New Delhi (PTI): In tune with the poll promises made by the Congress and reflecting the pressures of the global financial crisis, Finance Minister Pranab Mukherjee on Monday presented the Budget for 2009-10 that contained a series of measures that could be termed popular.
The government today announced a slew of tax sops, including an additional Rs 10,000 personal income tax exemption and scrapping of 10 per cent surcharge, while announcing cheaper loans to farmers and incentives for export and infrastructure to attain nine per cent growth.
Beginning with incentives for individual tax payers that included an additional exemption of Rs 15,000 for senior citizens and Rs 10,000 for women and others, Mr. Mukherjee also abolished Fringe Benefit Tax that could ease pressure on employers in giving benefits to the workers, but there was no change in corporate tax as also the rates for customs, excise and service tax.
The stock market, however, tanked, with BSE benchmark plunging by over 700 points.
The government pleased its constituency 'aam admi' (common man) by keeping its poll promise with a proposal to enact a Food Security Act for providing 25 kg of rice or wheat a month to the poor at Rs 3 kg.
Attaching the highest priority for infrastructure, where government institutions and banks could finance Rs one lakh crore for projects in addition with private flow, Mukherjee said that the present conditions and uncertainty about global recovery would make it difficult for him to focus on fiscal deficit which would shoot to 6.8 per cent from 2.7 per cent last year.
He said additional revenue would be mobilised through disinvestment of government equity in public sector undertakings and other steps, but said that interest payment alone would be over Rs three lakh crore largely on account of the burden of stimulus packages announced last year that helped the economy grow by 6.7 per cent.
However, he said that government would have the ownership of banks and insurance companies even as disinvestment takes off while reitereating that state holding in these entities would be at least 51 per cent.
Mukherjee also announced a number of sector specific incentives, particularly for those that promote employment, and announced a hike in provision for flagship schemes like NREGA by 144 per cent to Rs 39,100 crore and said that government would also provide a minimum of Rs 100 a day under the job guarantee scheme.
India Inc largely welcomed the intiative for attaining nine per cent economic growth, but said that areas like Securities Transaction Tax and Minimum Alternate Tax, which Mukherjee proposed to hike from 10 per cent to 15 per cent, should have caught the government's favourable attention.
He proposed an overall expenditure of Rs 10,28,838 crore - this is the first time since independence that expenses have crossed Rs 10 lakh crore mark - but nearly seventy per cent of this would be accounted by non-plan expenses, large part of which was on account of additional expenses for implementation of Sixth Pay Commission, food and fertiliser subsidy, interest payment and defence outgo.
Source : The Hindu