Budgetonomics

BUDGETONOMICS

Key Highlights of Budget 2010-11 in a Simple, Uncomplicated Manner

Personal Income Tax Slabs Revised-Indian Middle Class Happy

Upto Rs. 1.6 lacs- No Tax

Rs 1.6-5 lacs-10%

5 lakh-8 lacs-20%

More than 8 lacs-30%

Minimum Alternate Tax: Raised From 15% to 18%-Not a Very Positive News for India Inc.

The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the Govt by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.

Central Exercise Duty: Raised From 8% to 10%

Central Excise duty is an indirect tax levied on goods manufactured, again corporate sector unhappy

Estimated Fiscal Deficit: may be reduced to 5.5% this financial year-Good News

Fiscal Deficit: When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings).

Excise Duty: Petrol and Diesel hiked by Rs 1/litre-May put a burden on the consumer’s pocket

Although, not much to worry as the revised tax slabs will result in more income in the hands of aam admi

Goods and Services Tax [GST] to be introduced from April 1, 2011

Major reforms in the field of indirect taxes, GST would be a comprehensive value added tax on goods and services

GST would not be in addition to existing taxes. GST will include central excise duty , service tax, and additional duties of customs at the Central level; and value-added tax, central sales tax, entertainment tax, luxury tax, octroi, lottery taxes, electricity duty, state surcharges related to supply of goods and services and purchase tax at the state level.

Increased Spending In Health and Education

Plan allocation for school education raised from Rs26,800 crore to Rs31,036 crore in 2010-11.

Plan allocation for health and family welfare increased to Rs22,300 crore from Rs19,534 crore.

Rural Sector Development

NREGA allocation: raised to 41,000 Crore

The National Rural Employment Guarantee Act or NREGA is an Indian job guarantee scheme, enacted by legislation on August 25, 2005. The scheme provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage of Rs.100 per day.

This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. Around one-third of the stipulated work force is women.

Bharat Nirman Allocation-Rs 48,000 Crore

Bharat Nirman Yojana is an action-oriented business plan for rural infrastructure. It is an important step in bridging the gap between rural and urban areas and improving the quality of lives of rural masses. It comprises of projects on irrigation, roads (Pradhan Mantri Gram Sadak Yojana), housing (Indira Awaaz Yojana), water supply, and electrification and telecommunication connectivity.

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