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Highlights of the Union Budget 2003-04
February 28, 2003 15:33 IST
Following are the main points of the Union Budget for the financial year starting April 1, presented so far to Parliament by Finance Minister Jaswant Singh on Friday:
Standard deduction of 40% or Rs 30,000 whichever is less for salary till Rs 5 lakh, above Rs 5 lakh, 20,000.
Under a new health insurance scheme, an individual would have to pay one rupee per day as premium for 365 days, Rs 1.50 per day for a family of five and Rs two per day for a family of seven including dependents and will be eligible for a benefit of Rs 30,000 in case of hospitalisation. In the event of death, the family would get Rs 25,000.
- Income tax and corporate tax rates remain same.
- Five per cent surcharge levied last year for country's security halved to 2.5%, while for individuals there will be no surcharge.
Individuals with income of over Rs 8.5 lakh to pay 10% surcharge towards security of the country.
Government forecasts, finances
Domestic economy well placed to withstand global uncertainty. Jaswant Singh says India's macroeconomic situation has never been better.
Fiscal consolidation through tax reform is one of the budget's five priorities.
Government to maintain tax concessions on housing interest loans.
Government to give tax rebate of Rs 12,000 per child for education.
Standard tax deduction rate boosted to 40 per cent of salary up to Rs 500,000.
Senior citizens' income up to Rs 153,000 to be fully tax exempt.
India to continue proactive policy of pre-paying high-cost external debt.
India to buy back high-interest government bonds from banks.
States to swap all loans with interest rates of more than 13 per cent by 2004-05. States' debt swap to cut interest costs by Rs 810 billion.
Government proposes development of universal health insurance scheme at cost of one rupee a day for individuals, Rs 1.50 for a family of five, two rupees for family of seven.
Life Insurance Corp (LIC) to launch pension scheme offering guaranteed nine percent return to be subsidised by government.
Private and public interest should combine to improve country's infrastructure.
Initial government funding for new infrastructure projects to total Rs 20 billion for year.
Government plans to invest around Rs 400 billion in 48 new road projects, one quarter of them to be made of cement and concrete.
Government plans to modernise Bombay and New Delhi airports to allow them to attain global standards. India to set up private airports in southern cities of Hyderabad and Bangalore.
Other significant measures
- Domestic companies to pay 12.5% dividend tax.
- Central govt to compensate states 100% in year one after VAT introduction, 75% in year two and 50% in year three.
- Excise on garments down to 10% from 12%.
- Exemption on capital gains for 1 year on buybacks.
- Exchanges not to pay any capital gains tax on corporatisation.
- Tax holiday for R&D companies.
- It is proposed to exempt equity based schemes from dividend and distribution tax for one year.
- Introduction of service tax and VAT from April 1
- Fiscal consolidation through tax reforms
- Jaswant says accelerate reforms to enhance efficiency
- Budget to focus on infrastructure
- Rs 400 billion to be spent on 48 road projects.
- Tax concessions on housing loans to be maintained.
- Tax rebate of Rs.12,000 per child for education.
- Public and private initiatives to be combined for improving infrastructure.
- Rs.110 billion to be spent on renovating two airports and two seaports.
- Two companies to be set up for building four new airports.
- Cash management to be introduced in major spending ministries.
- Private airports at Delhi, Mumbai, Bangalore and Hyderabad.
- Additional funds for rural roads from increased cess on diesel.
- Premature repayment of loan of $3 billion from World Bank and Asian Development Bank.
- Customs duty on life savings equipment lowered.
- Leave Travel Allowance to government employees restored.
- Senior citizens can self declare tax returns.
- Debt swap scheme between centre and states to save states Rs 810 billion in interest payments.
- New scheme on hi-tech horticulture farming.
- Modernisation of roads, airports and railways.
- Standard deduction of income tax raised for salaried class.
- Customs duty on optical fibre has been reduced from 25 per cent to 20 per cent.
- Customs duty on number of capital goods has been reduced from 25 per cent to 15 per cent.
- Customs duty on a large number of textile machinery reduced from 25 per cent to five per cent to encourage modernisation.
- Concession extended to IT under section 10 a and 12 b will be continued.
- Income Tax exemption for pharmaceuticals and biotechnology to be at par with Information Technology.
- New low cost general insurance plan.
- Self declaration of tax returns will be accepted from senior citizens.
- Senior citizens with an income of Rs 1,53,000 exempt from income tax.
- Prime Minister will inaugurate 227 ex-servicemen medical centres in the country including in remotest districts.
- Varisht Bima Yojana for senior citizens above the age of 55 years to be introduced. The yojana will carry nine per cent interest rate.
- Reduced customs duty on hearing aids, tricycles by five
- per cent.
- Royalty income on books etc free from IT till Rs 3 lakh.
- Education expenses upto Rs 12,000 per child to come under Sec 88 benefit.
- 38 new road projects worth Rs 40,000 crore.
- Two more major aiports in private sector in Delhi and Mumbai will be set up. Already two airports in Bangalore and Hyderabad are coming up.
- Innovative funding mechanism for modernisation of Railway, airports and ports and roads will be undertaken.
- Income Tax exemptions will be given for corporations set up by central and state governments for exservicemen.
- New pension scheme with equal contribution from employers and the government.
- Life saving drugs exempt from excise duties.
- In a move to encourage research and development in medical sector and the need to upgrade facilities, it has been decided to increase rate of depreciation of life saving equipment from existing 25 per cent to 40 per cent.
- To promote India as a major health destination, Singh announced to extend tax benefits to private hospitals.
- To encourage sports and games, the government would shortly issue guidelines for direct funding for sports infrastructure facilities through public-private funding.
- Basic customs duty on glucometer and strips will be reduced from 10 to 5 per cent.
- It is proposed to reduce customs duty on life-saving equipment from 25 per cent to five per cent.
- The income tax interest deduction on housing loans up to Rs 1,50,000 for self-occupied houses will continue.
- PSU genaral insurance companies to work out universal health insuarance scheme at Re 1/day.
- Standard deduction of 40% or Rs 30,000 whichever is less for salary till Rs 5 lakh, above Rs 5 lakh, 20,000.
- Under a new health insurance scheme, an individual would have to pay one rupee per day as premium for 365 days, Rs 1.50 per day for a family of five and Rs two per day for a family of seven including dependents and will be eligible for a benefit of Rs 30,000 in case of hospitalisation. In the event of death, the family would get Rs 25,000.
- Additional cess of 50 paise per litre of fuel for funding North-South and East-West corridors to mop up Rs 2,600 crore.
- Modernisation of JNPT and Kochi Ports at a cost of Rs
- 7,500 crore including dredging.
- Modernisation of taxation regime and expenditure
- rationalisation will be undertaken.
- Liberalised Government policy for mega power projects.
- Ceiling of 14 mega projects lifted and concessions will be
- available for all mega power projects which qualify.
- Addl 50 paise levy on disel, petrol per litre to fund infra-development projects.
- 48 new roads costing Rs 40,000 cr, national railvikas yojana costing Rs 8000 cr, two airports/seaports upgradation costing Rs 11,000 cr, two intl convention centres costing 1,000 cr.
- Customs duty on HV power equipment reduce to 5% from 25%.
- Buyback of high interest govt debt.
- No customs or excise on water supply projects, power projects customs duties reduced to 5%.
- It is the government's resolve to encourage diversification of Horticulture and Floriculture, Singh said.
- A new central sector scheme to promote hi-tech horticulture and precision farming.
- 12th Finance Commission to address the high-debt burden of states. The government has decided to allow debt-swap scheme to avail of the lower interest rate benefits.
- Debt of States towards Centre is Rs 2.44 lakh crore besides Rs 100,000 crore as coupon rate securities.
- All state loans of 13% to be swapped, states to save Rs 81,000 cr by 04-05.
- Urea price hike by Rs 12, DAP to cost Rs 10 more.
- Adequate outlay is being provided for the Task Force on inter-linking of rivers.
- Special programmes for desert districts of Rajasthan for developing pastures. Rs 100 crore for setting up a Task Force for the purpose.
- Andhra Pradesh Chief Minister Chandrababu Naidu will head a bipartisan task force with agriculture ministers from other states to expand and quicken drip irrigation projects.
- Bank credit for 50,000 self-help groups to be provided.
- Rs 598 crore already spent on 25,000 self-help groups as on January 3 this year.
- Women empowerment to be given additional stress.
- A number of initiatives proposed to conserve water by promoting drip irrigation and the like.
- Private banks will encouraged to open branches in rural sector to provide credit for farm equipment including tractors.
- To promote marine products, it has been decided to reduce
- excise duties on shrimp from 15 to five per cent.
- All powerloom workers to be provided with special insurance scheme for accidents.
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