UNION BUDGET

Padmini Sahoo Farah Naaz Sebasmita Binayak

WHAT IS UNION BUDGET?

- The budget is the annual announcement of the governments fiscal policy changes. It announce the tax

changes proposed for the following tax year and also how the government plan to spend the revenue.

-It is an instrument for fulfilling the obligations of the states - It is a political statement of the priorities set by the government.

- It shows the financial transaction of the year.

Economic Survey

The economic survey of India is published by central statical

organization.
The Economic Survey of India showcases the annual- economic

development of the country.

It is scheduled to be presented on 2nd July, when the Budget

Session of Parliament begins.

Union Budget sets goals and targets for the next one year, the

Economic Survey focuses on the growth achieved the previous year and the factors that contributed to it.

BUDGET AT A GLANCE
Total estimated expenditure is Rs.10,20,838crore, 36%

more than previous. Total estimated income is Rs. 6,14,497crore.

Sustain rate of growth 9%p.a over an extended time. Non tax revenue receipts estimated at Rs.1,40,279crore

in 2009-10 compare to Rs.95,785crore in 2008-09.

It talks about the state of the economy while concentrating on selected economic indicators such as:State of the Economy Challenges and policy response. Fiscal Developments and Public Finance. Price and Monetary management. Industrial Production. Agriculture & Food management. Energy, Infrastructure and Communication. Poverty and Human development. Financial Intermediate and Markets.

STATE OF ECONOMY
GDP to grow to 7.5 per cent in 2009-10. The overall growth of GDP at factor cost at constant

prices in 2008-09, as per revised estimates released by the Central Statistical Organisation (CSO) (May 29, 2009) was 6.7 per cent. Despite the slowdown in growth, investment remained relatively buoyant, growing at a rate higher than that of GDP The overall rate of growth of capital information at constant price was 15.6 in 07-08 is compare to 13.9 in 0607. The index of industrial production for the year 2008-09 points towards a sharp slowdown with growth being placed at 2.4 per cent.

During the last two years the Indian economy faced three major challengesIncrease the capital inflow which reached to maximum in the last quarter of 2007-08. An inflationary explosion in global commodity prices. Global financial meltdown and collapse of international trade.

FISCAL DEVELOPMENT AND PUBLIC FINANCE

Fiscal consolidation began in the early 1990. with fiscal deficit declining from 6.6% for GDP in 199091 to 4.1% of GDP in 1996-97 and it reached to 6.2% of GDP in 2001-02.

TAX
Surcharge of 10% on personal income tax

removed. Custom duty reduced from 10% to5% on 10 specific life saving drugs. Excise duty on branded articles of jewellery to be reduced from 2% to nil. Excise duty on special boiling point spirit to be reduced to 14%.

CONSUMER
LCD TVs, branded Jewellery, Luxury cars

cheaper. Set-top boxes, cotton apparel and branded fuel turn dearer. Cancer, AIDS and heart aliment drugs cheaper.

INDUSTRY
The growth of industrial sector started to slowdown in the first half

of 2007-08. Overall growth during the year remained as high as 8.5%. The year 2008-09 thus closed with the industrial growth at only 2.4% as per the index of industrial production(IIP).

INFRASTRUCTURE AND INDUSTRY

Inadequate infrastructure is

responsible for pushing back Indias GDP by about 2%. IIFCL will refinance 60% of bank loan in critical sectors. Allocation of national highway authority of India for the national highway development programme increased by 23%.

AGRICULTURE
Target for agriculture credit are

Rs.3,25,000 crore for year 2009-10. For farmers loans upto 3 lakh at 7% p.a. Agriculture sector has grown by 2.4%. Record rice production at 98.04 million tonnes. 14 national agricultural projects approved. Central assistance for storm water drainage project increase to Rs.500 crore from 200 crore.

AGRICULTURE AND FOOD MANAGEMENT

The performance of the agricultural

sector influence the growth of Indian economy. Agricultural sector contributed 12.2% of national exports in 2007-08. Agricultural accounted for 17.8% of the GDP in 2007-08 as compared to 21.7% in 2003-04.

OIL AND GAS

Bio-diesel custom duty lowered. To develop and set up national gas grid.

Domestic oil prices should be in sync with global crude.

RURAL DEVELOPMENT
In National Rural Health Mission(NRHM) to increase of Rs.2,057 crore. Pradhan Mantri Adarsh Gram Yojna has been initiated for

integrated development of 1000 villages allocation Rs.100 crore. Allocation under Rajiv Gandhi Gram Vidyutikaran yojna is up by 27% to Rs.7000 crore.

HEALTH
All BPL families to be covered under Rashtriya

Swasthya Bima Yojana(RSBY). Allocation under RSBY increased by 40% over previous allocation to Rs.350 crore in 2009-10.
Allocation under National Rural Health Mission increase by Rs.2057 crore.

EDUCATION
Overall plan expenditure for

education sector in budget 2009-10 is 3.25 lakh crore. This is 34% up from the previous year. 2,113 crore to set upto more IITs and IIMs. Interest subsidy on loans for higher education. Rs. 827 crore allocated for opening one central university in each uncovered state. Spending on higher education raised to Rs.2010 crore.

CONCLUSION
The FDI scenario has been left largely unchanged while reforms

in the education and insurance sector have not been mentioned extensively.
On the positive side this budget has been very good to the rural

sector and this is the single biggest impact of this budget. The National Rural Employment Guarantee Scheme has been allotted more funds to make it a bigger success. There have been extra funds allotted towards rural housing as well.

CONCLUSION
Global economics have played a large part in this budget. It has been the single biggest determinant of revenue economics for this fiscal.

The FM has pretty much decided that reforms cannot be pushed until and unless the global economic crisis is over. Important areas like banking and insurance have been ignored.
But this budget has emerged as part of the

present governments long term roadmap for the economy.