India must make tough spending choices, finance minister P Chidambaram said on Thursday, even as he unveiled a bigger-than-expected outlay for the coming fiscal year in one of the most highly anticipated Indian budgets of recent years.
The budget has been described at best as balanced and pragmatic and, at worst, as disappointing and lacking substance.
The Sensex had jumped nearly 170 points ahead of the Budget, but started falling towards the end of Mr Chidambaram’s Budget speech, as measures to attract foreign flows were seen as limited.
The stock markets slumped to a three-month low as traders gave a thumbs down to the Budget. The BSE Sensex overlooked positive global cues to end 291 points, or 1.52 per cent, lower at 18,662, while the broader Nifty fell 104 points to 5,693.
Following are highlights of the Budget:
No revision of personal income tax slabs; relief in first bracket through tax credit of Rs.2,000 for earnings up to Rs.5 lakh.
10% surcharge on income exceeding Rs. 1 crore a year; only 42,800 people have declared such income.
Excise duty on cigarettes to be increased 18%.
Service tax on all air conditioned restaurants regardless of whether or not they serve alcohol.
11 lakh people have benefited from direct cash transfers; scheme to be rolled out across the country during UPA-2 term (May 2014).
Rs.1,000 crore allocated for establishing Nirbhaya Fund.
Rs.9,000 crore allocated for compensating state for differential in central sales tax and GST.
Import duty on high-end vehicles raised from 75 percent to 100 percent.
Concessions for encouraging MRO (maintenance repair overhaul) sector.
Modified law to prevent tax avoidance to come into effect April 1, 2016.
100 percent tax deduction for contributions to National Children’s Fund.
Property transactions skewered; TDS of one percent where transaction exceeds Rs.50 lakh.
Tax on mutual fund redemptions reduced from .25 percent to .001 percent.
Defence allocated Rs.2 lakh 3,672 crore.
Rs.800 crore provided to promoting wind energy.
Tax-free infrastructure bonds of Rs.50,000 crore to be issued.