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Bharati Vidyapeeth s Institute of Management Studies & ResearchCBD Belapur, Navi Mumbai.

Finance Committee

Presents

BUDGET ANALYSIS2010-2011

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IN

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3 CHALLENGESOF INDIAN ECONOMY

1) To achieve 9% GDP Growth Rate and to findthe means to attain a Double Digit GrowthRate

2) To improve the overall economic growth bymaking development more inclusive

3) To overcome the weaknesses in Governmentsystems, structures and institutions at

different level of governance

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GDP GROWTH CHART

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WHAT LIES IN BUDGET???

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5 Point SomeoneTax payers

ConsumersBusiness

InvestorsEconomy

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BUDGET & TAX PAYERS

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TAX RATE CURRENT POST BUDGET

INCOME EXEMPTED 1,60,000 1,60,000

10% 1,60,001 3 ,00,000 1,60,001 5,00,000

20% 3 ,00,001 5,00,000 5,00,001 8,00,0003 0% 5,00,001 & above 8,00,001 & above

INDIVIDUALS FIGURES (In Rs.)

TAX RATE CURRENT POST BUDGETINCOME EXEMPTED 1,90,000 1,90,000

10% 1,90,001 3 ,00,000 1,90,001 5,00,000

20% 3 ,00,001 5,00,000 5,00,001 8,00,000

30% 5,00,001 & above 8,00,001 & above

WOMEN

TAX SLABS

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BUDGET & TAX PAYERS

Maximum tax savings of Rs 51,500 is possible for individuals earning

an income of Rs 8 lakhs

Investment in GovernmentInfrastructure Bonds up to Rs20 ,000 exempted from tax

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BUDGET & TAX PAYERS

Contribution of Rs 1 000 by theGovernment for the New Pension

Scheme

NPS: Annual record keeping cost of Rs 350. Transaction cost of Rs 1 0 per transaction

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BUDGET & TAX PAYERS

Raise in TDS Threshold Limits

Delayed deposit of TDS to attract18% p .a interest against 12% p .a

Introduction of Saral II form

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BUDGET & TAX PAYERS

Tax admin will be computerised

Contribution to Central

government health schemes upto Rs 2 0 ,000 exempted from tax

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BUDGET & CONSUMERS

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BUDGET & CONSUMERS

Increase in excise duty from 8% to10% over all classes of goods

including households & luxuries

Reduction in excise duty onmedicinal products

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BUDGET & CONSUMERS

Increase in price of Petrol & Diesel

Domestic air travel to cost more

Solar powered & electric cars toget cheaper

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BUDGET & BUSINESSSurcharge on Indian firms cut from 1 0%to 7 .5 %

Effective tax rate becomes 33 .22% from33 .99%

Minimum Alternative Tax increased to

18% from 1 5%Effective MAT rate becomes 19 .931%

Increase in deduction for R&D expenses

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BUDGET & INVESTORS

Reduction in surcharge to 7 .5 % is

also applicable on DividendDistribution Tax

Formation of Financial Stability &Development Council

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AUTOMOBILE

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AUTOMOBILEIndustry has recovered thanksto stimulus

No major impact of budget onthe industry

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AUTOMOBILEReduction in direct taxes wouldincrease the disposable income

Demand for automobiles expected to

increase

An ideal option to invest

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INFRASTRUCTURE

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INFRASTRUCTURE

Rs 6, 00 ,000 crores to be invested bythe government between 2 00 9 &

2014Higher allocation to have a positiveimpact

Infrastructure bonds made tax freeto the tune of Rs 2 0 ,000

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CONSUMER DURABLES

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CONSUMER DURABLES

200 9-1 0: 1 st 6 months saw amoderate growth

3 rd quarter: increase in demand by19%

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CONSUMER DURABLES

Impact of Budget:

Increase in disposable incomedue to change in tax slabs

Hike in excise duty to 1 0% tohave no impact on consumerdurables

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TELECOM

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TELECOM13 0 million new mobile subscribersin 2 00 8-2 00 9

Increase in MAT would have anegative impact on profitability

Duty on mobile instruments &chargers reduced .

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OIL & GAS

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OIL & GAS

Increase in customs duty acrosscrude oil and petroleum products

Therefore increase in prices of refinery product

Increase in price of petrol and dieselProposal to consider Kirit ParikhCommittee Report (LPG & fuel)

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BANKING & FINANCE

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BANKING & FINANCE

16% Credit growth in 2 00 9-1 0Expected to improve to 19% in 2 010-11

Budget impact:

200 9-1 0 : Tier I capital infusion was Rs12 00 crores

Current year allocation : Rs 16, 500

crores

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BANKING & FINANCETherefore, increase in holdings of government in public sector banks &

Increase liquidity in market

Private sector players and NBFCsmeeting eligibility criteria of RBIwould be granted banking licenses

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STEEL INDUSTRY

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STEEL INDUSTRY

High growth expected inInfrastructure and automobiles

Demand for steel expected toregister a growth rate of 11%

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STEEL INDUSTRYProfitability of steel companies isexpected to increase

2% hike in excise duty would nothave major impact

Increase in steel price: Rs 500 -750 per tonne

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AGRICULTURE

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AGRICULTUREFour strategies of Government

Enhancing Agricultural

productionReduction in wastage of produceCredit support to farmersThrust to food processing sector

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AGRICULTURE

Nutrient Based subsidy from April1, 2 010

Extension of Debt relief scheme forfarmers from 31 / 12 /0 9 to30/0 6 / 2010

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AGRICULTURE

Interest subventions increased to2% from 1%, there by reducingthe interest rate to 5%Tax relief for setting up cold

storage, warehouse & also forbuying refrigerated vans or trucks

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BUDGET & ECONOMY

Partial exit from stimulus PackageRoad map for reducing Public

DebtFocus on Infrastructure &Agriculture

Proposed implementation of DTC& GST from next year .

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BUDGET & ECONOMY

Focus on Fiscal Consolidation

Disinvest of PSUs3G License Auction

Ensuring availability of fundsfor private players

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Fiscal Deficit

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Fiscal Deficit

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CONCLUSIONHas this budget ignored the Aamaadmi???

Allocations under utilized

The budget has not considered anyconcrete steps in higher education &health sector

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CONCLUSION

The budget encourages savingsand also provides for ample

scope for disposable income

The budget aims at an overallreduction in Fiscal deficit

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FUTURE

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