THE INTERIM BUDGET 2014
Given below are some highlights of the Interim Budget 2014-15.
Change in tax rates
Considering the demands of the economic situation, the minister of finance announced some changes in the indirect taxes.
A cut down in the excise duty from 12 percent to 10 percent on all goods covered under Schedule to the Central Excise Tariff Act (Chapter 84 & 85 of the act for the period up to 30.6.2014).
Automobile industry which is suffering negative growth will be allowed a decrease in the excise duty.
Indirect taxes on cars and mobile phones cut in order to recover growth.
Exemptions will be withdrawn from the CVD on similar imported machinery.
The customs duty structure on non-edible grade industrial oils and its fractions, fatty acids and fatty alcohols will rationalise at 7.5 percent.
Growth
The annual growth for the year is expected at 4.9percent, estimating the GDP expansion in the third and fourth quarters as 5.2 percent.
Current Account Deficit
Considering the last year’s fiscal deficit $88 billion , the current account deficit for 2013-14 estimated at $45 billion.
The end of 2013-14 will see Forex reserves to be rising by $15 billion.
Agriculture
2012-13 saw a Food grain production of 255.36 million tonnes and the honourable minister praised the steady performance of the agriculture sector. The estimate for the current year is 263 million tonnes. Agricultural GDP growth is estimated at 4.6 percent in the current year.
Exports
The global trade recovered its growth decline from 6.1 in 2011 to 2.7 percent in 2013 thus indicating an overall recovery in the context of global trade growth.
In spite of 2013-14 beginning on a low note, the merchandise exports were observed to be USD 326 billion bringing along a growth rate of 6.3percent.
However, the imports run a downhill which calls for a need of augmenting growth in both exports and imports.
Defence
Spending ascended up to 10 percent to Rs.224,000 crore in 2014/15 from Rs.203,672 crore in BE 2013-14 .
SC Sub-Plan and Tribal Sub-Plan, Gender Budget and Child Budget
The minister proposed to allocate Rs.48,638 crore to the scheduled caste sub plan and Rs.30,726 crore to the tribal sub plan.
Also, the child budget plan will be of Rs.81024 crore and the gender budget upto Rs.97,533 crore.
Railways
The railway budget being was presented a few days before. The railways will receive an increased budgetary support of Rs.29000 crore in 2014-15 as against the Rs26,000 crore in 2013-14.
Banking
For the purpose of capital infusion in public sector banks, the budget will aid the financial sector by providing 11,200 crore.
Spending
The plan expenditure is estimated at Rs.5.5 trillion for 2014-15 same as that of the fiscal year. Non-plan expenditure is estimated at Rs.12.08 trillion in 2014-15.
Subsidies
The budget for total spending on food, fertilisers and fuel is Rs.2.5 trillion in 2014-15.
1.15 trillion rupees for food subsidy, fertiliser subsidy at Rs.679.71 billion.
Petroleum subsidy estimated at Rs.634.27 billion as against the revised figure of Rs.854.8 billion in 2013-14.
Budget Estimates
Fiscal Deficit
The fiscal deficit of 2014-15 is projected at 4.1 percent of GDP while the revenue deficit is seen at 3.0 percent. Fiscal deficit is anticipated at 4.6% of GDP in 2013-14 below the targeted 4.8%.
Borrowing/debt servicing
Gross market borrowing for 2014/15 estimated at Rs. 5.97 trillion while the net market borrowing seen at Rs. 4.57 trillion.
In 2014-15 the government plans to buy back/ switch bonds worth Rs.500 billion.
Rs.100 billion estimated for the Ways and Means advances for year 2014-15.
Repayment of debt is estimated at Rs. 1.397 trillion.
Interest payments expected to see a rise in 2014-15 at Rs. 4.27 trillion. The current fiscal year’s was at Rs.3.8 trillion.
Conclusion
Finance Minister recommends that regarding the limited sources and claims on these, the most vital ones be chosen and given only to the rightly deserving ones.
India’s economy has secured a place as the eleventh largest economy in the world. And with the going progress India’s nominal GDP will reach to the third largest economy in the world said the minister. The budget was concluded by the note that India will occupy a more significant position in the world as an economy and have an impact on other economies in the near future. Hence a need to keep the economy stable is seen.