Populist Budget Launched XXX Vote Zingles!
Most Vidarbha farmers will not get loan waiver
Congress has strengthened its hand against the opposition and Left allies with a farmer-friendly Budget, raising a chance of early elections and reviving hope for a controversial nuclear deal.
Palash Biswas
Contact: Palash C Biswas, C/O Mrs Arati Roy, Gosto Kanan, Sodepur, Kolkata- 700110, India. Phone: 91-033-25659551
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West Bengal Left front Goverment executed Maraichjhanpi Massacre to protect Environment violating International and inland water laws. Just see:
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American Budget session of indian Parliament presents a Virtual Reality show presented by Ruling Hegemony. It is all the way an obscene Ramp show. Lalu yadav exposed lot of skin. Now Chidamram stripped outright. Where from will they get the revenue to implement all these hyped schemes and ultimately who would be responsible? What has been the destiny of Right to work? Food for work schemes? Food security and SEZ drive? Starving India has to partyicipate in an Election game to sustain Power for the Ruling Hegemony. This happens to be the agenda of this asmeriacan agenda. The strategy is to tag India as an American colony, economically, politically, stratigically, culturally and socilly. Indigenous People have to be wiped out. Hence, Indo US Nuclear Deal is on the centre stage once again as no Anti Imperialist or Anti capitalist movement exists in Sensex India due to all round betrayal by Indian communists. They could not withdraw support to hold power in Tripura, West bengal and Kerala and to repress indigenous insurrections in Nandigram and Singur! They have been indulged in dramatic sequences of false Land movement countrywide and anti US demonstration to manage favourable Vote Bank with siegeable Muslim Vote Bank. The fact is, right or left, all political parties with their hypocrite ideologies do ally with BUSH WAR CIVIL WAR Regiment to destroy Indigenous people world wide and capture all the Natural Resources to feed corporates and MNCs! It is the Brahmincal character of the Post Modern Manusmriti Apartheid Galaxy order. They suuport Hillary Clinton and are afraid of Barack Obama emerging History Maker in USA as all Indian leaders do hate Blacks, Untouchables and Muslims. All these games of Power Play is sponsored by Hindu Zionist Corporate Imperialism.
Most Vidarbha farmers will not get loan waiver! Though,apparently the fast-tracking of the implementation of the debt waiver and relief scheme by June this year led to political parties, including those on the side of the government, and the industry predicting that elections are not far away!
Populist Budget Launched XXX Vote Zingles! Short of announcing the date for elections, everything else has been announced, said leader of the CPI Parliamentary Party in Lok Sabha Gurudas Dasgupta, whose party supports the government.Dubbing the Budget as "election manifesto", BJP Vice President Mukhtar Abbas Naqvi said, "It is a clear signal that elections are being held early. The nature of the Budget is virtual declaration of mid-term elections." Sharing this view, noted industrialist and Rajya Sabha member Rahul Bajaj said the Budget has clear indicators for early elections.In the central hall of Parliament, Congress MPs were discussing the possibility of early polls and joking with colleagues of other parties to get ready for the battle. However, CPI MP D Raja does not feel it points to early elections, though he concedes that the Budget does have a short-term perspective on several issues.
Chidambaram announced major – and arguably populist - changes in the income tax slab. He said the threshold of exemption for all Income Tax assesses will be raised from Rs 1,10,000 to Rs 1,50,000, eliciting applause from the Parliamentarians. Personal income tax exemption slab for women will be at Rs 1.8 lakh.
Chidambaram announced a 20 per cent hike in education budget—from Rs 28,674 crore to Rs 34,400 crore—and the setting up of more IITs and IIMs. Three new IITs will be set up in Andhra Pradesh, Bihar and Rajasthan.
Chidambaram also proposed setting up of national knowledge centres and allotted Rs 100 crore to the Information Technology sector.
“We must encourage our students to take up studies in science” and announced various scholarships for students pursuing the subject," he said
He also announced Rs 13,100 crore for Sarva Shiksha Abhiyan, Rs 8,000 crore for mid-day meal scheme and Rs 4,554 crore for secondary education scheme. With a clear emphasis on rural education, FM announced 410 additional Kasturba Gandhi Vidyalaya will be set up in backward blocks.
Finance Minister P Chidambaram, the hero of the day, dismissed all talk of elections saying in India elections take place every year and the budgets can be described as election budgets.
"If you have nothing else to say about the Budget, then you can call it election-Budget," he said in a tone tinged with sarcasm at the customary post-Budget briefing.
Finance Minister P Chidambaram on Friday presented a Budget which waived off loans worth Rs 60,000 crore to small farmers, hoped for an 8.8 percent growth and announced several social sector schemes.
Chidambaram, presenting the fifth and last full budget of the UPA government, allotted more funds on health and education.
He began his speech with concerns over inflation, which he blamed on domestic and global factors, and said the intention of his government was to make growth more inclusive with a focus on social sectors and agriculture.
"The economy is expected to grow by 8.7 percent," he said, referring to the growth for this fiscal projected by the Economic Survey tabled by him a day earlier. "But I personally think, the growth would be slightly higher at 8.8 percent."
Maintaining that keeping inflation under check was one of the “cornerstones” of the Government's policy, Chidambaram said the 11th Five Year Plan had begun on a robust note.
A populist Budget providing for a massive farm loan waiver, income tax sops across the board and no additional burden on the corporate sector on Friday prompted widespread speculation that Lok Sabha polls may be held before the end of the year, probably by October or November.
Television channels showed farmers celebrating the loan write-off, but the government's communist allies said many were indebted to private money lenders and would not benefit. CPI on Friday criticised the Budget 2008-9 saying it lacked long-term perspective and gave the indication that direction of economic reforms remained the same that could be "dangerous". Terming the exercise as a "stunt", the party said the Budget was silent on the four per cent interest rate on loans to farmers and demand for setting up of National Debt Relief Commission.
Congress has strengthened its hand against the opposition and Left allies with a farmer-friendly Budget, raising a chance of early elections and reviving hope for a controversial nuclear deal.Reports Reuters.Congress leaders had been reluctant to push forward the civilian nuclear cooperation deal with the United States in the face of staunch opposition from their communist allies, who had threatened to bring down the coalition over the issue.US officials warned this month that time was fast running out for the deal, which would end decades of nuclear isolation for India and allow it to access international nuclear fuel and equipment.
Many analysts had all but written the agreement off.
But Finance Minister Palaniappan Chidambaram upset those calculations on Friday with a budget aimed squarely at elections and India's rural poor, with a $15 billion scheme to waive loans held by 40 million small farmers.
Elections have to be held by May 2009, but Congress now has less to fear from an earlier vote, analysts say, meaning its leader Sonia Gandhi might just call the Left's bluff over the nuclear deal.
"It's a pre-election Budget, a Budget with an eye for early elections, but whether or not they will go for it I don't know," said Mahesh Rangarajan, a political analyst and history professor at Delhi University.
"Sonia Gandhi has to make the decision."
Newspapers reported on Friday that the government was close to concluding a nuclear safeguards agreement with the International Atomic Energy Agency in Vienna, a crucial step in tortuous negotiations over the agreement.
The deal would also need to be ratified by the 45-nation Nuclear Suppliers Group and go back to the US Congress for final approval, in good time before America's own elections in November.
Supporters of the deal like nuclear expert RR Subramanian were in good spirits.
"This is nothing short of an election budget," he said.
"They have virtually said goodbye to the Left. The nuclear deal will be done by July and elections will be in October. This budget clearly indicates the deal has been saved."
But others said a lot still needed to be done on the nuclear deal in a short space of time.
"It's 5 to 12 as far as many people are concerned," said one Western diplomat, "but I think it could go through."
"They may have left it too late, but there is obviously one last bid to push it through," said political analyst and columnist Prem Shankar Jha.
"The Budget lacks long term perspective. It is more of short term relief", CPI Secretary D Raja told PTI.The direction of the economic reforms is the same, which could be "dangerous", he said.On NREGA, he said the allotment is not enough given the fact that the whole country has to be brought under its purview.
The rupee slipped against the dollar after the budget but the benchmark bond yield eased 5 basis points on the day to 7.55 per cent after the finance minister said he expected to better his fiscal targets for the current financial year.
Chidambaram said the government's aim was to boost employment and abolish poverty and inequality in the country of 1.1 billion people, where some 260 million struggle on less than $1 a day.
Finance Minister P Chidambaram on Friday announced an agriculture loan waiver in the 2008-09 Budget but a farmers' leader in Nagpur said the move will not help most farmers in the Vidarbha region due to the two-hectare landholding cap. The region has witnessed the maximum number of suicides by debt-ridden farmers in the last few years.
"Close to 60 per cent farmers in Vidarbha have a landholding of more than two hectares and most of them are in distress on the Maharashtra government's own admission", said Vidarbha Jan Andolan Samiti leader Kishor Tiwari.
He said all such farmers in the region, which has witnessed a large number of suicides by debt-ridden farmers, would be deprived of the benefit.
"I welcome the largely anticipated budgetary provision nevertheless in as much as a 'head' has been created but cannot help saying that even as a relief it is inadequate for the farmers in Vidarbha," Tiwari told IANS.
Pointing out the absence of provisions for increasing farmers' income, price stabilisation and incentives for low-cost farming that would have signalled a beginning of the quest for a durable solution to the agrarian crisis, Tiwari also deplored Chidambaram's silence over food security and rural health.
The annual Budget presented by Chidambaram has a farm loan waiver provision of Rs 600 billion intended to extend the benefit to 40 million farmers across the country. The one-time settlement would cover marginal and small farmers whose loans were rescheduled last year.
Echoing Tiwari's views, farm activist Vijay Jawandhia said a loan waiver up to Rs 50,000 rather than up to two-hectare land holding would have been more appropriate.
"The two-hectare cap would mostly benefit the sugarcane and grape cultivators in western and southern Maharashtra who have smaller land holdings but large-income-yielding agriculture because of the irrigation facility available there," Jawandhia said.
Leading seed manufacturer and Ankur Seeds Corporation managing director MG Shembekar, however, welcomed the farm loan waiver provision saying it would help the cotton growers in Vidarbha.
As the nation looks forward to tax benefits by the finance minister in United Progressive Alliance government's last budget, market pundits feel that the capital market will have little to cheer as the budget is likely to be a populist one, focusing on inclusive growth. Empirical data suggests that there is no thumb rule to conclude what course the market takes pre- and post-budget. On the eve of this year's Budget, equities erased most gains to end flat as positive economic data was overshadowed by poor global cues. Ahead of the Budget, investors were unwilling to take fresh bets waiting for some news to improve the mundane sentiment in the market. Bombay Stock Exchange's Sensex ended flat at 17,824.48, after rising to a high of 17,921.51 and slipping to a low of 17,690.16, intra day.
Corporate India saw Finance Minister P Chidambaram's farmer-friendly national budget on Friday as a signal that elections are close and fumed that he had done little to boost industry.The government promised higher spending for ailing farms and funds for rural revival in its budget on Friday, but it stuck to fiscal goals and pledged to keep inflation under control ahead of elections due in 2009.
Chidambaram unveiled a debt relief package for farmers of 600 billion rupees (15.05 billion dollars) and offered tax exemptions for individuals.Finance Minister Palaniappan Chidambaram, presenting the fifth and last full budget of the left-leaning administration, proposed $15 billion to write off debt owed by small farmers to banks in a move analysts said was aimed at the ballot box.He pledged higher spending on health and education to spread the benefits of an economic boom beyond the cities to rural voters and proposed raising the income tax threshold. Duties on small cars and two-wheelers will be cut to boost manufacturing.He left corporate tax rates unchanged but said he was raising a tax on short-term capital gains, aimed at share transactions, to 15 per cent from 10 per cent, helping send the stock market down 1.4 per cent on the day.
The government promised higher spending for ailing farms and funds for rural revival in its budget on Friday, but it stuck to fiscal goals and pledged to keep inflation under control ahead of elections due in 2009.
Finance Minister Palaniappan Chidambaram, presenting the fifth and last full budget of the left-leaning administration, proposed $15 billion to write off debt owed by small farmers to banks in a move analysts said was aimed at the ballot box.
He pledged higher spending on health and education to spread the benefits of an economic boom beyond the cities to rural voters and proposed raising the income tax threshold. Duties on small cars and two-wheelers will be cut to boost manufacturing.
He left corporate tax rates unchanged but said he was raising a tax on short-term capital gains, aimed at share transactions, to 15 per cent from 10 per cent, helping send the stock market down 1.4 per cent on the day.
"The emphasis on social sectors like health, education and the rural economy do suggest that the budget is leaning towards some populist measures," Yes Bank chief economist Shubhada Rao said, although she noted excise cuts would help dampen inflation.
The rupee slipped against the dollar after the budget but the benchmark bond yield eased 5 basis points on the day to 7.55 per cent after the finance minister said he expected to better his fiscal targets for the current financial year.
Chidambaram said the government's aim was to boost employment and abolish poverty and inequality in the country of 1.1 billion people, where some 260 million struggle on less than $1 a day.
Television channels showed farmers celebrating the loan write-off, but the government's communist allies said many were indebted to private money lenders and would not benefit.
But he left corporate tax rates unchanged in the budget for the new fiscal year.
In the past 19 Budgets since 1991, the stock market has shown a mixed trend on the Budget day. However, the market has not reacted strongly — negative or positive — for the past six budgets on a closing basis, with the exception of the previous year. Brokers’ watchers say this is an indication that the Budget is increasingly losing relevance as far as the stock market is concerned. If the average of past six years is taken, the major indices have risen or fallen 2% in the trading session on the day of the Budget compared with the previous day’s close. In the preceding six years, the change in major indices on the day of the Budget has been 7% either ways. s
The debt waiver and other measures targeted at farmers gave the minister no leeway to reduce company taxes, said V Balakrishnan, chief financial officer at Infosys Technologies, India's second-largest software maker.
"He has taken measures to boost growth in an election-year budget," said Balakrishnan, who saw the fiscal package for the year starting April 1 as an indicator of a national election coming sooner than the due date of May 2009.
India's flagship software industry had demanded an extension of a tax holiday that ends next year as an appreciating rupee dents its dollar-billed sales and a recession looms in the United States, its biggest market.
"We are disappointed that some breathing space has not been offered, especially to small software firms that are facing the macroeconomic challenge of what is happening in the US," said Balakrishnan.
Some 30 million indebted farmers' loans would be fully waived and another 10 million would receive aid, said the finance minister, whose budget also preceded nine state elections scheduled for this year.
"It looks like a totally pre-election budget," N Reghuraj, who heads the Karnataka state chapter of the Confederation of Indian Industry, said in this southern Indian city.
Chidambaram, while offering debt relief to farmers, had done little to boost agriculture, said S Viswanathan, managing director of John Fowler (India), which makes filters that go into cars, commercial vehicles and tractors.
The magnitude of the giveaway is such that it exceeds the 12.7 billion dollars in foreign investment that came to the country last year, he said.
"For industry there have been few concessions, no significant impact," Viswanathan added. "It is an opportunity lost for the economy to increase growth from 8.7 per cent to double digits."
The farm sector is key as it provides a living for two-thirds of India's 1.1 billion population.
The Congress party-led coalition came to power in 2004 on the plank of improving the lives of farmers, who make up an influential voting block but were seen as not receiving their share of the dividend from a growing economy.
"The politics of economics are at play" in the budget, Uday Kotak, managing director of Kotak Mahindra Bank, told the CNBC TV-18 business news channel.
Farm growth is forecast to slow to 2.6 per cent this fiscal year from 3.8 per cent the previous year, raising alarm about India's ability to continue to feed itself. That compares with 10.7 per cent growth in services and 9.7 per cent in manufacturing.
"The budget was as expected, populist in nature," said DK Joshi, economist at the credit rating company Crisil. "I am slightly concerned about the debt waiver scheme as it is unclear at the moment whether banks would be paid back any amount by the government."
Shares of state-owned banks fell after Chidambaram announced the debt waiver.
"The long-term effects of the budget seem to be a total disappointment," said Anil Mittal, head of Parenteral Drugs India, speaking for the pharmaceutical industry.
The budget "provides nothing for support to industry or development in the long run," he said.
The finance minister had been expected to lower fees, taxes and duties on the telecom sector, said market-research firm Frost and Sullivan.
"But this was not even touched upon by the minister in his budget," it said, adding that for the information-technology and telecoms industries "it was a lacklustre budget."
Experts are expecting the Friday’s session to be a volatile one because of volatility in global markets. They add that investors should not panic if the market see bumpy rides. “Long-term investors who have invested in good companies should not try to enter and exit the stocks on Friday based on immediate reaction of the market after the Budget announcements,” says Religare Securities senior research analyst Dalpat Mehta.
He adds that the market may not see any downward pressure for two reasons. One, this being the final Budget of the UPA government, there are unlikely to be any radical proposals. Also, there has been no major build-up of positions in the run-up to the Budget this time around.
“Less of leveraged positions is likely to prevent any major fall on the Budget day. Retail investors need not worry, as there may be some slowdown in earnings, but growth rates will be respectable nevertheless,” adds Mr Mehta.
Also, data suggest that intra-day volatility during the Budget day has gone down in the past six budgets. This has been in the range of 1-3% during this period compared with over 5% in the budgets prior to that.
Consumers can now enjoy cheaper cars, two-wheelers, set top boxes, while they will have to pay more for their smoke and mobile handsets, thanks to Budget proposals made by Finance Minister P Chidambaram.
Chidambaram has also ensured that consumers have much more savings in taxes to be able to afford many luxuries such as owning small or hybrid cars by proposing lenient levies on personal income that could help an individual save up to Rs 44,000 per year.
At the same time, the finance minister has laid the ground for cheaper fertilisers for farmers by reducing customs duty on crude and unrefined sulphur as also phosphoric acid used for making the agri-nutrients.
Simultaneously, the feed for chicken and other livestocks will also be cheaper with the Budget proposing cutting down customs duty on bactofuges and feed additives and pre-mixes.
But, the gesture for health care is the most significant one with the Budget cutting down customs duty on six specified drugs and bulk drugs while slashing by half the excise duty at eight per cent on drug formulations and exempting anti-AIDS drug Atazanavir and bulk drug for its manufacture.
Day traders would not mind it, given that they thrive whenever there are wild swings in the market. However, experts are advising retail investors not to base their investment decisions purely on the announcements made in the Budget.
Let's see how the market has responded to the budget presented by the UPA government since it came into power.
Year 2004-05:
The then ruling NDA government decided to go for early polls harping on "India Shining" campaign. Hence the government had to present interim budget on February 3, 2004.
January 30, 2004
A day before the Budget:
Negative sentiment prevailed in the market as the benchmark BSE Sensex ended the last trading day of the week in the negative territory. The 30-stock index fell for the third day in a row by 107.08 points (1.85 per cent).
The Sensex opened firm at 5841.21 points, about 38 points higher than the Thursday's closing. However, it steadily declined during the course of the day's trading and closed at 5695.67 points.
Budget day:
The Dalal Street reacted to Finance Minister Jaswant Singh's offering with disappointment. The benchmark BSE Sensex sank soon after much awaited presentation, and closed 75 points or 1.3 per cent lower at 5,621 points. Investors lost almost Rs 50,000 crore as the BSE's market capitalisation fell to Rs 11.4 lakh crore from Rs 11.9 lakh crore in the previous trading session.
A day after:
The Sensex bounced back gaining 2.4 per cent or 136 points to close at 5,757 points as funds bought across sectors. Institutional investors kept up their steady purchases and big ticket individual investors bought on technical parameters.
For the markets
The Finance Minister tried to seduce investors by promising to extend the exemption on capital gains tax by three more years.
FM does the Santa act; presents please all Budget
29 Feb, 2008, 1350 hrs IST, INDIATIMES NEWS NETWORK
It was Santa Chidambaram all the way – a budget that would please the people and perhaps 10 Janpath. To even the most ignorant it would be obvious that this was an election year budget. From the expected giant debt waiver for agricultural loans to increased allocation for National Rural Employment Guarantee Programme to the rather generous increase in the minimum tax slab for individuals, the FM has tried to please all kinds of vote constituencies. He is perhaps also hoping that strong economic growth would keep revenue buoyancy stable to help him pay for all that he has dished out.
Also announced are absolute increases for programmes for women, children, and minorities; the FM’s goodies bag kept producing gifts for everyone. Even though he stressed in the initial part of his speech on delivery systems, apart from the pilot smart card scheme for food grain distribution and a proposal to initiate the setting up of a monitoring mechanism for government schemes, he failed to announce any substantial steps to improve delivery systems. The Economic Survey also noted in several places the importance of delivery mechanisms.
The markets slipped even as the FM read out his speech and announced the giant waiver of farm loans. A recovery from the bottom ensued when he announced excise cuts on buses, small cars and two wheelers. But, the markets slipped once more as chose to keep dividend distribution tax constant and more crucially raised the rate on short term capital gains. This is something the FM’s alliance partners the Left Front will love to see. At the end of the Budget speech the Sensex was down by 384 points.
The big bunny in the magical bottomless hat which PC fished with great flourish was the undoubtedly the waiver of agricultural loans. Amidst a huge uproar in parliament, the FM proposed to set aside Rs. 60,000 crore or this purpose. The waiver amounts to 4% of total bank loans – a huge figure on all counts. Even rescheduled loans have been made eligible for the loan waiver under this scheme. The exercise of loan waiver is very conveniently supposed to end by June 30, 2008; PC would hope just in time for elections for the new Lok Sabha. Banks will be compensated out of the provision made in the general budget. He also allowed these farmers to borrow afresh, perhaps to set the stage for the next government to waive off these loans too. PC also disregarded protests from the BJP to earmark special schemes for minorities. He announced several schemes for minority areas.
The middle class would be suitably pleased with the generous and not just a token increase in the minimum tax slabs for individuals. Perhaps, the finance minister was waiting for an election year budget to give out the big dole in one go. He increased the minimum tax slab from Rs 1, 10,000 to Rs 1, 50,000; an increase most salaried tax payers would be thrilled with. Also, benefiting individuals is the increase in the limit for medical insurance premium by Rs 15,000 in those cases where individuals pay medical premium for their parents. He also included the Senior Citizen Scheme and the Post Office Scheme in the list for eligible investments under Section 80C. He, however, failed to increase the limit for investment under this section.
There were no great steps for exporters but he promised to take into account any steps required at any point of time. ‘Total Financial Inclusion’ also found its way into the lexicon as he pressed retired bank officers and other personnel and set minimum account creation targets for Regional Rural Banks.
On the financial and capital markets side, he extended the requirement of PAN for all financial transactions subject to minimum threshold limits. He modified the provisions relating to double taxation of dividends where parent companies give out dividends to subsidiaries. He also announced the withdrawal of the much criticized banking Cash Transaction Tax but said that this will happen only from April 2009 onwards. Why does the FM think that the utility of the tax he thinks is so useful to nail black money players will be gone after 2009? The most critical measure undoubtedly on this count was the increase in the short term capital gains tax to 10% from 15%. Mercifully for the markets, there was no increase in the Securities Transaction Tax but he sought to get more revenue by imposing a Commodities Transaction Tax-another thing that is likely to please the Left.. He also loosened the stranglehold of the Fringe Benefit Tax a bit by taking crèche facilities, sports events for employees and guest houses for employees from the FBT list. Unfortunately for industry, there was no change in the corporate tax rate. Somebody’s got to pay for the goodies.
On the sixth pay commission he chose to wait for the recommendations of the sixth pay commission.
There was not too much tinkering on the indirect taxes front. The most critical provisions related to the reduction in excise duties on buses, small cars and two wheelers. The reduction in excise on both small cars and two wheelers will help Ratan Tata’s Nano remain in the fight with scooter and motorcycle makers. He reduced customs duties on critical medicines.
Climate change and tigers also found their way into the FM’s speech. The FM suggested the setting up of an institutional mechanism to address issues relating to climate change. 1411 really scared tigers got Rs 50 crore; the money will be used to arm and deploy a special tiger protection force.
On the overall government accounting, the FM said that the Revenue Deficit for the year would be at 1.4% as compared to the target of 1.5% for the year 2007-08. Similarly, the fiscal deficit for the year is expected to settle at 3.1% as compared to the budgeted target of 3.3%. For the next year, he has budgeted a Revenue Deficit of 1% and a Fiscal Deficit of 2.5%. He expects the direct taxes proposals to be revenue neutral and indirect taxes proposals to cost the government Rs 5900 crore. It is clear that he is banking on the economy to continue to grow at a fast pace. Tax buoyancy on account of high economic growth is what will help the FM find money for all the grand give-aways that he has announced in the budget today.
"The emphasis on social sectors like health, education and the rural economy do suggest that the budget is leaning towards some populist measures," Yes Bank chief economist Shubhada Rao said, although she noted excise cuts would help dampen inflation.
The Union Budget for 2008-09 Finance Minister P Chidambaram presented on Friday is populist ahead of elections but has left overseas Indians out of focus, according to expatriate Indians in the United Arab Emirates (UAE).
"The budget is a populist one as can be expected before elections," Abbas Ali Mirza, president of the Indian Business and Professional Council (IBPC) of Dubai, said on Friday.
The IBPC had organized a post-budget interactive session here, which was attended by top Indian entrepreneurs, businessmen and professionals.
Terming the budget populist, IBPC vice-chairman and Pravasi Bandhu Welfare Trust chairman and managing director K Shamshudheen said the debt waiver for small and marginal farmers was a bad step.
"The Rs 60,000-crore debt waiver to small and marginal farmers is a disaster. The government should have instead aimed at increasing farm productivity. Now agriculture will be all about taking loans," Shamshudheen told IANS.
"Also, NRIs were nowhere in the finance minister's mind when he prepared the budget," he said.
"I think it is high time organizations like IBPC approach the finance ministry at least three months in advance to draw his attention to NRI issues."
Abbas Ali Mirza said: "The debt waiver is meant for small and marginal farmers only and not for everybody. You need to include everybody in the
Budget draws flak from trade unions
New Delhi (PTI): The budget for 2008-09 presented in Parliament on Friday drew flak from various trade unions, which described it as a "populist" one.
In a statement, BJP-affiliated Bharatiya Mazdoor Sangh president Girish Awasthi alleged the budget was misleading.
Regarding Finance Minister P Chidambaram's announcement about waiver of agricultural loans, Awasthi claimed it would not help farmers in rural areas as they do not take loans from banks. "Farmers take loans from rich people in villages," he said.
He welcomed the hike of Rs 500 in the monthly remuneration of Anganwadi workers, but added they should be made government employees.
CPI-M affiliated Centre of Indian Trade Unions alleged allocation in agriculture was totally insufficient. Massive government investment in irrigation was needed, but the budget proposal was inadequate in this regard, its president M K Pandhe claimed in a statement.
Increase of Rs 1,000 crore in allocation for ICDS is also inadequate, the CITU president alleged.
The increased income tax exemption limit is less than expected, he said. On the whole, the working class and poor people of the country will not feel happy about this budget, the CITU president alleged.
India-IAEA talks progress; consultations to continue
Mumbai (PTI): India and IAEA have moved a step closer to finalising the 'agreed text' on India-specific safeguards agreement, a key requirement under the Indo-US deal.
Considerable progress was made during their fifth round of talks that ended in Vienna on Thursday night, International Atomic Energy Agency spokesperson said. Consultations would continue, he said.
"Considerable progress has been achieved during the round of negotiations about a safeguards agreement between the IAEA and India held this week in Vienna. Consultations between India and the Agency will continue," the IAEA spokesperson told PTI in an e-mail response.
The consultations originally scheduled to conclude on Wednesday were extended by a day, IAEA sources said.
Ravi Grover, Director, Strategic Planning in the Department of Atomic Energy, and India's Ambassador to Austria Saurabh Kumar led the Indian delegation at the talks.
Articulating India's position, Foreign Secretary Shivshankar Menon has made it clear that India was "not looking at a deadline" but was trying to wrap it up as soon as possible.
Earlier, Atomic Energy Commission Chairman Anil Kakodkar had said that India had to finalise the agreement with IAEA at the earliest. "It has to be correctly done and it has to meet all the requirements and so it's a long technical process," he had said.
"There are several steps involved. We have to move step by step," according to Kakodkar.
Union budget a 'divine gift' to farmers: Karunanidhi
Chennai (PTI): The Union Budget is a "divine gift" to farmers as it had waived Rs 60,000 crore of their outstanding loans, Tamil Nadu Chief Minister M Karunanidhi said on Friday.
Congratulating Chidambaram for presenting a "please all budget", the Chief Minister in a statement noted that the budget had provided Rs 300 crore for a desalination plant in Chennai to meet the drinking water requirments of the city and Rs 70 crore for an integrated powerloom complex at Erode.
The allocation for education, health, agriculture, road and drinking water facilities had been substantially increased, Karunanidhi, whose DMK is part of the ruling United Progressive Alliance at the Centre, said.
The hike in the threshold limit of income tax would benefit the middle class and government employees, he added.
Union budget a 'divine gift' to farmers: Karunanidhi
Chennai (PTI): The Union Budget is a "divine gift" to farmers as it had waived Rs 60,000 crore of their outstanding loans, Tamil Nadu Chief Minister M Karunanidhi said on Friday.
Congratulating Chidambaram for presenting a "please all budget", the Chief Minister in a statement noted that the budget had provided Rs 300 crore for a desalination plant in Chennai to meet the drinking water requirments of the city and Rs 70 crore for an integrated powerloom complex at Erode.
The allocation for education, health, agriculture, road and drinking water facilities had been substantially increased, Karunanidhi, whose DMK is part of the ruling United Progressive Alliance at the Centre, said.
The hike in the threshold limit of income tax would benefit the middle class and government employees, he added.
'Increased excise on clinkers may affect small units'
New Delhi (PTI): Finance Minister P Chidambaram's proposal to increase excise duty on cement clinkers has met with apprehension from the industry which feels it could adversely affect mini and small plants, although the overall Budget was welcomed as a "positive one".
The finance minister proposed an excise duty of Rs 400 per metric tonne or 14 per cent ad valorem, whichever is higher on bulk cement. Earlier it was a flat excise duty of Rs 400 per metric tonne in bulk cement.
Further, he also increased excise duty on cement clinkers by Rs 100 to Rs 450 from Rs 350 per metric tonne.
Reacting to the proposals, Ambuja Cements Managing Director A L Kapur told PTI that it (increased excise on cement clinkers) would adversely affect the mini and small plants, especially those in Uttarakhand and northeastern states.
"... it will deter the companies to sell and set up clinker plants in backward states, like Uttarakhand and the northeast. In one sense, concession given to set up clinker units in these states have been withdrawn," Kapur said.
He said usually independent clinker plants are set up in these states, which sell clinkers to cement manufacturers.
The industry, however, does not see an immediate impact of the increase in excise duty on bulk cements.
"Bulk cement supply is hardly two per cent in the country. So there should not be any impact on the industry as a whole," Cement Manufacturers' Association (CMA) President H M Bangur said.
He said as the duties on retail have been kept untouched there was no foreseeable change in the price.
The industry hailed the Budget as a "positive one" for the overall economic growth.
Gold surges to new peak at Rs 12,550 per 10 gram
New Delhi (PTI): Gold prices zoomed to a new peak at Rs 12,550 per 10 gram on the bullion market on Friday on heavy buying by stockists and jewellery fabricators influenced by a firm trend on the London market. Silver, too, touched a record high of Rs 23,800 per kg.
In London, gold shot up to an all-time high level of USD 976 an ounce as dollar fell to its lowest against the euro, boosting demand for the precious metal.
In India, a meltdown in stock markets also shifted some of the funds toward bullion, as investors looked at it as a safer fund parking option.
The BSE bencmark, Sensex, shed 245.76 points and close at 17,578.12 as Finance Minister P Chidambaram's Budget proposal to increase the short-term capital gains tax to 15 per cent did not go down well with investors.
The gold rose to a record in London as the dollar slumped to an all-time low against the euro, spurring demand for the metal as an alternative investment to stocks and bonds, a traders said.
They added that dollar fell to a record low against the euro for the fourth day on growing signs of US recession and crude oil rose to a record 103.05 dollar a barrel today.
Standard gold and ornaments shot up by Rs 170 each at Rs 12,550 and Rs 12,400 per 10 gram respectively. Sovereign was also up by Rs 25 to an all-time high of Rs 9,925 per piece of eight gram.
Silver for immediate delivery rose 19 cents, to 19.95 dollar an ounce, the highest since 1980. The impact was felt on the domestic front as silver ready shot up by Rs 200 at Rs 23,800 per kg and weekly-based delivery by Rs 460 at Rs 24.820 per kg. Silver coins went up Rs 100 at Rs 26,700 for buying and Rs 26,800 for selling of 100 pieces.
Sensex makes new record -- lowest percentage move
Mumbai (PTI): On the eve of Budget, the stock market recorded a different kind of record-- the lowest ever single-day movement in percentage terms!
The 30-share Sensex moved down by 0.000085 per cent -- its lowest ever in its over two decades of history.
Interestingly, the movement of 1.51 points in absolute value terms is far from being the lowest ever and the Sensex has recorded an upward or downward movement of less than even 0.1 points on at least 10 occasions since 1986 when Sensex came into existence.
The key index closed today's trading session at 17,824.48 points as against its wednesday's close of 17,825.99 points.
In percentage terms, the previous lowest one-day loss was seen on April 28, 1997, when the Sensex dropped by 0.0016 per cent. The smallest one-day gain of 0.0013 per cent was seen on September 9, 2004.
However, in absolute value terms, the movements on these two occasions were of 0.06 points (gain on April 28, 1997) and 0.07 points (loss on September 9, 2004).
The Sensex has gained by less than 0.01 per cent on at least 11 occasions so far. In terms of losses, it has posted a loss of less than 0.01 per cent in at least 13 trading session, including on Thursday.
These include 0.0014 per cent gain on February 14, 2001 (0.06 points), a 0.0018 per cent rise on November 10, 2005 (0.15 points), up by 0.0019 per cent on March 25, 2003 (0.06 points) and a gain of 0.0024 per cent on May 10, 1996 (0.09 points).
For losses, the Sensex dropped by 0.002 per cent each on June 7, 2001 (0.07 points) and June 18, 2003 (0.07 points), while it shed 0.0022 per cent on March 19, 1999 (0.08 points) and by 0.0034 per cent on April 9, 1996 (0.12 points).
http://www.ndtvprofit.com/2008/02/29113235/Tax-exemption-slab-raised.html
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Tax exemption slab raised
Saurabh Kumar
Friday, February 29, 2008 (New Delhi)
The Finance Minister, making a populist move, raised the income tax exemption up to Rs 1.5 lakh for men and upto Rs 1.8 lakh for women. Senior citizens would now get tax upto Rs 2.25 lakh. However, there would be no change in the corporate tax.
There would be no change in the STT rates, but short-term capital gain would now attract 15 per cent up from 10 per cent.
The Finance Minister said that there would be no change in peak customs duty; however, he reduced the excise duty to 14 per cent from 16 per cent.
Customs duty on life saving drugs would now be 5 per cent and convergence products duty would be reduced to 5 per cent.
The excise on small cars has also been reduced to 12 per cent from 16 per cent and that on two and three wheeler also by the same amount. Anti-aids drug would be exempted from excise duty.
Fiscal concerns
The fiscal deficit is estimated to be 3.1 per cent which is 2.5 per cent of GDP and the tax to GDP ratio to be at 12.5 per cent.
The defence allocation has been increased by 10 per cent to Rs 1.05 lakh crore. The revenue deficit will be at 1.4 per cent as against Budget estimation of 1.5 per cent. The deficit is estimated at Rs 55,184 crore, 1 per cent of GDP and it would take one year to eliminate the revenue deficit. The plan expenditure is estimated at Rs 2.43 lakh crore.
Loan waiver
Conscious about the problem of agriculture indebtedness, the Finance Minister announced a scheme of debt waiver and debt relief for farmers under which, all loans by SCBs/RRBs overdue under the scheme upto March 31 2007 would now be overdue till December 31, 2007. He also announced a complete waiver for marginal and small farmers.
He also announced a waiver for all marginal farmers with 1 hectre of holding and the waiver amounts to 4 per cent of total bank loans.
GDP firm
While presenting the Union Budget 2008, Finance Minister P Chidambaram said that the Indian growth story is very inspiring.
He said that in the first three years of UPA government, GDP growth has been 7.5 per cent, 9.4 per cent and 9.6 per cent respectively. Overall, the GDP growth rate in UPA tenure till-now had been 8.8 per cent. The Finance Minister is confident of maintaining GDP growth at 8.8 per cent.
Mentioning agriculture, he said that the sector is struck at a 'disappointing note' and agriculture growth for whole year is estimated at 2.6 per cent. Prices of wheat and rice increased by 88 per cent and 15 per cent respectively globally.
The FM said that the price trends are inflationary and balancing supply side issues is of utmost importance. In this respect, the RBI would take measures to monitor the capital inflows.
Food sufficiency
The country is determined to become self-sufficient in food and growth has been inclusive during the UPA tenure, he added.
Country’s agricultural credit would reach Rs 2.4 lakh crore by 2008 and mid-day meal scheme is at present covering 11.4 crore children. The gross budgetary support is estimated at Rs 2.28 trillion.
Focusing education
Under Jawahar Nirodiya Vidyalayas scheme, Rs 130 crore has been allocated and additional Rs 80 crore would be provided to set up new hostels in Vidyalayas.
In FY’09, Rs 13,100 crore would be deployed under Sarva Siksha plan and Bharat Nirman would get Rs 31,280 crore. The government would also spend Rs 650 crore on new Model Schools. The total expenditure on education would also increased by 20 per cent to Rs 34,400 crore.
The education department would also set up three IITs in AP, Bihar and Rajasthan and more institutions for higher education would be added in the 11th plan. The department would also provide Rs 85 crore to build a knowledge society. 16 central universities will also be set up.
Allocation on health has been increased by 15 per cent to Rs 16,534 crore which will also be used to set-up fully decentralised health delivery system.
Social responsibilities
Allocation to NRHM would be increased to Rs 12,050 crore and Rs 1042 crore would be spent in FY'09 to eradicate polio. FY'09 allocation for AIDS programme has been decided to be Rs 990 crore.
The NREG scheme would be rolled out to 596 districts and Rs 16,000 crore would be invested under the scheme.
Allocation under Rajiv Gandhi Drinking Water scheme would be at Rs 7300 crore and that for urban facilities would be at Rs 6,866 crore as against present Rs 5,482 crore.
The total allocation for SCs, STs, OBCs schemes would be Rs 3,966 crore.
The Finance Minister also allocated Rs 11,460 crore for women specific schemes and Rs 205 crore for unorganised sector worker insurance. For child specific schemes, Rs 33,434 crore has been allocated.
Over 30 lakh SHGs would be provided special attention and LIC would cover all women SHGs linked to banks.
The government would mobilise Rs 10,000 crore for plan capital expenditure under Plan B. The ICDS allocation has been hiked to Rs 6,300 crore.