Highlights Of Union Budget Of India 2006-2007

HIGHLIGHTS OF UNION BUDGET OF INDIA 20062007

Presented By : Mehak Oberoi Nirmal Maloo Prasanjit Goswami Rashi Jain Sushma Pareek

INDEX Significance of Budget  What is Union Budget?  Main components of Indian Budget  Important Factors of Budget  Budget Estimates 2006-07  Effect on Various Sectors of Indian Economy  Tax Proposal 

SIGNIFICANCE OF PERSONAL BUDGET Controls your money  What you are spending  Where you are spending  Frees up money for you  Helps you get out of debt  Improves the quality of life 

UNION BUDGET INCLUDES The expenditure & revenue of every year  Capital receipts from within India or from foreign governments and multilateral organizations  Plan and non-plan expenditure  Policy announcements  Short-term and long-term effects on finances (Taxes) 

Receipts

Revenue Receipt

Corporation Tax, Income Tax, Wealth Tax, Customs, Service Tax

Capital Receipts

Market Loans, Long Term Borrowings State Provident Funds

BUDGET ESTIMATES 2006-07

Plan Expenditure: up by 20.4%.  Non-Plan Expenditure: up by 5.5%  Revenue Deficit: 2.1% of the GDP.  Fiscal Deficit: 3.8% of the GDP. 

UNION BUDGET INCLUDES •

Developments in – – – – – – –

–

– –

Agriculture Farm credit, Irrigation, Transport, Railways, Subsidies, Banking system, Insurance, Agricultural Insurance, National Bank for Agriculture and Rural Development, Regional Rural Banks, Housing loans, Exclusive health insurance, Capital market, Urban and Rural Infrastructure Development, Industry, SMEs,

• • • • •

Central Public Sector Enterprises, Budgetary resources, Outstanding credit, Foreign Trade and Merchandise exports, Differential rate of interest.

BUDGET ESTIMATES 2006-07

Plan Expenditure: up by 20.4%.  Non-Plan Expenditure: up by 5.5%  Revenue Deficit: 2.1% of the GDP.  Fiscal Deficit: 3.8% of the GDP. 

EFFECT ON VARIOUS SECTORS OF INDIAN ECONOMY Agricultural development  Promoting employment  Increasing investment  Augmenting infrastructure  Flagship Programs 

AGRICULTURAL DEVELOPMENT Investments in Water resources - Larger share for irrigation management of lands. : Rs.4,500 crore  Increase Farm Credit – Employ new farmers in credit scheme : Rs.175,000 crore  Banks ordered to help Self-employed groups  Relief for farmers who took crop loans  New Horticulture Institutes : Rs.150 crore  National Insurance Scheme to continue 

PROMOTING EMPLOYMENT

Industry  Textiles

: Rs.535 crore  Food processing : Rs.1,000 crore  Petroleum  Service sector : Rs.830 crore.

Govt changes •

•

•

•

New developments & investments to be made in technology as jute, & fibre technology. : Rs.189 crore Institutes to be setup which will enhance investments through banks Task force is setup to setup new units in the industry, three new regions would be established. Tourism, small scale industries and handicraft industries to be recognized that would increase foreign trade share in exports.

INCREASING INVESTMENT Equity support to central PSE : Rs.16,901 crore  Net capital support to banking sector : Rs.22,808 crore  New bill on insurance  Limit on FII raised to $ 2 billion & corporate investments increased to $ 1.5 billion  Ceiling on aggregate investments on mutual funds to be raised to $ 2 billion 

AUGMENTING INFRASTRUCTURE Telecommunication: to reach 250 million connections allocated Rs.1,500 crore  Power: five ultra mega power projects of 4,000 MW  Petroleum: investment of Rs.22,000 crore  Transport: Approval of new Road development projects : Rs.9,945 crore 

FLAGSHIP PROGRAMS  Sarva

Shiksha Abhiyan : Rs.10,041

crore  National rural Health Mission : Rs.8,207 crore  Integrated Child Development Services : Rs.4,087 crore  National rural Employment Guarantee Scheme : Rs.3000 crore  Jawaharlal Nehru National Urban Renewal Mission : Rs.4,595 crore  National Social Assistance Programme

TAX PROPOSAL Direct  Indirect 

DIRECT TAX •

• • •

• • •

Personal income tax and Corporate income tax Long-term capital gains Contribution of certain pension Open-ended and close-ended equity-oriented schemes Cooperative banks are excluded. Donations to wholly charitable institutions Fringe Benefit Tax (FBT)

INDIRECT TAX Customs  Excise  Service Tax  VAT and CST 

INDIRECT TAX  Customs

Non-agricultural products peak rate reduced to 12.5% from 15%;  The duty on mineral products reduced to 5%.  Duty on ores and concentrates reduced to 2% from 5%.  On 10 anti-AIDS and 14 anti-cancer drugs customs duty has been reduced to 5%;  On packaging machines, duty reduced to 5% from 15%. 

INDIRECT TAX  Excise  Reduction

of excise duty on all man-made fibre yarn and filament yarn to 8% from 16%.  Duty on aerated drinks and small cars to be reduced to 16%.  Customised software and software packages to be fully exempted from excise duty but 8% duty to be imposed on packaged software sold over the counter.  To all LPG stoves, concessional rate of 8% to be extended.  Increase in excise duty on cigarettes by

INDIRECT TAX  Service  Service

Tax tax rate increased to 12% from

10%.  New services like ATM operations, maintenance and management, share transfer agents, sale of space or time, ship management, etc.  Leasing and hire purchase to be treated as loan transactions.  Proposal to set April 1, 2010 as the date for introducing Goods and Service Tax (GST).  VAT

and CST

 LPG

has been included in the list of 'declared goods' under the CST Act.

REVENUES

  A CLEAR CASE OF SOFTWARE PIRACY Microsoft Corporation, Washington, USA, is a leading manufacturer of software .  Microsoft gets all of its works registered in USA.  Microsoft is facing a problem of software piracy.  Products of Microsoft are sold by illegal methods of copying and counterfeiting.  Microsoft found one company,Deepak Raval and Company. o Used to sell pirated copies of the softwares of Microsoft. 

CONTINUED….. Microsoft filed a suit against the company in High Court on account of piracy.  Microsoft collected serious proofs against the company for confirment of infringement.  Microsoft sent a letter to Deepak Raval & Company.  Prayed for permanent injunction against the company.  The Court gave decision in favour of Microsoft. 

CONCLUSION 

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As Microsoft is a very large player in market of software and IT products, it has a major advantage of having all the products registered. In India the scenario seems to be quite different. This causes serious damage to our economy as all the pirated softwares are traded undercover and no taxes are paid to the government, so the government earnings are reduced to a very large extent. This would not let any new foreign investments in India and also the market here would remain backward. The individual spending on the software purchasing expense would be reduced and new technological developments can also get hindered.

THANK YOU!!!!