Sunday, May 2, 2010

Current Events-India

Interim budget: Huge allocation for flagship schemes

In many respects, the Interim Budget was more a statement

by the Government of its performance thus far and did not in

any material manner infuse any policy or fiscal changes. The

thrust was clearly on socially relevant sectors such as rural

development and agriculture. Infrastructure did find a

mention and the Finance Minister did touch upon some of the

financing aspects.

The United Progressive Alliance government announced a

massive allocation of Rs. 1,31,317 crore for its various flagship

programmes to spur the economy and benefit the common man

in the interim budget 2009-10 presented on March 16, 2009.

Presenting the interim budget for a vote-on-account for the

necessary government expenditure in the first four months of the

new fiscal, External Affairs Minister Pranab Mukherjee, who

holds charge of Finance, desisted from

announcing any sops as he did not have the

parliamentary mandate to "tweak" the rates.

"Constitutional propriety requires that new

government formulates the tax and

expenditure policies for 2009-10…

Therefore, I am presenting an interim

budget for the purpose of vote-on-account

to enable the government to meet

expenditure during the first four months of

the next financial year," he said.

Traditionally, a Vote-On-Account is a

sanction of Parliament for withdrawal of

money from the Consolidated Fund of India

to meet the government's expenses, typically for 2-4 months before a full Budget is presented.

Apart from this, the revised estimates of revenue and expenditure during the ongoing

financial year are also presented.

Highlights: Interim Budget 2009-10

No change in tax rates

Total expenditure estimated at Rs 9,53,231 crore

Plan expenditure estimated at Rs 2,85,149 crore.

Non-Plan expenditure pegged at Rs 6,68,082 crore.

Revenue expenditure at Rs 8,48,085 crore

Centre's net tax revenue pegged at Rs 5,00,096 crore

Revenue deficit 4% of GDP

Fiscal deficit at 5.5% of GDP

Major subsidies estimated at Rs 95,579 crore

Two per cent interest subsidy for exports extended till

Sept 2009 for employment oriented sector

Defence allocation at Rs 1,41,703 crore

Rs 30,100 crore allocated for rural employment scheme

Bharat Nirman allocated Rs 40,900 crore

Rs 12,070 crore for National Rural Health Mission

Rural drinking programme allocated Rs 7,400 crore

Rural sanitation programme gets Rs 1,200 crore


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