Budget News 2009

Union Budget 2009 gets mixed reactions from aam aadmi

Unlike men, women are quite glad with this year’s union budget; not just because it brought down the prices of jewellery, footwear, LCD TVs, cooking gas and medicines, but also due to a raise of income tax exemption limit by Rs 10000. Some people claimed it to be a rural-centric budget while others complained that the auto sector, export, FDI and corporate sector were ignored. Lawyers were an unhappy lot as the budget imposed service tax on their services.

Source: The Times of India, July 7, 2009. “Women happy, lawyers resent service tax”

Employees to pay tax on extra income as FBT stands abolished

The abolition of Fringe Benefit Tax which accounts for about 0.5-1 % of the expenses incurred by companies would help firms in reducing administrative costs in the form of a reduced tax burden on travel and other expenses. Moreover, it would allow them to offer stock options as a tool for attracting and retaining employees. But there the latter might have to use their pockets for paying taxes on the same.

Source: The Economic Times, July 7, 2009. “Union Budget 2009-10: Cos shed FBT load, staff may have to bear brunt

Finance Minister focusing on skill development

FM Pranab Mukherjee has promised to create close to 12 million jobs this year in his announcement of the 2009-10 budget. For generate more employment, he feels it necessary to develop working skills in all individuals, thus laying stress on the National Skill Development Programme. In India, out of a labour force of around 400 million, only 2% have received any formal training for skill development.

Source:www.financialexpress.com, July 7, 2009. “Focus on skill development, employment”

Union Budget 2009 shows leniency on taxation issues

The removal of tax surcharge on income of over Rs 10 lakh annually would bring down the effective income tax rate by 3%. Without a reduction in the corporate tax rate, Fringe Benefit Taxes and Commodities Transaction Tax have been abolished. Taxable perquisites will include contributions over Rs 1 lakh by the employer in superannuation funds and other perquisites defined by the CBDT. The dent of Rs 15000 crore on the exchequer would get compensated by 15% minimum alternate tax of book profits.

Source: The Financial Express, July 7, 2009. “A please-all balancing act”

144% increase in NREGA fund allocation

The Union Budget has seen a sharp rise in the allocation for the government’s flagship rural job scheme NREGA, to total Rs 39000 crores. 115 districts have been identified under a pilot project for these convergence schemes, which have shown marked progress while providing a wage of Rs.100 a day to rural households. Over and above this, the government has reiterated its promise of 25 kg rice or wheat a month at Rs.3 per kg to families below the poverty line.

Source: The Economic Times, July 6, 2009. “Budget allocates Rs.39,000 crore for rural jobs scheme”

Rashtrapati Bhavan budget gets a 21% increase

FM Pranab Mukherjee has allocated Rs. 38 lakh for the salary and allowances of the President in the Union Budget of 2009-10. The amount allocated is Rs. 27.52 crore in comparison to last year’s 22.67 crore, registering a growth of 21%. This will include all establishment related expenses, household establishment expenses and expenses for purchase of vehicles.

Source:www.business-standard.com, July 6, 2009. “21% hike in Rashtrapati Bhavan Budget; Rs 38 lac for Prez salary”

NMSD to have 1500 ITIs, 5000 skill centres set up

According to figures released in this year’s budget, the government aims to set up 1500 Industrial Training Institutes and 5000 skill development centres in the next eight months which are a part of the National Mission for Skill Development. It would be under the public private partnership scheme where funding would be partly made by the Central government, the states and by private partnerships. Active interest is being shown by states like Bihar, Gujarat, Andhra Pradesh and Karnataka with some even contemplating to offer free land.

Source: www.blonnet.com, July 5, 2009. “1,500 ITIs, 5,000 skill centres likely to come up on PPP basis”