Key Highlight of the Budget 2013-2014.

BUDGET: Finance Minister Chidambaram 

• Intend to keep speech simple, short
• Global crisis spared none
• Chidambaram: Intend to keep speech simple, short
• Not unaffected by what is happening in rest of world
• CSO estimate FY13 GDP at 5%
• Global econ growth slowed to 3.2% in FY12 from 3.9% FY11
• Challenge to achieve trend growth rate of 8%

China, Indonesia growing faster than India
• RBI estimated GDP growth at 5.5% FY13
• Final GDP growth rate would be lower than CSO, RBI view
• There is no reason for gloom or pessimism
• Only China to grow faster than India in FY14
• Average GDP growth of 8% in 11th Plan
• Growth is highest goal
• Achieving high growth not beyond our capacity
• No development, inclusiveness without high growth
• Can achieve faster growth rates as seen earlier
• Growth a necessary condition for development

• Current account gap is greater worry
• Econ space constraints on low saving, tight RBI policy
• Current acct deficit high on gold, coal imports
• Need to encourage foreign investment
• Need $75 bln to finance current acct gap over next 2 yrs
• Current acct deficit high on oil imports
• India doesn't have choice between FII and FDI
• Foreign investment is an imperative

• No choice but to encourage foreign investment
• Battle against inflation must be fought on all fronts
• Need to fight inflation on all fronts
• Food inflation is worrying
• Govt spend is both good, bad from inflation perspective
• Need to augment supply side to fight food inflation
• Oilseed, pulses supply-demand mismatch pushes up inflation
• No choice but to rationalise spending

• Govt expenditure boosts aggregate demand
• FY13 Plan spend too ambitious, non-Plan too conservative
• Efforts over last few months brought dn WPI inflation to 7%
• FY13 plan expenditure was too ambitious
• FY13 non-Plan expenditure too conservative
• Efforts in last few months brought dn Core inflation to 4.5%
• FY13 planned expenditure was too ambitious

• Govt expenditure boosts aggregate demand
• FY13 Plan spend too ambitious, non-Plan too conservative
• Efforts over last few months brought dn WPI inflation to 7%
• FY13 plan expenditure was too ambitious
• FY13 non-Plan expenditure too conservative
• Efforts in last few months brought dn Core inflation to 4.5%
• FY13 planned expenditure was too ambitious

• 12th Plan total expenditure revised to 14.31 trln rupees
• Faced with huge fiscal gap, no choice but curtail spend
• FY14 total spend pegged 16.65 trln rupees
• FY14 total Plan spend pegged 5.55 trln rupees
• FY14 plan spend seen 5.65325 tlrn rupees

 FY14 Budget aim to provide opportunity to youth
• FY14 plan spend 29.4% more than FY13 revised estimates
• To create opportunities for youth to get skills for jobs
• To allot 245.98 bln rupees to the tribal sub-plan
• Allocate 415.61 bln rupees for schedule cast sub-plan
• To allot 772.36 bln rupees to child budget FY14

To allot 772.36 bln rupees for child schemes in FY14
• Giving enough funds to programmes for women, children
• Allocate 415.61 bln rupees for Scheduled Castes sub-plan
• Gender budget allot 971.34 bln rupees FY14
• Allocate 35.11 bln rupees to minority affairs ministry
• Funds for the sub-funds cannot be diverted
• Allotment to minority ministry 35.11 bln rupees FY14
• To allot more 2 bln rupee to child, women welfare ministry

• To allot 47.27 bln rupees for medical training & research
• To allot 658.67 bln rupees to human resource ministry
• 212.39 bln rupees in FY14 for new national health mission
• Allocate 658.67 bln rupees to human resource department
• Allot 16.5 bln rupees to 6 AIIMS-like institutes
• FY14 for new national health mission allocation up 24%
• Allot 272.58 bln rupees to Sarva Shiksha mission

• To set up regulatory authority for road sector
• Road construction facing financial stress
• To allot 50 bln rupees to NABARD for warehouses FY14
• To set up regulatory body for road sector
• Revival of invest in manufacturing sector a key challenge
• 30 bln rupee road projects to be awarded in Apr-Sep

• Expect to raise 250 bln rupees via tax-free bonds FY13
• Pvt sector infra investment seen 47% in 12th plan
• To allow some institutions to issue tax-free bonds FY14
• To OK 500 bln rupee tax-free bonds in FY14
• To encourage infra debt funds to boost infra growth
• RIDF corpus to be raised to 200 bln rupees
• IIFCL, ADB to offer credit enhancement for infra cos
• Rural Infra Dev Fund corpus raised to 200 bln rupees

• Will improve communication of our policies to investors
• Doing business in India should seem mutually beneficial
• Infra debt funds to be encouraged
• 12th plan projects $1 trln for infra invest

• To introduce investment allowance for high value invest
• To introduce 15% investment allowance to attract invest
• Rajiv Gandhi Equity Savings Scheme to be liberalised

• To set up regulatory authority for road sector
• Road construction facing financial stress
• To allot 50 bln rupees to NABARD for warehouses FY14
• To set up regulatory body for road sector
• Revival of invest in manufacturing sector a key challenge
• 30 bln rupee road projects to be awarded in Apr-Sep

• Expect to raise 250 bln rupees via tax-free bonds FY13
• Pvt sector infra investment seen 47% in 12th plan
• To allow some institutions to issue tax-free bonds FY14
• To OK 500 bln rupee tax-free bonds in FY14
• To encourage infra debt funds to boost infra growth
• RIDF corpus to be raised to 200 bln rupees
• IIFCL, ADB to offer credit enhancement for infra cos
• Rural Infra Dev Fund corpus raised to 200 bln rupees

• 15% deduction for invest up to 1 bln rupee till FY15
• No custom duty for plant, machinery for semi-conductors
• Gross domestic savings down 6% in FY12
• Pvt sector remains main contributor to savings
• Additional tax sop for first time home owners
• Rajiv Gandhi equity plan invest cap up by 200,000 rupee
• Up to 2.5 mln rupee 1st home loan to get more tax cut
• Inflation indexed bonds to be introduced
• To launch inflation-indexed certificates

• 15% deduction for invest up to 1 bln rupee till FY15
• No custom duty for plant, machinery for semi-conductors
• Gross domestic savings down 6% in FY12
• Pvt sector remains main contributor to savings
• Additional tax sop for first time home owners
• Rajiv Gandhi equity plan invest cap up by 200,000 rupee
• Up to 2.5 mln rupee 1st home loan to get more tax cut
• Inflation indexed bonds to be introduced
• To launch inflation-indexed certificates

• To introduce inflation linked instruments
• Initial work on Chennai-Bengaluru corridor started
• Rajiv equity plan to be eased; to cover MF investments
• To set up 2 new ports at Andhra Pradesh, West Bengal
• To give Delhi-Mumbai corridor more funds if needed
• 2 ports at Andhra, W Bengal to add 100 mln tn capacity
• To have Bengaluru-Mumbai Industrial corridor
• Plan grid connecting waterways, roads, ports
• Delhi-Mumbai Industrial Project has made rapid progress
• Oil, gas policy to move to revenue sharing model
• Natural gas pricing policy to be reviewed

• Work on 2 new smart industrial cities will start FY14
• To announce policy on shale gas exploration
• Shale gas projects to be encouraged
• To move oil E&P pacts to profit sharing from production
• Must cut dependence on import of coal
• Must reduce dependence on imported coal
• 5 mtpa LNG terminal to be fully operational in FY14
• Coal imports seen at 185 mln tn by FY16
• Coal import estimated to rise to 185 mln tns FY17
• To cut dependence on coal import in medium-, long-term

• States must prepare plans immediately for discoms
• To double SIDBI's refinance capacity to 100 bln rupees
• Non-tax benefits to MSME for 3 yrs after moving higher
• Urge state govts to approve recast of electricity boards
• MSME benefits to stay 3 yrs post move to higher category

 To give 5 bln rupee to SIDBI for factoring loan guarantee
• Non-tax sop to MSME to stay 3 yr post move to higher class
• Textile tech upgrade scheme to get 24 bln rupees FY14
• 1.51 trln rupees for textile upgradation fund 12th Plan
• Allocates 500 mln rupees to set up apparel parks
• 960 mln rupees for interest subvention in textile FY14
• Loans at 6% rate for women textile entrepreneurs
• Assure support to commerce ministry to boost exports
• PSU bks well regulated, must be adequately capitalised
• To allot 140 bln rupees for capital infusion in PSU banks

• 140 bln rupees to PSU banks for recapitalisation FY14
• Will ensure PSU banks always meet Basel III norms
• Gave 125 bln rupees to PSU bks for recapitalisation FY13
• PSU banks assured all branches to have ATMs by Mar 2014
• Plan to set up exclusive bank for women

• To set up first women PSU Bank
• Plan council for intl competitiveness of fincl sector
• To provide 10 bln rupees initial capital for women's bk
• To allot 60 bln rupees for rural housing fund under NHB
• License to women bank by Oct 2013
• To provide 60 bln rupees for rural housing fund
• Allot 60 bln rupees to rural housing fund
• 20 bln rupee allocation to create urban housing fund
• NHB to set up urban housing fund
• Allocates 20 bln rupees to urban housing fund

 NHB to set up urban housing fund
• Allocates 20 bln rupees to urban housing fund
• KYC of banks sufficient for insurance policies
• Insurance cos can open Tier 2 city branch without IRDA nod
• Banking correspondence can sell micro-insurance pdts
• Towns with 10,000 people to have LIC, GIC offices
• No IRDA nod for insurance cos' branches in Tier II cities

• Banking correspondents can sell micro-insurance pdts
• 1.5 bln rupees for healthcare plan for elderly
• Bank KYC to be enough to secure insurance policy
• Scope of Rashtriya Swasthya Bima Yojana to be expanded
• EXTRA: Swaraj smiles, cheers exclusive bank for women
• Hope insurance, PFRDA bill will be passed in this session
• India capital mkt best regulated
• Health insurance plan to extend to rickshaw, taxi drivers

• National health insurance plan to extend to mine workers
• Risk-based approach to KYC from SEBI
• OK to FII to trade in exchange traded FX derivatives
• SEBI to ease norms for foreign portfolio investment
• Allow FIIs to use corporate bond income for margin need

• SMEs will be allowed to be listed without IPO
• FII status for investment less than 10% in a company
• FDI status for investment over 10% in a company
• Distributors can become members of exchanges' MF segment
• Stock exchanges to have dedicated debt segment
• MF distributors allowed to become stock exchange members
• Insurance, pension cos can directly trade in debt segment
• Exchanges can introduce dedicated debt segment
• ETFs will be eligible for pension, insurance investment

To provide 2.5 bln rupees for sports university at Patiala
• 1 bln rupee grant each to Aligarh, Banaras universities
• Allot 2.5 bln rupee to sports coaching institute over 3 yr
• Allocate 1 bln rupee grant to TISS, Guwahati
• Post offices to move to core banking solutions
• 294 more cities to be connected by FM radio
• To give 5.32 bln rupees for core banking at post offices
• 5.3 bln rupees to post offices for core banking solution

Home fin cos up more; 20 bln rupees for urban housing fund
• Wind energy sector deserves incentives
• Generation-based incentives for wind energy projects
• To allot 115 bln rupees for Backward Region Fund
• 115 bln rupees for backward regions grant fund FY14
• Viability gap funds to city bodies for energy from waste
• To allot 2.03 trln rupees as defence spend FY14

 FY14 defence allocation 2.03 trln rupees
• 867.4 bln rupees in FY14 for defence CAPEX
• To allot 62.7 bln rupees to science, technology ministry
• Allocate 39.83 bln rupees for high school education scheme
• Allot 62.75 bln rupees to ministry of science, tech
• 58.8 bln rupees for department of atomic energy
• To allot 56.15 bln rupees to Department of Space
• To set up national institute of sports coaching
• Grant 1 bln rupee each to four universities
• To expand pvt FM stations to 294 more cities

• TO auction 839 more radio channels in FY14

• FY13 fiscal deficit estimate revised to 5.2% of GDP
• FY14 revenue deficit projected at 3.3% of GDP
• Nava Bharat Ventures arm's 150 MW Andhra unit starts ops
• 3.9% revenue deficit in FY13
• FY13 revenue deficit revised at 3.9% of GDP
• Chidambaram starts announcing tax proposals
• FY14 revenue deficit aim 3.3%
• Nava Bharat Ventures arm's 150 MW Andhra unit starts ops
• To set up tax administration reform commission

 To provide 2.5 bln rupees for sports university at Patiala
• 1 bln rupee grant each to Aligarh, Banaras universities
• Allot 2.5 bln rupee to sports coaching institute over 3 yr
• Allocate 1 bln rupee grant to TISS, Guwahati
• Post offices to move to core banking solutions
• 294 more cities to be connected by FM radio
• To give 5.32 bln rupees for core banking at post offices
• 5.3 bln rupees to post offices for core banking solution

• Allot 10 bln rupees for women safety fund
• To set up Nirbhaiya fund for women security
• To give 10 bln rupees for Nirbhaya Fund
• Skilled, trained youth to give enormous boost to economy
• To give 10 bln rupees to skill development fund for youth
• Cities above 100,000 population to have pvt FM channels

• Made modest, cautious start for direct cash transfer Jan 1

• Direct cash transfer scheme covered 1.1 mln people so far
• FY14 Plan expenditure estimated 5.55 trln rupees
• FY14 non-Plan expenditure estimated 11.09 trln rupees
• FY14 plan spend seen 5.55 trln rupees
• 5.2% fiscal deficit in FY13
• FY14 fiscal deficit projected at 4.8% of GDP

• Little room to raise tax rates for more revenue
• room to raise taxes in constrained economy
• No case to revise either tax slabs or rates
• No case to revise direct tax rates, slabs
• No plan to revise direct tax rates
• Personal income tax slabs unchanged FY14
• Some relief to tax payers in 200,000-500,000 bracket

• Fisc consolidation can't be done only by spend cuts

• Tax credit of 2,000 rupees for income above 500,000 rupee
• 2,000 rupee tax credit to 200,000-500,000 rupees income
• Some relief for 200,00-500,000 rupees band tax payers
• 10% surcharge on taxable income above 10 mln rupees.