Where the rupee will come, where the rupee will go

Borrowing at 29 paise will account for the largest share of every rupee that the government will use for financing the Union Budget 2010-11, while will it spend the most - 21 paise - on central plan.

Reflecting the improved finances, the dependence on debt has come down from 34 paisa in the previous budget to 29 now, as per the proposals presented by Finance Minister Pranab Mukherjee in Parliament.

On the expenditure side, apart from central plan, interest payment will account for an outgo of 19 paise. At the same time, defence allocation has also been reduced to 11 paise from 12 paise in the current fiscal.

As the single largest source of revenue income, the collection from corporate tax has been increased to 23 paise against 22 paise in the previous fiscal, indicating improvement in the tax revenue.

Improvement is also seen in indirect tax, including service tax and other heads, as it is expected to contribute 25 paise to every rupee earned in 2010-11 against 22 paise in the current fiscal.

Despite tax incentives given to individuals, direct tax contribution has been retained at 9 paise. With the improvement in overall economic scenario, the susidy burden on the government would come down to 9 paise against 10 paise for the year ending March 2010.
Other non-plan expenditure has also been reduced by seven per cent to 13 paise while the states' share of taxes and duties would take away 16 paise of every rupee earned compared to 14 paise in 2009-10.

On the earning side, the contribution of the non-tax revenue would decline 8.3 per cent to 11 paise to a rupee earned. However, there is going to be three-fold jump in the non- debt capital receipts.

As part of the indirect taxes, customs and excise would garner 19 paise, while service tax and other taxes would be 6 paise of every rupee earned. Of this, excise will contribute 10 paise compared to 9 paise projected for this fiscal as there has been partial roll back of tax concession to the industry.

At the same time, customs would also witness 12.5 per cent increase as some of the duty concession has been taken away. On the expenditure side, both plan and non-plan assistance to states and union territories have been retained at seven paise and four paise respectively.

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