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