Finance Minister Mr.P.Chidambaram speaks, we cover it LIVE!
Mr.Chidambaram heads towards the parliament and his presentation of the Indian Fiscal Budget 1996-97
The Finance Minister, Mr.P.Chidambaram, has started presenting his
Fiscal Budget 1996-97 in parliament, at 1700 hours IST.
The F.M. began his presentation with a reference to the Economic Survey Update which was tabled on Friday last, calling it "good weekend reading".17:14 22/07/96
United fronts first budget will stick close to Common minimum program of the 13 constituents according to Chidambaram the budget has 7 basic thrusts:
Steadfast commitment to reforms
To access concerns
Enhancement of foriegn investment specially in infrastucture
Development of key human resorces
Achieve viability in balance of payments.
Increased subsidies to farmers, more funds for farmers' lending institutions.17:32 22-07-96
Setting up of Infrastructure Finance Development Corporation, Government contribution Rupees 500 crore (Rupees 5 billion), Reserve Bank contribution Rupees 500 crore. IFDC will fund infrastructure projects (roads, power, telecom) and also stand guarantee on projects.17:33 22-07-96
Foreign institutional Investors can now invest in 10 percent in companies from the present 5 percent. They can also invest in unlisted companies.
Companies Act amendments
Expansion of list of industries for automatic approval by foreign investors from the present 35.
Disinvestment of government companies to raise up to Rs 5000 crores
Major project for development of Andman & Nicobar Islands
Loud cheering on proposal to continue member of parliament local area development scheme (MPLADS).
New insurance schemes for public sector banks.
Cochin and Tuticorin ports may be developed more.
Increase on subsidies for some kinds of fertilisers.
Healthy buoyancy in tax and non-tax revenue collections the past year
Good news-no new direct taxes except one :
personal income tax limit-current Rs 40000 not raised
Reduction of income tax rate from 20 to 15 percent for the slab between Rs 40000 to Rs 60000
Increase in standard deduction from Rs 15000 to Rs 18000
CORPORATE TAX RATES
Reducing rate of surcharge on corporate tax from 15 percent to 7.5 percent
Minimum alternate tax for companies effectively working out to around 12 percent of book profits
Decrease in long term capital gains tax to Indian companies
Reduction in customs duties on several items including Plastics.
Reduction of duties in raw materials for electronic goods, computers, selected machinery for textile sector.
Reduction of duty on crude oil.
Reduction of duty on chemicals, both organic and inorganic.
Reduction on petrochemicals, non-coking coal used in power plants.
Reduction in duties on electronic components, peripherals, television, computers.
Telecommunication parts and subassemblies duties down from 35 to 30% and on finished parts from 50 to 40%.
Cellular phones-customs duties down to 30 percent
Edible oils-reduce import duty from 30 percent to 20 percent.
Value Added Tax (VAT)-move towards a four rate tax structure from the present 11 rate.
Textile duty on yarn from 50 to 40 percent.
Motor vehicles-duty on cars unchanged at 40 percent for small persons.
No change in duty on two wheelers and tractors.
Cigarettes-modest increases in specific duties on cigarettes.
Excise procedures are outdated need to be modified.
Mandatory penalties for customs and excise duties evasion.
middle-class items to cost more
Government to earn more revenue from corporate sector
fiscal deficit is estimated at 5 percent of the budget in 1996-97 as compared to 5.5 percent last financial year.18:37 22-07-96
large allocations to social sector, agriculture, tax reliefs to middle classes, infrastructure, as per commitment in the common minimum programe of the United Front.18:37 22-07-96
Our economy is on the high growth curve-we need more reforms, resources, discipline and compassion, not
This budget attempts to blend courage and compassion, growth and social justice.18:37 22-07-96