Finance Minister Jaswant Singh on Friday announced a slew of relief to various sections of society in the Budget 2003-04, raising the standard deduction from Rs 20,000 to Rs 30,000 and providing income tax exemption on educational expenses up to Rs 12,000.
Presenting his maiden Budget in the Lok Sabha, Singh also announced that the concessions on housing loans would continue.
The populist Budget, coming ahead of Assembly elections in various states, also offers a new health insurance for groups and reduced customs duties on various aids for the handicapped.
Under the Budget proposals, VRS payment up to Rs 5,00,000 will be exempted from income tax. Among the major proposals are tax rebate to senior citizens, which has been increased to Rs 20,000, while leave travel allowance is restored to government employees.
Life Insurance Corporation will launch a new pension scheme for senior citizens assuring nine per cent return.
The Budget proposes an additional 50 paise cess on diesel.
Interest rates on PPF and small savings are to go down by one per cent from March 1.
Customs duty on gold has been reduced from Rs 250 to Rs 100 per 10 gm.
The finance minister announced the launch of 48 new road projects to cover 10,000 km. Private airports are to be set up at Mumbai, Hyderabad, Bangalore and Delhi. The Budget extends all concessions, currently available only to mega power projects with generation capacity above 1,000 mw, to all power projects.
Customs and excise duty exemption will be provided to water supply machinery and equipment.
In order to reduce the interest burden on states, the Centre proposes to allow swapping of their high cost loans, which will benefit the states to the extent of Rs 81,000 crore (Rs 810 billion).
In another step towards this end, the Centre would prepay high interest loans worth Rs 3e billion borrowed from the World Bank and Asian Development Bank.
In a bad news for farmers, the Budget proposes a hike in the issue price of urea. A 50 kg bag of urea would now cost Rs 12 more and DAP by Rs 10.
The finance minister reduced excise duty on knitted garments from 12 per cent to 10 per cent and reduced customs duty on textile machinery and equipment from 25 per cent to five per cent.
Excise duty on polyester filament yarn is to be reduced from 30 per cent to 24 per cent. Biotech units are to pay income tax on par with information technology units, which will continue to enjoy concessions under section 10A and 10B of the Income Tax.
The five per cent security surcharge on income tax is being scrapped.
The Centre has decided to hike foreign direct investment in private banking from 49 per cent to 74 per cent.
The Budget proposes to reduce customs duty on cut and polished diamond from 15 per cent to five per cent.
UNI