Union Budget 2010- Some Highlights

Our honourable Finance Minister Dr.Pranab Mukherjee announced the union budget on 26^th February, 2010. The budget has been termed as disappointing, consolidating, relief oriented and good marketing budget by different people. But I would like to term it as a moderately positive budget. There are some pros and cons for everyone in the budget. Let’s take a look at the objectives behind this year’s budget-

1. To maintain a growth rate of around 8% per year.

2. To reduce the fiscal deficit of the country.

3. To have an inclusive development.

4. Encouraging disinvestment in PSU’s to the tune of Rs. 25000 crore.

5. To ensure good allocation of money in building of infrastructure.

6. To give relief to export sector as well as for agriculture.

7. To reduce the rising Inflation rate.

The budget aimed at achieving all these objectives but sadly, seldom does it happen that we achieve all that we wish. The key announcements that were made in this year’s budget were-

· Changes in the tax slab- A step towards Direct Tax Code

2010-11			2009-10
Income		Tax	Income	Tax
0-160000		Nil	0-160000	Nil
160000-500000		10%	160000-300000	10%
500000-800000		20%	300000-500000	20%
8,00,000 and Above	30%		5,00,000 and above	30%

· Increase in Minimum Alternate Tax from 15% to 18% of book profits.

· Current surcharge of 10 per cent on domestic companies reduced to 7.5 per cent.

· Rate reduction in Central Excise duties to be rolled back

· Standard rate on all non-petroleum products enhanced from 8 per cent to 10 per cent

· Helping growth in agriculture by helping in increasing agricultural production.

· Providing credit support to farmers.

· Providing around 1,73,000 crore for the development of Infrastructure.

· Rs 1,900 crore allocated to the Unique Identification Authority of India (UIDAI)

for 2010-11

The budget was basically aimed at benefitting the common man and as expected did not offer much to corporate India. Some rates like excise duty have been increased keeping in view the government’s plan to implement GST from next year. Similarly, the slabs for tax have been expanded keeping in mind the Direct Tax Code expected to be implemented from next year.

All in all, the budget focused on consolidation and I am hopeful that Indian economy will grow at a good pace this year too and the announcements made in the budget will only help achieve our dream of 9% growth each year.

Contributed By-

Arun Singhal

Coordinator

Cashonova, Finance Club

Indian Institute Of Foreign Trade