Finance Minister, P. Chidambaram tables the Budget for 2014, a most awaited one right before the elections.
States should take measures to support the Central Government to lay focus upon sectors like Defence, Railways, Highways and Tele-Communication.
The important features of the budget are mentioned below:
No changes have been brought in Direct taxes, in the Interim budget.
Changes in Excise Duty
The important changes are mentioned below:
- The Excise duty on good in the Chapter 84 and 85 of Schedule to the Central Excise Tariff Act has been kept 10% which is 2% lower than the last time. The said rate would continue till 30th June 2014, later it can be reviewed upon.
- Automobile Sector is reported to fall in growth and therefore to boost upon the sector, reductions have been made in the excise duty, valid till 30.06.14 which can be reviewed thereafter. According to the change, the excise duty on small cars, motorcycle and scooters has been brought down to 8%, which is 4% less than before. Commercial vehicles SUVs would attract an Excise Duty of 24% which used to be 30% before. The cars belonging to Large and Mid-segment would see a reduction in Excise Duty from 27/24% then to 24/20% now. The rates on excise Duty on trailers and Chassis are likely to be reviewed during regular budget.
- On domestic production of mobile handsets a rate of 6% with CENVAT credit or 1% without CENVAT credit would be charged. This is done with the aim of encouraging domestic production of mobiles.
Changes in Service Tax
- A service tax was levied on loading, unloading, packing, storage and warehousing of rice, now this is exempted.
- Services provided by the Cord Blood Banks would not have to pay any service tax.
Changes in Custom Duty
- The custom duty structure on non-edible grade industrial oil and the fractions associated like fatty acids and fatty alcohols is kept at 7.5%.
- The exemption from CVD on similar imported machinery is lifted with an aim of supporting deistic production of road construction.
- A concession on custom duty on capital goods imported by the bank note Paper mill India Private Limited is provided, again with the motive of encouraging domestic production of security paper from which currency notes are printed.
Other important points made in the budget
Mr. Chidambaram informed about the slowing down of economic growth across the world and he also assured about India keeping her head above water even during turbulence in the economy.
He added that agriculture of the country is looking up, and the Fiscal Deficit of FY 2013-2014 would be contained at 4.6%. There is an estimation that Agriculture GDP would grow at 4.6%.
In spite of economic turbulence the savings rate has been 31% in 2012-2013. He informs that there is no major fall in the investment across all major sectors except for mining and manufacturing. Inflation has been a matter of concern but Government is working with RBI to contain the same. There is a sharp recovery in the exports.
The expectation is to see an investment rate at 34.8% and saving rate at 30.1%.
There should be an estimated food production of 263 million tonnes.
Measures have been taken to encourage capital flows.
Though Rupee has come under pressure, the shape of economy is better than what it used to be 2 years ago.
He informs of 7 new airports being constructed.
Gape fell from 7.9% to 4. % in 9 quarters.
67% of the population assured of food due to Food Security Act.
New rail tracks spreading by 3343 km is in the plan.
In another decade, the country would see no less than 10 crore jobs.
The growth for the full year should be a minimum of 5.2%
The Budget has been presented, and any statement quoting the situation of economic paralysis has been smashed. Government is assured of making it big and has made an effort to promote the sectors which have shown a negative growth. However, some of the decisions are likely to get reviewed in the regular budget, so it is actually a time to wait and watch.