Chidambaram presents vote on account

Finance Minister P Chidambaram has presented interim budget in the Lok Sabha on Monday. In his last budget before the 2014 general election, the finance minister tried to present an overview performance of the UPA government for the last 10 years.

In the interim Union Budget for the year 2014-15, the finance minister has kept the tax rate unchanged and also denied reports of policy paralysis of his government.

“In keeping with the conventions I do not propose to make any announcements regarding changes to the tax laws,” Chidambaram said.

He has reduced the excise duty for small cars from 12% to 8% and for SUVs from 30% top 24% to give the auto industry a long demand breather. He also slashed excise duty capital goods and consumer durables to enhance manufacturing sector.

“The current economic situation demands some interventions that cannot wait for the regular Budget. In particular, the manufacturing sector needs an immediate boost,” he said.

According to finance minister the present year will end on a satisfactory note with the fiscal deficit at 4.6 per cent and the revenue deficit at 3.3 per cent.

The Plan expenditure for the next fiscal year remains unchanged at Rs 555,322 crore, while non-Plan expenditure is marginally higher than current financial year at Rs 12,07,892 crore.

“RBI must strike a balance between price stability and growth while formulating monetary policy,” he said.

Key outcome from 2014-15 interim budget:

• No changes in tax laws in interim budget
• Blood banks to be exempt from service tax
• Excise duty cut from 12 to 10% in capital goods sector to increase growth
• Excise duty on mobile handset to be 6% on CENVAT credit to boost domestic production
• Excise duty on small cars, motorcycles and commercial vehicles reduced from 12% to 8%
• Excise duty on SUVs reduced from 30 to 24%, in large and mid-segment cars from 27-24% to 24-20%
• Fiscal deficit for 2013-14 will be 4.6%
• Revenue deficit estimated at 3% for 2013-14
• Defence allocation up by 10 per cent to Rs 2.24 lakh crore
• Rs 500 crore estimated requirement for implementing one-rank-one-pay scheme for armed forces in 2014-15
• Rs 6000 crore to rural housing fund, Rs 2000 crore for urban housing fund
• Rs 3711 crore for minority affairs, Rs 6000 crore to housing and urban poverty alleviation
• Rs 6730 crore allocated to social justice ministry; panchayati raj ministry gets Rs 7000 crore
• CAD will be $45 billion in current fiscal year
• Foreign exchange reserves up by $15 billion
• GDP growth rate in Q3 and Q4 of current fiscal year will be at least 5.2%
• Plan expenditure will remain at Rs 5,55,322 crore for 2014-15
• Rs 2,46,397 crore allocated for food, fertilizer and fuel subsidy

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