UNION BUDGET 2014-15 : HIGHLIGHTS OF INTERIM BUDGET !!!

India's Interim Budget or VOTE ON ACCOUNT....(Full Year Budget on JUNE -JULY 2014.)

GROSS DOMESTIC PRODUCT ESTIMATED TO GROW AT 4.9 %, +/- 0.5 % IN FY14 - 15. 

AT CURRENT PRICES THE ADVANCE GDP ESTIMATE OF 2013 - 14 IS ₹ Rs. 105,39,605 LAKHS CR AND AT 2004-05 PRICES ITS AT Rs. 57,48,564 LAKHS CR.

FY15 TOTAL SUBSIDES AT Rs. 2,46,397 CR.

FY15 FERTILIZER SUBSIDIES AT  Rs. 67,971 CR.

FY15 FOOD SUBSIDIES AT  Rs. 1,15,000 CR.

FY15 OIL & PETROL SUBSIDIES AT  Rs. 63,427 CR.

FY15 FISCAL DEFICIT AT Rs. 5,28,631 CR.

THE CENTER'S EXPENDITURE 2014 - 15 PROJECTED AT Rs. 17,63,214 Cr.

BUDGET AT GLANCE (₹. in Cr) - 2014-15
1) REVENUE RECEIPTS	11,67,131
2) Tax Revenue (net to Centre)	9,86,417
3) Non- Tax Revenue (net to Centre)	1,80,714
4) CAPITAL RECEIPTS (5+6+7)	5,96,083
5) Recoviers of Loans	10,527
6) Other Receipts	56,925
7) Borrowings & other liabilities	5,28,631
8) TOTAL RECEIPTS (1+4)	17,63,214
9) NON PLAN RECEIPTS	12,07,892
10) On Revenue account  of which	11,07,781
11) Interest Payments	4,27,011
12) On Capital Account	1,00,111
13) PLAN EXPENDITURE	5,55,322
14) On Revenue account	4,42,273
15) On Capital Account	1,13,049
16) PLAN EXPENDITURE (9+13)	17,63,214
17) Revenue Expenditure (10+14)	15,50,054
18) Of which Grants for creation of Capital Assets	1,46,581
19) Capital Expenditure (12+15)	2,13,160
20) REVENUE DEFICIT (17-1)	3,82,923
21) EFFECTIVE REVENUE DEFICIT (20-18)	2,36,342

22) FISCAL DEFICIT (16- (1+5+6))

5,28,631

23) PRIMARY DEFICIT (22-11)

1,01,620

SOME MORE POINTS FROM BUDGET:-

• No change in Income tax rates and slabs.
• Growth in Q3 and Q4 FY14 will be at least 5.2 %
• Fiscal Deficit to be contained at 4.6 %.
• Current Account Deficit will be contained at $45 million and can only be addressed by Foreign Investments.
• Core Inflation to be at 3 % but Food Inflation remains a Key worry.
• Agriculture GDP growth is expected at 4.6 % in current year.
• Exports have recovered sharply and is estimated at $ 326 billion in current fiscal.
• Gov to start 4 Ultra Mega Power Projects in FY15 and over 29,000 MW of power capacity to be added during the fiscal, there is a construction underway for 50,000 MW of conventional (thermal) Power.
• Two projects sanctioned under Nirbhaya Fund; orignal Rs. 1,000 Cr made non- lapsable; another Rs. 1000 Cr granted.
• There were 296 projects worth Rs. 6,60,000 Cr cleared by Cabinet Committee on investment by end of January 2014.
• Agriculture credit will cross $45 billion as against $41 billion in 2012-13.
• Food grain production estimated at $ 263 million tons in 2013-14.
• Foreign Exchange Reserves up by $ 15 billion.
• Over rs. 45,000 Cr allocated for scheduled caste sub-plan.
• Budgetary support to railway at Rs. 29,000 Cr in 2014-15.
• Plan Expenditure to be at Rs. 5,55,322 Cr in 2014-15.
• Non- Plan Expenditure in 2014-15 is estimated to be over Rs. 10 lakh Cr.
• Defence sector allocated Rs. 2.24 lakh Cr an increase of 10 % in the allocation inFY15.
• Govt approves 1 rank 1 pay for retired jawans.
• Proposes Rs. 11,200 Cr for Capital Infusion in Public Sector Banks.
• Budgetary support to railways raised to Rs. 29,000 Cr.
• All taxes on Eports to be waived for manufacturing sector.
• Community Radio to be promoted with Rs. 100 Cr.
• Excise duty on capital goods reduced from 12 % to 10 %.
• Cars to be cheaper as FM proposes to reduce excise duty on Automoblies. Excise duty on small cars.motorcycles reduced fom 12 % to 8 %.
• Excise duty onSUV's reduced to 24 % on large cars to 20 %.
• Excise duty for all mobiles phones to be 6 %.
• Saops, TV, Fridges to be cheaper now.
• Growth for next year should be 5 %.

India's Interim Budget or VOTE ON ACCOUNT..what it means ?

A national interim Budget refers to the budget of a government that is going through a transition period. These budgets are common in democracies where one political party or a coalition is voted out and another political party or a coalition is voted into office. The two governments often have different fiscal plans, so the old government budget is cut short and a new budget is created. The interim Budget helps span the transition time between the two governments so that the government can continue to function. Countries like India use the term interim Budget specifically to describe this period. A national interim Budget is created out of necessity. National governments require interim budgets to function in the months it takes for a new government to create its own budget plan.

A vote-on-account presents an estimate of expenditures to be sanctioned by the exchequer till the Budget is passed. The Budget announces new programmes and estimates the public expenditure for the fiscal year. A vote-on-account cannot alter direct taxes since they need to be passed through a finance bill. In the Budget, fresh taxes may be imposed, old ones may go. Direct taxes like income tax and indirect taxes are both open to change. The common feature is that both include the previous year's financial performance of the government.

The significance:

The government cannot present a full budget because in such a short session, there's no time to debate proposals in Parliament. Expenditure for new schemes will have to form part of the new budget, which can be approved only after April 1. Also, it is ideally the new government's prerogative to decide how it'll raise and spend money. The newly formed government cannot be burdened by the previous government's budgetary allocations. While these are the technicalities, many look upon the vote on account as election rhetoric. Many look at it as a window where the government highlights its achievements ahead of elections. Experts say voters reward you for what you did in the first four years rather than what you did in the last six months. Whether or not the government succeeds in wooing the voter, the fact is that India is battling an economic meltdown like 2009. The government will have to take steps to reboot the economy. What remains to be seen though is whether these steps will be a part of the vote-on-account.

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Best Regards,

BHAVIKK SHAH