Budget News 2010

Audit compliance limit exceeded for small businesses

Union Budget 2010-11 has come up as a relief for the small business as all businesses with a turnover of Rs. 60 lakh will have to conduct account audits against an earlier limit of Rs. 40 lakh. Similarly, in the case of professionals, the limit for account auditing has been increased to receipts of Rs. 15 lakh against Rs. 10 lakh earlier. The finance minister said in his speech that he had introduced these limits in his Budget of 1984 and it is high time to decrease the tax burden on small businesses.

Source: www.business-standard.com, February 27, 2010. “Big smile for small businesses”

Women groups find budget provisions burdensome on ‘aam aadmi’

That the Union budget does not favour ordinary people and has worsened their condition by increasing the excise duty on petroleum and petroleum products was conveyed by the All India Democratic Women’s Association (AIDWA). The budget did not cover the concern of majority of people and had kept in mind interests of corporate sector. National Federation of Indian Women (NFIW) said that allocation of fund to the NRHM and health sector is not enough for the country where problem of malnutrition and maternal and infant mortality rates is high.

Source: www.hindu.com, February 27, 2010. “Women groups unhappy with budget provisions”

Healthcare reforms leave out salaried class

With health care expenses going high day by day and no increase in the exemption limit for medical insurance premium of Rs. 15000, common people have been left disappointed by the Union Budget. The budget has proposed deduction for contribution to the Central Government Health Scheme but which is applicable only to a few people who contribute to it. However, the government has increase the allocation to healthcare sector by 14 percent as a sign of favorable intentions.

Source: www.dnaindia.com, February 27, 2010. “Salaried class feels left out of Pranab Mukherjee healthcare reforms”

High priority on social sector to enhance rural growth

The Union Budget 2010-11 has increased the allocation of resources to social sector programmes such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Bharat Nirman and Indira Awas Yojana to increase rural growth. MGNREGA’s fund has been raised to Rs. 40100 crore from Rs. 39100 crore. Indira Awas Yojana’s allocation has been hiked to Rs. 10000 crore to meet the need of housing facilities to people below poverty line. These efforts are expected to lay the foundation for solid growth in the rural economy.

Source: www.financialexpress.com, February 27, 2010. “Higher allocation for social sector to spur rural growth”

Increase in MAT the only dark spot for India Inc.

Finance minister Pranab Mukherjee increased the excise duty to 10% and minimum alternate tax (MAT) on book profits was increased from 15% to 18%. Companies are happy that the excise duty was not increased to a higher level. A study done by Business Standard Research Bureau reveals that, for FY 2010-11, manufacturing companies will shell out an additional Rs 25,500 crore, but companies feel that this increase in excise duty will be passed on to consumers without affecting the demand.

Source: www.business-standard.com, February 27, 2010. “India Inc sees roses all the way”

Income tax rate change a motivational incentive for tax payers

The finance minister has brought a smile on personal income tax payer’s face by increasing the exemption limit across the board. This is likely to compensate the hike in excise duty and prices of petroleum products. In the next fiscal year, the government is planning to widen the income tax slabs as recommended in the draft Direct Taxes Code, these slabs were last changed in 2008-09.  Individual can now invest more due to new infrastructure bonds with section 80C deduction. Education cess of 3% will continue for at least one more year.

Source: economictimes.indiatimes.com, February 27, 2010. “I-T's a special stimulus: Everyone's getting richer”

Growth rate on track, need to work on job creation

The Economic Survey has made it clear that the growth rate of economy is back on track and has come out of slowdown with flying colours. But to keep the growth rate increasing, the most important challenge is employment generation for which, inclusive growth and industrial development is a precursor. The survey mentions that the medium, small and micro enterprises (MSME) sector is the largest employer in the country and needs more support for growth and development. Technological development and development of infrastructure also constitute important challenges that need to be overcome for economic growth.

Source: economictimes.indiatimes.com, February 26, 2010. “Employment creation must be top priority”

Senior citizens to have same benefits this year

The Union Budget 2010-11 has been good news for middle class senior citizens as the finance minister has continued to allow deduction of upto Rs. 20000 against their taxable income on premium paid. Retired persons or senior citizens with income Rs. 1.6 lakh to 5 lakh will save Rs. 20600 a year compared to the current year slab. Those earning Rs. 5 lakh to Rs. 8 lakh will save Rs. 41000 and for Rs. 8 lakh and above will save Rs. 51500.

Source: www.dnaindia.com, February 26, 2010. “Budget has same benefits for senior citizens”

India Inc. happy with Railway budget

The Railway budget announced by Minister Mamata Banerjee on Wednesday has found support among industry bodies, with most of them finding it satisfactory. The Bangalore Chamber of Commerce and Industry (BCIC) said that some proposals in the budget like the involvement of public-private partnership (PPP) will lead to modernization and growth of Railways. The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) also appreciated the proposal for the development of connectivity to Mangalore port, helping in the expansion of trade and industry.

Source: www.business-standard.com, February 25, 2010. “Railway budget satisfactory, say industry bodies”

Railway Budget brings a bundle of benefits for its staff

The Railway budget has given a reason to celebrate for its 14 lakh employees by announcing a new scheme of “House for All”. Under this, residences will be provided to all employees in the next ten years. Also, with the help of Ministry of Health and Ministry of Human Resource Development, Railway ministry has decided to use surplus railway land to build hospitals and education centres. For women employees, around 50 crèches will be setup for their children while 20 hostels are proposed to be built as well..

Source: economictimes.indiatimes.com, February 24, 2010. “Railway employees have reason to rejoice”

No big gains for Textile sector from Budget 2010-11

Textile industry this year had lots of demands and expectations from the ongoing Union budget. For example, to remove mandatory excise duty, exemption of liquid fuel used for manufacturing from custom and excise duty and allocation of provision of Rs. 4500 crore to the textile industry under technology upgradation fund scheme (TUFS). But most of the industrial players are suspecting that this budget will not turn up with the fulfillment of all their demands, as the budget will be focusing more on social sector.

Source: economictimes.indiatimes.com,February 24, 2010. “Textile cos see no big gains from Budget”

Union Budget allocation a negligible share for women

Union Budget allocation for Women and Child Development (WCD) ministry has increased from Rs. 2454 crore in 2004-05 to Rs. 7218 crore in 2009-10. However, the proportion of the Budget has a decline from 9.2 % to 3.2 % in the same year. As per the budgetary allocation analysis out of the total budget for WCD, 97.2 % share is used for child development schemes and only 2.4 % is allocated for the women-related programmes.

Source: timesofindia.indiatimes.com, February 24, 2010. “Women first? Not top priority for UPA”

Women group demanding Government to expand its limit of gender budgeting

Women groups are coming up with the demand that the gender budgeting should go beyond the programms and schemes run by Ministry of Women And Child Development. As per the Centre for Budget and Governance Accountability (CBGA), in the Union Budget 2009-10 many of the useful programms remained outside the purview of gender budgeting, which should be included this year. Women group have also demanded to include proper regulations of banks which will allow them to create adequate credit for women.

Source: economictimes.indiatimes.com, February 22, 2010. “Don’t limit gender budgeting to a ministry or two: Women group”

Telecom industry pins hopes on favorable govt policies

The Indian telecom industry, growing at a scorching pace in the last couple of years, is expecting favourable govt policies in the upcoming union budget. For further growth and advancement of this sector, the industry is hoping for some relaxation in the high tax structure from Union Finance Minister in the upcoming budget of 2010-11. Telecom firms are also demanding the availability of cheap credit, schemes to boost export and support to facilitate business and day to day transactions.

Source: www.hindu.com, February 16, 2010. “Telecom sector hoping for incentives”