Union Budget 2007-08 Highlights
The following are the Highlights of Indian Union Budget 2007-08
- No change in personal income tax rates but threshold limit of exemption in all cases incrased by rs. 10,000
- Excise duty on Pan Masala without tobacco as mouth freshners reduced from 66 % to 45 %.
- Water purification devices, small and big, fully exempted from excise.
- Specific rates of excise duty on cigarettes increased.
- Bio-diesel to be fully exempted from excise duty.
- Excise duty for plywood reduced from 16 % to 8%.
- Benefits of investment in venture capital funds confined to IT, bio-technology, nano-technology, seed research, dairy among some others.
- Dividend distribution tax raised from 12.5% to 15%. ESOPs to be brought under FBT.
- Expenditure on samples and free distribution items to be exempted from fringe benefit tax.
- Additional revenue from direct taxes to yield Rs.3000 cr and indirect taxes revenue neutral.
- Tax exemption on aviation turbine fuel sold to turbo prop aircraft extended to all small aircraft less than 40,000 kg.
- Tax free bonds to be issued by state-owned urban local bodies.
- Education cess on service tax now at 3%.
- Five year tax holiday for two, three, four star hotels and convention centres with a seating capacity of 3,000 in NCT of Delhi, Gurgaon, Ghaziabad, Faridabad and Gautam Buddha Nagar for Commonwealth Games as 20,000 more rooms required.
- Excise duty on cement reduced from Rs 400 per tonne to Rs 350 per tonne for cement bags sold at Rs 190 per bag at retail market. Those sold above Rs 190 will attract excise duty of Rs 600 per tonne.
- Two lakh people to benefit out of service tax exemption. Govt to lose Rs 800 crore as a result.
- Service tax on Residents Welfare Associations whose members contribute more than Rs 3,000.
- Export duty on iron ore and concentrate at the rate of Rs 300 per tonne. Export duty on Chromium proposed at Rs 2,000 tonne
- Small scale industries excise duty exemption raised from Rs 1 cr to Rs 1.5 cr.
- Ad valorem duty on petrol and diesel to be brought down from 8% to 6%.
- Income tax exemption increased: Upto Rs 110,000 for men, upto Rs 145,000 for women and upto Rs 195,000 for seniorr citizens.
- Duty on lift irrigation, agricultural sprinklers and food processing equipment reduced from 7.5 % to 5 %.
- Duty on sunflower oil to be reduced by 15 %.
- Import duty of 15 specified machinery to be reduced from 7.5 % to 5%.
- 3% import duty to be levied on private importers of aircraft including helicopters.
- Service tax: Small service providers exempt up to Rs 8 lakh.
- Total expenditure during 2006-07 estimated at Rs 6,80,521 cr including Rs 40,000 cr for SBI shares.
- Revenue deficit at Rs 72,478 crore which will be 1.5 %.
- Fiscal deficit for 2007-08 pegged at 3.3% of GDP at Rs 1,50,948 cr.
- Customs duty on polyster to be reduced from 10 % to 7.5 %.
- Duties on seconds and defective reduced from 20 to 10 %.
- Peak customs duty rate on non-agricultural items reduced from 12.5 to 10 %.
- All cooking coal fully exempted from duty.
- Increase in gross tax revenue by 19.9 %, 20 per cent and 27.8 % in first three years of UPA Government. Intend to keep tax rates moderate.
- Fiscal management enabled states consolidate debt to the tune of Rs 1,10,268 cr and 20 states availed of debt waiver to the tune of Rs 8575 cr.
- The share of states from the revenue expected to touch Rs 1,42,450 cr during 2007-08 as against Rs.1,20,377 cr during 2006-07.
- Total expenditure estimated at Rs 6,81,521 cr.
- VAT revenues increased by 24.3 % in the first nine months of 2006-07.
- Fiscal deficit to be 3.7 % in the current year and revenue deficit 2%.
- A national level goods and services tax to be introduced from next fiscal.
- Rs 100 cr for recognising excellence in the field of agricultural research.
- Rs 50 crore to be provided for the Commonwealth Youth Games in Pune.
- Rs 150 cr to be given to Ministry of Youth and Sports for Commonwealth Games and Rs 350 cr to the Delhi Government for the purpose.
- An Expert Committee to be set up to study the impact of climate change in India.
- Government will reimburse the EPF contributions of employers in the case of physically challenged people taken on rolls of the company and included in the PF scheme.
- A fund of Rs 150 crore to be started which will go up to Rs 450 crore for the physically challenged.
- Government to create one lakh jobs for physically challenged.
- Rs 50 crore provided to begin work on vocational education mission for which Task Force in Planning Commission is chalking out a strategy.
- 1,396 Indian Technical Institutes to be upgraded to achieve technical excellence.
- An autonomous Debt Management Office in government to be set up.
- A high-powered committee report aimed at making Mumbai a world class financial centre submitted. Public suggestions will be invited.
- 30% cut in duties on pet food.
- Backward Regions Grant Fund to be raised to Rs 5,800 cr.
- E-governance allocation to be increased from Rs 395 to Rs.719 cr.
- Mutual funds to set up Infrastructure Fund schemes.
- Indian investors to be allowed investment in overseas capital markets through mutual funds.
- 1% cut in Central Sales Tax.
- Regional Rural Banks to undertake aggressive branch expansion programme.
- One RRB branch for each of 80 districts so far uncovered.
- RRBs to accept NRE and FCNR deposits.
- Insurance companies to launch a senior citizens scheme in 2007-08.
- Impetus to rural credit will benefit fertiliser sector.
- The ceiling of loans for weaker sections under differential rate of interest scheme will be raised from Rs 6,500 to Rs 15,000 and in housing loan from Rs 5,000 to Rs 20,000.
- Regulations would be put in place for mortgage guarantee company for housing loans.
- Suggestion to use Foreign Exchange for infrastructural projects, to be inspected by the Govt and the RBI.
- 31% increase in Bharat Nirman to boost infrastructure companies.
- Agricultural investment to go up by 2% of the GDP
- Rs 100 cr allocated for National Rainfed Area Authority.
- Special Purpose Tea Fund to rejuvenate tea production.
- Farmers' credit likely to reach Rs 1,90,000 cr as against the targeted Rs 1,75,000 cr during 2006-07.
- SBI to get corpus to fund new scholarships.
- Special fund for rejuvenation of plantation crops.
- World Bank agreement with Tamil Nadu for revival of 5,763 waterbodies. Similar agreement with Andhra for recharging 2,000 waterbodies.
- Gender budgeting cells in 50 ministries.
- 100% subsidy for small farmers and 50% for other farmers for water recharging scheme.
- Fund for preparation of the groundwork for infrastructure projects to be set up
- Public-private model for infrastructure successful, but needs to be more agrressive.
- Death and disability cover for rural landless families to be introduced, known as 'Aam Aadmi Bima Yojana'.
- Bonds worth Rs 5,000 cr to augment NABARD to be issued.
- National Agricultural Insurance Scheme to be continued for Kharif and Rabi this year.
- SME sector lending growing fast. Banks must look into credit rating before fixing rate.
- Central public sector enterprises will be given Rs 16,261 cr as equity support and loans of over Rs 2,600 cr.
- 70 lakh households to be covered under a social welfare scheme with LIC and with support from state governments.
- Govt to acquire RBI holding in SBI. Govt must run Rs 40,000 cr provision for SBI buyout.
- Special housing project from National Hosuing Board for senior citizens.
- FDI inflows between April and January this fiscal touched $12.5 billion while portfolio investment reached $6.8 billion.
- Allocation for National Highway Development programme to be stepped up from Rs 9,955 cr to Rs 12,600 cr.
- Northeastern region will get Rs 405 crore for highway development Road-cum-rail project over Brahmaputra in Bogibil, Assam.
- Work on Golden Quadrilateral road project nearly complete.
- Textile Upgradation Fund raised to Rs 911 cr as against Rs 535 cr during 2006-07.
- Health insurance cover for weavers to be enlarged to ancillary industries. Allocation increased from Rs 241 cr to Rs 321 cr.
- PAN will be sole ID number for all market participants .
- A scheme for modernisation and technologiucal upgradation of choir industry for which Rs 23.55 cr has been earmarked.
- Rs 96,000 cr allocated for Defence. This includes capital expenditure of Rs 41,922 cr. Any requirement for security of the nation to be provided.
- Tourism infrastructure to get an allocation of Rs 520 cr as against Rs 423 cr last year.
- Rural landless families to get death/disability insurance cover.
- Increased allocation for Bharat Nirman Programme.
- No forward contracts in wheat and rice.
- One lakh scholarships to be awarded every year.
- Mid day meals for upper primary with an allocation of Rs 7,324 cr in backward blocks.
- 2 lakh more teachers to be employed and 5 lakh more classrooms to be constructed.
- Allocattion for education to be enhanced by 34.2%.
- Allocation on Healthcare to increase by 21.9 %.
- 15,054 villages have been covered under rural telephony.
- Secondary education allowance to be increased from Rs.1,837 cr to Rs.3,794 cr.
- Allocation under Rajiv Gandhi Drinking Mission stepped up from Rs 4,680 cr to Rs 5,850 cr.
- Annual target of 15 lakh houses under Bharat Nirmal Programme to be exceeded.
- Allocation for National Rural Health Mission stepped up from Rs 8,207 cr to Rs 9,947 cr.
- Allocating Rs 4,000 cr for rural roads.
- Rs 12,000 cr allocated to NREGA.
- Allocation for AIDS control programme to be raised to Rs 969 cr.
- Gross budgetary support in 2007-08 raised to Rs 2,05,100 cr from 1,72,728 crore in 2006-07.
- Allocation for ICDS programme to be increased from Rs 4087 cr to Rs 4761 cr.
- Women's development allocation will be Rs 22,282 cr.
- Allocation for SC/ST scholarships enhanced from Rs 440 cr to Rs.611 cr.
- Scholarships programme for minorities students to be of the order of Rs 72 cr for pre-metric, Rs 48 cr for graduate and postgraduate students.
- Total Budget for the Northeastern region raised from Rs 12,041 cr to Rs 14,365 cr.
- Rs 7,000 cr allocation for better tax administration to be used for social schemes.
- Rs 2,25,000 cr farm credit proposed in the new budget.
- Education allocation hiked by 34 %.
- Allocation for schemes only for SCs and STs to be increased to Rs 3,271 cr.
- Rs 63 cr for share capital for National Minorities Development Finance Corporation following Sachar Committee recommendations.
- Rs 800 crore for Sampoorna Gram Rozgar Yojana in districts not covered by NREGA.
- Swarna Jayanti Swarozgar Yojana allocation increased from Rs 250 cr to Rs 344 cr.
