An EAGLE's eye - blogger's view on Union Budget 2008-09

You must recently be witnessing many writers and freelancers being turning up as BLOGGERS and wearing up new feathers. It's by far a good trend in hitech-journalism. Many service providers like Google, Microsoft, Wordpress, Rediff etc. are providing good platforms and ample opportunities too to encourage these trends and to cope up with the competitive marketplace which indeed is a critical & strategic move to get a share of pie in the global market. Recently Microsoft has hosted a bloggers meet in Bangalore & Hyderabad. You might be wondering why I'm mentioning all these things here in the write-up pertaining to Union Budget 2008 and does it really matter?

A few days ago, I asked one of my good frnds, Dr. Saibel Farishta - who's relatively a known figure in "blogger's park" and whose blog pulls me in everyday to have a glimpse of different aspects of life - "How do you write so much on different issues everyday and what makes you adept for writing umpteen articles in a day?" I really get amazed by the number of articles in his blog and always wonder how could he write so much!
He replied - "As far as the blogwritings go, 1 should have an eagle's eye to write so much."

Aha, an "EAGLE's eye"... how realistic the statement is! One should indeed have an eagle's eye to write about anything, yup anything... You might think of many issues but to write, it takes a bucket of water to be pulled up from the well which is 50 feets deep inside, isn't it?

Let's get back to the topic. PC presented his 7th and UPA Govt's 5th Union Budget on February 29th, 2008. In his last 4 budgets in this tenure as FM, he had tried his best to uplift the status of Indian economy, for the betterment of its citizens and for getting back its due respect in global marketplace. India witnessed a phenomenon growth in each segment of economy and the entire world started realizing the importance of Indian market in optimization of their own economic growth. We must not forget the role of former PM, late Mr. P. V. Narsimharao & PM, Dr. Manmohan Singh in this regard which laid down the foundation for economic reforms and sustainable growth in Indian economy.

In the currently presented budget, PC, though felt the pressure - while formulating it - of upcoming general election which is on the cards next year and rumours are on air that it might be preponed (it might happen anytime since, post-budget sessions, Congress could opt for signing Nuclear Deal with USA and in-turn the same might call for early polls by this year end. My intuition says that Loksabha Election and assembly elections in MP, Chhattisgarh & Rajasthan could go on air simultaneously during Nov-Dec 2008). This budget can really be considered most humane and interesting budget in Indian history. The budget is really good. It gave us many interesting topics to discuss about. The new changes in IT slabs will give relief to every common people. Health insurance schemes and healthcare programs; textile upgradation fund; corpus fund to subsidise all women Self Help Groups for LIC cover for permanent disability; special attention to micro, small & medium enterprises; upgradation of 300 ITIs; subsidy for PDS; special funds for power reforms programs; Rs 2.80 lakh crore for agriculture credit; roll out of NREGA schemes to new 576 districts; Special funds for Sarva Shiksha Abhiyan, Midday Meals Schemes & Secondary Education Schemes; Special attention on education and rural development and many more salient features of this budget are really impressive and are able to draw a significant growth. the most significant and interesting feature of this budget is - Farmer's debts to be waived off upto Rs. 60,000 cr. Marginal farmers owning land upto one acre and small farmers owning 1-2 acres would be enjoying complete waiver of their loans taken from financial institutions. One time settlement of loans for other farmers has also been attended in this budget. By loan waiver scheme, the country is discharging a deep debt and sense of gratitude to farmers, says PC.

Agrarian crisis in India is a no-secret affair. It's indeed disheartening that farmers in many parts of the country are still committing suicide, especially, Vidarbha region of Maharashtra, Andhra Pradesh, Chhattisgarh, Karnataka, Kerala and Orissa. Maharashtra is the worst affected state in this regard followed by Andhra Pradesh. Since 1997, more than 25000 farmers have committed suicide, many by drinking the pesticides which is supposed to make their crops more productive. Poor production of agricultural produce, drought and pests have become an unending tragedy for the small farmers who've no means to rectify it. Crop failure has resulted in an increased ratio of debt for the farmers and thereby inability to repay the credit loans taken either from credit societies, bankers or local moneylenders. One of the major causes for the suicides by farmers, other than natural calamities, which I see is - ignorance of farmers & their issues by the govt. authorities (read Govt.); poor administration & governance by local authorities as well as Govt.; and less attention to their demands for subsidising the chemicals, fertilizers, agro-produce, and water resources. Now, it's a responsibility of each individual in the government performing any kind of authorized action -be it a minister, a bureaucrat or any authority- to handle this kind of situations with due care and to give proper attention to the concerns, requirements, problems & issues of all the farmers, of course, above their self interests. It must really be given a due care it requires. Only then we can expect some desired growth in Indian economy.

The waiver of Rs. 60,000 crs by UPA Govt. would certainly give a huge relief to the small farmers who have taken credit loans from credit societies and banking institutions, albeit it's not going to help the farmers who've been dependant upon the local moneylenders. PC must obviously have given a deep thought to handling these kind of situations which would be arriving soon. But any Govt. is restricted to offer their attention to these kind of farmers. But the think tank of the UPA Govt. have certainly to do a brainstorming about this issue.
If this issue is left behind for some time, the budget has given a due respect to the lives of small farmers who can now get relaxed from a burden of repaying the loans.

Now the most significant question which is arising here is 'Where the GoI will generate this much of revenue from for substantiating the waivers and other schemes'? Where will the money come from?

PC is confident of achieving 11th plan target of 9% growth. With the solid foundation of domestic investments and savings, we can expect a relatively higher growth if the GoI is able to prosper the proper mobilization and appropriate utilization of available resources. With the better targeting of govt. reserves and cash flow from FIIs, we can expect a sustainable growth in the economy which will ensure good reserves down the line. With the Indian economy expected to grow with precisely a higher rate in next financial years, we may expect growth in GDP of more than 9%. With this expected phenomenal growth every citizen of India will say then 'Chak De Indian Economy'!

I've listed down the salient features and highlights of the Union Budget 2008-09 presented by PC on February 29th, 2008 in my blog for your ready reference.

Rgrds,
Remmish Gupta

Highlights of Union Budget 2008-09

>Changes in IT slab. Threshold of exemption for all Income Tax assesses raised from from 1,10,000 to 1,50,000.
>Every income tax assessees to get relief of minimum of Rs 4,000.
>No change in rate of surcharge.
>New tax slabs will be: 10 per cent for 150,000 to 300,000, 20 per cent for 300,000 to 500,000 and 30 per cent above 500,000.
>For women, the income tax limit goes up from Rs 1.45 lakh to Rs 1.80 lakh. In case of senior women citizens, it increases from Rs 1.95 lakh to Rs 2.25 lakh.
>Fresh facilities, encouragement to sports and guest houses exempted from Fringe Benefit Tax.
>Five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from April 1, 2008.
>Five year tax holiday for promoting cultural tourism.
>Short-term capital gains increases to 15 per cent.
>Commodities Transaction Tax to be introduced on the lines of Securities Transaction Tax.
>Banking cash transaction tax withdrawn from April one, 2009.
>Direct tax proposals to be revenue neutral. Indirect tax proposals to result in loss of Rs 5,000 crore.
>Rs 500 crore for corpus fund to subsidise all women Self Help Groups for LIC cover for permanent disability.
>Agricultural loans given by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and due for December 31 that year will be covered under the waiver scheme to address the problem of indebtedness.
>No change in corporate income tax.
>To protect tigers, Rs 50 crore for National Tiger Conservation Programme. Bulk of it to be used to raise Tiger Protection Force.
>Plan expenditure fixed at Rs 2,43,000 crore and non plan expenditure at 5,74,000 crore.
>Fiscal deficit pegged at 3.1 per cent and revenue deficit at 1.4 per cent.
>Tax to GDP ratio increased from 9.2 per cent in 2004-05 to 12.5 per cent 2007-08.
>No change in peak rate of customs duty for non
>Customs duty on specified life saving drugs reduced from ten per cent to five per cent.
>Special Countervailing Duty on power imports.
>Customs duty on specified sports goods machinery down from 7.5 per cent to five per cent.
>Duty withdrawn on naptha for production of polymers.
>Duty on crude and unrefined sulphur reduced from five to 2 per cent to help raise domestic fertiliser production.
>General Centvat on all goods to be reduced from 16 per cent to 14 per cent. Excise duty reduced from 16 per cent to eight per cent on all pharmaceutical goods manufacture.
>Excise duty on small cars reduced to 12 per cent from 16 per cent and hybrid cars to 14 per cent.
>Excise duty reduced from 16 to 8 per cent on water purification items.

>Duty on non filter cigarettes to be raised.
>Asset management service under mutual funds, services by stock exchanges to be brought under Services Tax net.
>Threshold for small service providers raised from Rs eight lakh to Rs 10 lakh.
>Allocation for defence to be increased by 10 per cent from Rs 96,000 crore to Rs 1,05,600 crore.
>75 lakh people to be covered by health insurance scheme.
>Allocation for Textile Upgradation Fund to be more than doubled.
>Micro, small and medium enterprises to continue to get special attention.
>Risk Capital Fund to be set up in SIDBI.
>PAN requirement to be extended to all transactions in capital market subject to a threshold.
>Rs 750 crore for upgradation of 300 ITIs in 25 districts.
>Rs 32,676 crore as subsidy to Public Distribution System.
>PDS through smart cards in Haryana and Chandigarh on pilot basis.
>Three schemes to be introduced for providing social security to unorganised sector workers.
>Sixth central pay commission to submit report by March 31, 2008.
>Rs 624 crore allocated for Commonwealth Games
>Farmers' debt to be waived
>Complete waiver of loans for marginal farmers owning land up to one hectare and small farmers owning land up to 1 and 2 hectares.
>Agricultural loans given by scheduled commericial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and due for December 31 that year will be covered under the waiver scheme to address the problem of indebtedness.
>One time settlement of loans for other farmers.
>Agriculture loans restructured and rescheduled by banks from 2004-06 and other loans normally rescheduled under RBI guidelines will also be eligible under the waiver scheme.
>Implementation of debt waiver and debt relief will be completed by June 30 this year.
>Loan waiver scheme to involve loans liability of Rs 60,000 crore and to benefit four crore farmers.
>By loan waiver scheme, the country is discharging a deep debt and sense of gratitude to farmers, says Chidambaram.
>The corpus of rural infrastructure development fund to be raised to Rs 14,000 crore.
>More reforms needed in coal and electricity sectors to ensure double digit growth in manufacturing sector.
>Rs 800 crore for accelerated power reforms programme.
>National Fund for Transmission and Distribution Reforms to be launched.
>The loan waiver scheme will benefit three crore small and medium farmers and cover loans totalling Rs 50,000 crore.
>One crore other farmers will benefit to the tune of Rs 10,000 crore in the waiver.
>Foreign investment of 3.5 to 8 billion dollars expected for exploration and development of new oil blocks.
>Rs 7,200 crore to be allocated to the Ministry of Women and Child Development, marking an increase of 24 per cent.
>Rs 500 crore for corpus fund to subsidise all women Self Helf Groups for LIC cover for permanent disability.
>A target of Rs 2.80 lakh crore for agriculture credit set for the coming year.
>Rs 20,000 crore for irrigation projects under AIPB, showing an increase of Rs 9,000 crore over last year.
>National Horticulture Mission to be given Rs 1,100 crore in 2008-09 with special focus on coconut cultivation.
>Rs 75 crore to be given to Agriculture Ministry for providing mobile soil testing laboratories in 250 districts.
>Rs 644 crore for National Agriculture Insurance Scheme, which will be continued pending evolving an alternative crop insurance scheme.
>National Plant Protection Training Institute at Hyderabad to be made autonomous body and Rs.29 crore will be allocated to it.
>A scheme of debt waiver and relief for small and marginal farmers announced.
>NREGA scheme to be rolled out in all the 596 rural districts in the country in 2008-09.
>Jawaharlal Nehru Urban Renewal Mission to get Rs 6,865 crore this year against Rs 5,482 crore past year.
>Allocation for Rajiv Gandhi Drinking Water Mission to be increased to Rs 7,300 crore. Rs 200 crore for potable water in schools.
>Rs 300 crore to be set aside for desalination plant in Chennai for drinking water.
>Rs 500 crore for identifying urgent needs of development programmes of border areas like Arunachal Pradesh.
>SC, ST and minority students to continue to get special attention.
>Allocation for several schemes in North East raised from Rs 14,365 crore to Rs 16,400 crore.
>Rs 75 crore sanctioned for Rajiv Gandhi National Fellowship Programme for SC/ST students pursuing M.Phil.
>Rs 230 crore will be extended as additional equity to developmental organisations looking after the welfare of SC, ST, socially and economically backward classes and minorities.
>Allocation for Minority Affairs Ministry to be doubled from Rs 500 crore to Rs 1,000 crore.
>Rs 540 crore for multi-sectoral development plan for minority concentration districts.
>288 public sector bank branches to be opened in districts having minority community concentration.
>Sarva Shiksha Abhiyan will be provided Rs 13,100 crore, Mid Day Meal scheme Rs 8,000 crore, Secondary education Scheme Rs 4,554 crore.
>410 additional Kasturba Gandhi Vidyalaya to be set up in backward blocks.
>Navodaya Vidyalayas to be opened in 20 districts with special focus on regions having SC/ST concentration.
>Allocation of Rs 130 crore for this purpose. Rs.750 crore more to be given for merit scholarship to students up to 10th and 12th class.
>Mid day Meal scheme extended to upper primary level in 3479 schools. 16 central universities to be opened in 2008-09.
>Three IITs to be set up in Andhra Pradesh, Bihar and Rajasthan.
>Schools of architecture and planning in Bhopal and Vijaywada. More institutes of higher education to be opened.
>Rs 100 crore to be given to Information Technology Ministry to set up national knowledge centres.
>Allocation for NRHM increased to Rs 12,050 crore
>Rs 992 crore for national AIDS programme.
>A national programme for the elderly to be started at a cost of Rs. 400 crore.
>Rashtra Swasthya Beema Yojana to start from April one in Delhi and Haryana. Rs 30,000 for each family belonging to unorganised sector.
>Allocation for ICDS increased to Rs 6300 crore.
>Rs 85 crore sanctioned for scholarships to students pursuing science education.
>Indian Institutes of Science Education and Research to be set up at Bhopal and Thiruvananthapuram.
>Agriculture credit doubled in the first two years of the government to reach Rs.2.40 lakh crore by March 2008.
>Eleventh Plan started on a robust growth.
>Gross budgetary support to be raised to Rs 2,43,386 crore, an increase of more than Rs 38,000 crore from the current level.
>Allocation for Bharat Nirman to be raised to Rs 31,280 crore.
>Twenty per cent hike in education budget this year from Rs 28,674 crore to Rs 34,400 crore.
>GDP growth slows down to 8.4 per cent during quarter ended December 31, 2007 as compared to 9.1 per cent a year ago.
>Economy grew over eight per cent over 12 successive quarters since 2005, says Finance Minister P Chidambaram.
>Growth rate of agricultre extimated at 2.6 per cent during the current year.
>Services and manufacturing sectors expected to grow by 10.7 per cent and 9.4 per cent, says Chidambaram.
>Keeping inflation under check is one of the cornerstones of the Government's policy.
>Rice production estimiated at 94.08 million tonnes, maize 16.78 mt, soyabean 9.45 mt and cotton 23.38 million bales.