenger and Rs. 1,00,000 in case of a female passenger subject to conditions. Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased. Custom duty on Set Top Boxes increased from 5 to 10 percent while on raw silk increased from 5 to 15 percent to boost domestic production. Custom duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5 percent. The Budget also proposes that period of concession available for specified part of electric and hybrid vehicles extended upto 31 March 2015.

Excise duty on SUVs increased from 27 to 30 percent. However, this will not apply to SUVs registered as taxies. Cigarettes will cost more as specific excise duty increased by about 18 percent. Similar increases are proposed on cigars, cheroots and cigarillos. Duty on mobile phones priced above Rs. 2000 has been raised to 6 percent from the current one percent.

The Budget proposes ‘Voluntary Compliance Encouragement Scheme’ where a defaulter may avail of the scheme on condition that he files a truthful declaration of Service Tax dues since 1.10.2007. It is a one-time scheme in which interest, penalty and other consequences will be waived.

The Budget proposes to mobilize Rs. 18,000 crore in which new proposals in indirect taxes will yield Rs. 4,700 crore and direct taxes of Rs. 13,300 crore.

In a major step to rationalize taxation on goods and services, the Budget has earmarked Rs. 9,000 crore towards the first installment of the balance of CST compensation. The Minister said that overwhelming majority States have agreed that there is a need for Constitutional amendment to pass GST law. It will be drafted by the State Finance Ministers and the GST Council, the Minister added.

Current Affairs-Indian Government's Union Budget 2013-14: ‘Higher Growth Leading to inclusive and Sustainable Development is the Mool Mantra’ says the Finance Minister


‘Higher Growth Leading to inclusive and Sustainable Development is the Mool Mantra’ says the Finance Minister

In the current year, the CSO has estimated growth at 5 per cent while the RBI has estimated growth at 5.5 per cent. It will be below India’s potential growth rate of 8 per cent. Getting back to that growth rate is the challenge that faces the country. This was stated by the Union Finance Minister Shri P. Chidambaram while presenting the General Budget 2013-14 in Lok Sabha today. By setting the context at the very outset of his Budget speech, Shri Chidambaram said that global economic growth slowed from 3.9 per cent in 2011 to 3.2 per cent in 2012. India is part of the global economy and country’s exports and imports amount to 43 percent of GDP and two way external sector transactions have risen to 108 per cent of GDP. Stating that India cannot remain unaffected by what happens in the rest of the world, he said India’s economy too has slowed after 2010-11. 

He, however, pointed out that ‘even now, of the large countries of the world, only China and Indonesia are growing faster than India in 2012-13’. The Finance Minister said the average growth rate for the 11th Plan period was 8 per cent, the highest ever in any Plan period. 

Shri Chidambaram said although there are examples of States growing at a fast rate, but leaving behind women, the Scheduled Castes, the Scheduled Tribes, the Minorities and some Backward Classes. The UPA does not accept that model. The Government believes in inclusive development, with emphasis on improving human development indicators, he added.  

Current Affairs-Indian Government's Union Budget 2013-14: “What we will become Depends on US” – P Chidambaram


“What we will become Depends on US” – P Chidambaram

The Union Finance Minister Shri P Chidambaram quoted the Tamil Saint poet Tiruvalluvar and Swami Vivekananda to drive home the point that India can become among the top five countries in the world, if we take right decisions and right choices. At the conclusion of his Budget speech in Lok Sabha today, Shri Chidambaram said India is the tenth largest economy in the world. He said, “we can become the eighth, or perhaps the seventh, largest by 2017. By 2025, we could become a $ 5 trillion economy”. 

Quoting Swami Vivekananda he said, “All the strength and succor you want is within yourself. Therefore, make your own future.” The General Budget 2013-14 is a resolute step towards that future, he added. 

Current Affairs-Indian Government's Union Budget 2013-14: 15 Percent Investment Allowance Provided on Investment of More than 100 Crores in Plant and Machinery


15 Percent Investment Allowance Provided on Investment of More than 100 Crores in Plant and Machinery
Concessional Rate of Tax of 15 Percent on Dividend Received from its Foreign Subsidiary by a Company Continued for One More Year

The Finance Bill 2013-14 proposes an investment allowance at the rate of 15 per cent to a manufacturing company that invests more than Rs.100 crore in plant and machinery during the period 1.4.2013-31.3.2015. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said that no large economy can become truly developed without a robust manufacturing sector. He also propsed to extend the ‘Eligible Date’ for projects in the power sector to avail of the benefit under Section 80-IA of the Income Tax Act from 31.3.2013 to 31.3.2014. 

Mr. Chidambaram also announced that the concessional rate of tax of 15 per cent on dividend received by an Indian company from its foreign subsidiary shall be continued for one more year. This will encourage repatriation of funds from overseas companies . Further, the Indian company shall not be liable to pay dividend distribution tax on the distribution to its shareholders of that portion of the income received from its foreign subsidiary.  

Current Affairs-Indian Government's Union Budget 2013-14: 46%Hike in Budgetary Allocation for Flagship Schemes of Rural Development


46%Hike in Budgetary Allocation for Flagship Schemes of Rural Development 
Rs 1,400 Crore Allocated for Water Purification Plants in Arsenic and Fluoride Affected Rural Habitations

The Budgetary Allocation for the Ministry of Rural Development, which implements a number of flagship programmes witnessed a quantum jump. The Finance Minister Shri P. Chidambaram announced in his Budget Speech that the Ministry will get Rs 80,194 crore in 2013-14 as against Rs 55,000 crore allocated in 2012-13, thus marking an increase of 46 percent. While Mahatma Gandhi National Rural Employment Guarantee Scheme, MGNREGS will get Rs 33,000 crore, Pradhan Mantri Gram Sadak Yojana, PMGSY is given Rs 21,700 crore and Indira Awaas Yojana, IAY has been allocated Rs 15,184 crore. 

Shri Chidambaram said that the objectives of PMGSY have been substantially fulfilled in several States and these States wish to do more and hence it is proposed to carve out PMGSY-II and allocate a portion of funds to the new programme. It will benefit States like Andhra Pradesh, Haryana, Karnataka, Maharashtra, Punjab and Rajasthan. Details of the PMGSY-II will be announced by the Minister of Rural Development in due course. 

Similarly, Ministry of Drinking Water and Sanitation will get Rs 15,260 crore as against Revised Estimate of Rs 13,000 crore in the current year. The Finance Minister also proposed to provide Rs 1,400 crore towards setting-up water purification plants as there are still 2,000 arsenic and 12,000 fluoride affected rural habitations in the country.  

Current Affairs-Indian Government's Union Budget 2013-14: Additional Deduction of Interest upto Rs.1 Lakh on Home Loan for First Home Buyer


Additional Deduction of Interest upto Rs.1 Lakh on Home Loan for First Home Buyer

The Finance Bill 2013-14 proposes additional tax benefit to the first – home buyer who takes a loan for an amount not exceeding Rs.25 lakh. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram proposed that a person taking a loan for his first home from a bank or a housing finance corporation upto Rs.25 lakh during the period 1.4.2013 to 31.3.2014 will be entitled to an additional deduction of interest of Rs.1 lakh. 

The Finance Minister hoped that this will promote home-ownership and give a filip to a number of industries like steel, cement, brick, wood, glass etc besides jobs to thousands of construction workers. 

This deduction will be over and above the deduction of Rs.1.50 lakh allowed for self-occupied properties under Section 24 of the Income Tax Act. If the limit is not exhausted, the balance may be claimed in AY 2015-16.  

Current Affairs-Indian Government's Union Budget 2013-14: Agricultural Credit Target Kept at Rs. 7 Lakh Crores


Agricultural Credit Target Kept at Rs. 7 Lakh Crores

In the budget for 2013-14 presented by the Finance Minister Sh. P. Chidambaram in Lok Sabha today, the agricultural credit target has been increased to Rs. 7 lakh crores from the earlier Rs. 5.75 lakh crores. The short-term crop loan scheme (Interest Subvention Scheme) has been extended to the crop loans borrowed from private sector scheduled commercial banks in respect of loans given in the service area of the branch concerned. Earlier the scheme was applicable to loans extended by the Public Sector Banks, Regional Rural Banks (RRBs) and Co-operative Banks. 

Under this Interest Subvention Scheme, a farmer will be able to get loans at 4 per cent per annum if he repays the short-term crop loan on time. 

Current Affairs-Indian Government's Union Budget 2013-14:Banks to be infused with Rs 14,000 Crore Capital to meet basel III


Banks to be infused with Rs 14,000 Crore Capital to meet basel III Norms-Financial inclusion on Bank Agenda

The Finance Minister Shri P.Chidambaram has taken steps in the budget to ensure adequate capitalization of the public sector banks. The Public sector banks will be provided with an infusion of Rs 14,000 crore additional capital in 2013-14 budget estimates to enable them to meet the BASELIII norms.He said Rs 12,517 crore infusion of capital into the 13 Public Sector Banks shall be done by March 2013.

In order to achieve financial inclusion in addition to all Scheduled Commercial banks and RRBS, all the Cooperative Banks and other Banks will now shift to Core Banking Solution(CBS) by 31 March 2013. All Branches of Public Sector Banks in the country will have ATMs by the deadline of 31st March, 2014. In order to address gender related issues and empower women India’s first public sector Women’s Bank will be set up with Rs.1000 crore as the initial capital. This Women’s Bank will lend funds to women, women run businesses, women SHGs and will employ predominantly women and be functional from October 2013 . 

Terming the financial sector as the heart of the economy the Finance Minister announced constitution of a standing Council of Experts in the Finance Ministry to analyze the international competitiveness of the Indian Financial sector. Alerting thatthe Financial Sector Legislative Reforms Commission will present its report next month Chidambaram said it is the Governments intention to act quickly and decisively on the recommendations so that our financial system stands on sound legal foundations.  

Current Affairs-Indian Government's Union Budget 2013-14: Direct Benefit Transfer Scheme to be Rolled out throughout the Country: Government Ensures “Aapka Paisa Aapke Haath” to the Poor


Direct Benefit Transfer Scheme to be Rolled out throughout the Country: Government Ensures “Aapka Paisa Aapke Haath” to the Poor

February 28, 2013 Government is determined to plug in the leakages in the implementation of developmental programmes meant for the poor and the deprived of the country. To achieve this, the Government, which made a modest and cautious beginning on the 1st January, 2013, has announced rolling out of the Direct Benefit Transfer Scheme throughout the country.

Making a promise to the poor to ensure handing over the money meant for them in their own hands, the Finance Minister Sh. P. Chidambaram said that nearly 11 Lakhs beneficiaries have received the benefits directly into their bank accounts. Giving example of the happiness of dalit and tribal students and pregnant women upon getting scholarships and maternity benefits, the Minister said that Government is redoubling its efforts to ensure that the digitized beneficiaries lists are available; that bank account is opened for each beneficiary; and that the bank account is seeded with Aadhaar in due course.  

Current Affairs-Indian Government's Union Budget 2013-14: Final withholding Tax Levied at the Rate of 20 Per Cent


Final withholding Tax Levied at the Rate of 20 Per Cent

The Finance Bill 2013-14 proposes levy of Final Withholding Tax at the rate of 20 per cent on profits distributed by unlisted companies to shareholders through buy-back of shares. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said some tax avoidance arrangements have come to notice and the above proposal is aimed at plugging the loopholes. 

The Finance Minister also proposed to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10 per cent to 25 per cent. However, the applicable rate will be the rate of tax stipulated in the Double Tax Avoidance Agreement (DTAA). Shri Chidambaram noted that the rate of tax on royalty in the Income Tax Act is lower than the rates provided in a number of double tax avoidance agreements. The above proposal is aimed at correcting this anomaly.  

Current Affairs-Indian Government's Union Budget 2013-14: Finance Minister Proposes Special Focus on Green Revolution in 2013-14; Outlay Increased to Boost Agriculture Production


Finance Minister Proposes Special Focus on Green Revolution in 2013-14; Outlay Increased to Boost Agriculture Production

An allocation of Rs. 1000 crore has been proposed in the budget 2013-14 to continue support to the new green revolution in Eastern States like Assam, Bihar, Chhattisgarh and West Bengal to increase the rice production. An outlay of Rs. 500 crore is proposed for starting a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives in the original green revolution States as these States are facing the problem of stagnating yields and over-exploitation of water resources. 

Under the Rashtriya Krishi Vikas Yojana, an outlay of Rs. 9954 crore and Rs. 2250 crore have been proposed for mobilizing higher investment in agriculture and the National Food Security Mission respectively. 

General budget 2013-14 presented by Finance Miinster Sh. P. Chidambaram in Lok Sabha today, has focused on augmentation of Green Revolution by proposing various measures like continuing support to Green Revolution in Eastern India, Crop Diversification in original green revolution States, bridging yield gaps between investment in agriculture and National Food Security Mission, Integrated Watershed Programme, pilot programme on Nutri-Farms, establishing National Institute of Biotic Stress Management and a pilot scheme to replant and rejuvenate coconut gardens. 

To provide relief to small and marginal farmers especially in drought prone and ecologically-stressed regions, the allocation for the Integrated Watershed Programme has been increased to Rs. 5387 crore from Rs. 3050 crore. 

For addressing the issues of plant protection, the National Institute of Biotic Stress Management will be established at Raipur, Chhattisgarh. The Indian Institute of Agricultural Bio-technology will be established at Ranchi, Jharkhand as a center of excellence in agricultural bio-technology. 

An additional sum of Rs. 75 crore has been provided for a pilot scheme to replant and rejuvenate coconut gardens in the State of Kerala and the Andaman & Nicobar Islands. 

Current Affairs-Indian Government's Union Budget 2013-14: Fiscal Deficit for the Year 2013-14 Estimated at 4.8 Per Cent, to be Brought Down to 3 Per Cent by 2016-17


Fiscal Deficit for the Year 2013-14 Estimated at 4.8 Per Cent, to be Brought Down to 3 Per Cent by 2016-17

The fiscal deficit for the current year has been contained at 5.2 per cent and the fiscal deficit for the year 2013-14 is estimated at 4.8 per cent. 

Presenting the Budget 2013-14 in Parliament today, the Finance Minister Sh. P. Chidambaram said that the revenue deficit for the current year will be 3.9 per cent and the revenue deficit for the year 2013-14 is estimated at 3.3. per cent. Announcing that the red lines drawn by him with regard to budgetary estimates has not been crossed, the Minister redeemed his promise to bring down the fiscal deficit to 3 per cent, the revenue deficit to 1.5 per cent and the effective revenue deficit to zero by 2016-17. The Minister announced that the estimate of Plan Expenditure is placed at Rs. 5,55,323 crore which as a proportion of total expenditure will be 33.3 per cent. The Minister said that the non-plan expenditure is estimated at Rs. 11,09,975 crore.  

Current Affairs-Indian Government's Union Budget 2013-14: Foreign Investment to be Encouraged to Tide over Current Account Deficit


Foreign Investment to be Encouraged to Tide over Current Account Deficit
The Current Account Deficit (CAD) of India continues to be high mainly because of “our excessive dependence on oil imports, the high volume of coal imports, our passion for gold, and the slow down in exports. This year, and perhaps next year too, we have to find over USD 75 billion to finance the CAD”. This was stated by the Union Finance Minister Shri P. Chidambaram, while presenting the General Budget 2013-14 in Lok Sabha today. Stating that there are only three ways to tide over the problem FDI, FII or External Commercial Borrowings (ECB), Shri Chidambaram said this is why he had been emphasizing that at the present juncture, India does not have the choice between welcoming and spurning foreign investment. “We have to encourage foreign investment that is consistent with our economic objectives”, he added.  

Current Affairs-Indian Government's Union Budget 2013-14:


Government Announces Fund for Products Based on Science and Technology Innovations

Government plans to pay more attention to science and technology for common man. Ministry of Science and Technology, Ministry of Finance and the Principal Scientific Advisor to the Government have identified a few amazing S&T innovations and the Government has decided to fund organizations that will scale up and make these products available to the people. Presenting the Budget 2013-14 in Lok Sabha today, the Finance Minister Sh. P. Chidambaram proposed to set apart Rs. 2,000 crore and asked the National Innovation Council to formulate a scheme for the management and application of the fund. 

The Minister said that despite constraints, an enhanced allocation of Rs. 6,275 crores to the Ministry of Science and Technology, Rs. 5,615 crore to the Department of Space and Rs. 5,880 crore to the Department of Atomic Energy has been made. 

Current Affairs-Indian Government's Union Budget 2013-14: Government Committed to Fight Inflation, says Finance Minister


Government Committed to Fight Inflation, says Finance Minister

The Union Finance Minister Shri P Chidambaram has said that looming large over our efforts to stimulate growth is inflation. Presenting the General Budget 2013-14 in Lok Sabha today, Shri Chidambaram said that some inflation is imported. Supply demand mismatch, for example in oilseeds and pulses, also pushes up inflation, he said. Aggregate demand is another cause of inflation. The battle against inflation must be fought on all fronts, he asserted. Shri Chidambaram said, in the past few months Government’s efforts have brought down headline WPI inflation to about 7.0 per cent and core inflation to about 4.2 per cent. 
He further stated that food inflation is worrying and the Government shall take all possible steps to augment the supply side to meet the growing demand for food items.   

Current Affairs-Indian Government's Union Budget 2013-14: Government Plans to Evolve New Criteria for Determining Backwardness


Government Plans to Evolve New Criteria for Determining Backwardness

Government feels that human development indicators should be taken into consideration to determine backwardness. Presenting the Budget 2013-14 in the Lok Sabha today, the Finance Minister Sh. P. Chidambaram proposed to evolve new criteria such as per capita income and other HDIs and reflect them in future planning and devolution of funds. Terming the Backward Regions Grant Fund as a vital source of gap funding, the Finance Minister proposed to allocate Rs. 11,500 crores in 2013-14 as well as another sum of Rs. 1,000/- crores for Left Wing Extremism (LWE) affected districts. The Minister announced that the Fund will include a State Component for Bihar, the Bundelkhand region, West Bengal, the Kalahandi, Bolangir and Korapet (KBK) districts of Odisha and the 82 districts under the Integrated Action Plan.  

Current Affairs-Indian Government's Union Budget 2013-14: Government Pledges to Empower Women and Keep them Safe and Secure: Nirbhaya Fund of Rs. 1,000 Crores Announced


Government Pledges to Empower Women and Keep them Safe and Secure: Nirbhaya Fund of Rs. 1,000 Crores Announced

Government has taken a number of initiatives and steps supporting such initiatives being taken by non-government organizations to ensure the dignity and safety of women. In the backdrop of incidences of violence against women which challenges liberal and progressive credentials of our country, the Finance Minister Sh. P. Chidambaram pledged to do everything possible to empower women and to keep them safe and secure. 

Presenting the Budget 2013-14 in the Lok Sabha today, the Finance Minister proposed to set-up Nirbhaya Fund. Citing the multifarious role a woman plays as a child, a young student, sportswoman, homemaker, working woman and the mother who needs their support, the Minister announced that the Government will contribute Rs. 1,000/- crores in this Fund. Shri Chidambaram said that Ministry of Women and Child Development and other ministries concerned will work out the details of the structure, scope and the application of the Fund. 

Current Affairs-Indian Government's Union Budget 2013-14: Government takes Measures to Rationalise Expenditure


Government takes Measures to Rationalise Expenditure

The Union Finance Minister Shri P Chidambaram called the policy decisions of the Central Government to correct some prices and review of certain tax policies as “a dose of bitter medicine”. Presenting the General Budget 2013-14 in Lok Sabha today, Shri Chidambaram said, faced with a huge fiscal deficit, the Government had no choice but to rationalize expenditure. He said that the Government took some policy decisions that had been deferred for too long and undertook a review of certain tax policies. 

The Finance Minister stated that in the Budget for 2012-13, the estimate of Plan Expenditure was too ambitious and the estimate of non-Plan Expenditure was too conservative. He said that the Government retrieved some economic space and used that economic space to advance Government’s socio economic objectives.  

Current Affairs-Indian Government's Union Budget 2013-14: Government to Pull Out all Stops to Achieve the Objective of Skilling 50 Million People


Government to Pull Out all Stops to Achieve the Objective of Skilling 50 Million People; Youth to be Targeted and Motivated

Government will release funds through National Rural Livelihood Mission and the National Urban Livelihood Mission to achieve the ambitious target of skilling 50 million people in the Twelfth Plan period including 9 million in 2013-14. 

Presenting the Budget 2013-14 in the Lok Sabha today, the Finance Minister Sh. P. Chidambaram said that National Skill Development Corporation has done good work but it has to go a long way. The Minister said that 5 per cent of the Border Area Development Programme Fund, 10 per cent of the Special Central Assistance to the Scheduled Castes sub-plan and the Tribal sub-plan and some other funds will also be used for skill development. 

Giving special emphasis on youth, the Minister said that large number of youth must be motivated to voluntarily join skill development programmes. The Minister proposed National Skill Development Corporation to set the curriculum and standards for training in different skills. The Minister announced that upon passing the test after training, the candidate will be given a certificate as well as a monetary reward of an average of Rs. 10,000/- per candidate. Hoping that skill-trained youth will give enormous boost to employability and productivity, the Minister proposed to set apart Rs. 1,000/- crore for this ambitious scheme. 

Current Affairs-Indian Government's Union Budget 2013-14:Highlights of the Budget


Highlights of the Budget
The Union Budget for 2013-14 aims at higher growth rate leading to inclusive and sustainable development as ‘mool mantra’.

 Finance Minister makes three promises: to women, youth and the poor.
 Nirbhaya Fund to empower women and to keep them safe and secure.
Proposal to set up India’s first Women’s Bank as a public sector bank.
 Rs. 1,000 crore for skill development of ten lakh youth to enhance their employability and productivity.
 Direct Benefit Transfer (DBT) Scheme to be rolled out throughout the country during the term of UPA Government.
 Fiscal Deficit for 2013-14 is pegged at 4.8 percent of GDP. The Revenue Deficit will be 3.3 percent for the same period.
 Plan Expenditure placed at Rs. 5,55,322 crore. It is 33.3 percent of the total expenditure while Non Plan Expenditure is estimated at Rs. 11,09,975 crore. The plan expenditure in 2013-14 will be 29.4 percent more than the RE of the current year i.e. 2012-13.
Substantial rise in allocation to the social sector.  Allocation for Rural Development Ministry raised by 46 percent to Rs. 80,194 crore.
The target for farm credit for 2013-14 has been set at Rs. 7,00,000 crore against Rs. 5,75,000 crore during the current year.
Rs. 10,000 crore earmarked for National Food Security towards the incremental cost.
Education gets Rs. 65,867 crore, an increase of 17 percent over RE for 2012-13.
ICDS gets Rs. 17,700 crore. This is 11.7 percent more than the current year.
Drinking water and sanitation will receive Rs. 15,260 crore. Rs. 1,400 crore is being provided for setting up water purification plants to cover arsenic and fluoride affected rural areas.
 Health and Family Welfare Ministry has been allotted Rs. 37,330 crore. National Health Mission will get Rs. 21,239 crore which represents 24.3 percent over the RE.
The Jawaharlal Nehru National Urban Renewal Mission  (JNNURM) will receive Rs. 14,873 crore as against RE of Rs. 7,383 crore in the current year.
Defence has been allocated Rs. 2,03,672 crore.  
 Rs. 3,511 crore have been earmarked to Minority Affairs Ministry, 60 percent higher than RE for 2012-13.
The Government will encourage Infrastructure Debt Fund (IDF) and allow some institutions to raise tax free bonds upto Rs. 50,000 crore which is 100 percent more than the current year. 
India Infrastructure Finance Corporation (IIFC), in partnership with ADB will help infrastructure companies to access bond market to tap long term funds.
Income limit under Rajiv Gandhi Equity Savings Scheme (RGESS) will be raised from Rs. 10 lakh to Rs. 12 lakh.
 First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 lakh.
Proposal to launch Inflation Indexed Bonds or Inflation Indexed National Security Certificates to protect savings from inflation.
On oil and gas exploration policy, the Budget proposes to move from the present profit sharing mechanism to revenue sharing. Natural gas pricing policy will be reviewed.
On coal, the Budget proposes adoption of a policy of pooled pricing.
Benefits or preferences enjoyed by MSME to continue upto three years after they grow out of this category.
Refinancing capacity of SIDBI raised to Rs. 10,000 crore.
Technology Upgradation Fund Scheme (TUFS) for textile to continue in 12th Plan with an investment target of Rs. 1,51,000 crore.
Rs. 14,000 crore will be provided to public sector banks for capital infusion in 2013-14. 
A grant of Rs. 100 crore each has been made to 4 institutions of excellence including Aligarh Muslim University, Banaras Hindu University, Tata Institute of Social Sciences, Guwahati and Indian National Trust for Art and Cultural Heritage (INTACH).
New taxes to yield Rs. 18,000 crore.
 A surcharge of 10 percent on persons (other than companies) whose taxable income exceeds Rs.1 crore have been levied.
 Tobacco products, SUVs and Mobile Phones to cost more.
 Relief of Rs. 2000 for the tax payers in the first bracket of 2 to 5 lakhs.
 ‘Voluntary Compliance Encouragement Scheme’ launched for recovering service tax dues.
 Rs. 9,000 crore earmarked as the first installment of balance of CST compensations to different States/UTs.