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PROF: B.V.RUDRAMURTHY.

M.COM, MFM, M-PHIL, CA INTER, PGDBA, PGDMM.

MP BIRLA INSTIUTE OF MANAGEMENT,

ASSOCIATE, BHARATIYA VIDYA BHAVAN.

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WHAT TYPE OF BUDGET IS IT?

CONTINUITY, CONSOLIDATION AND CONTAINMENT!!!

CONSERVATIVE AND PESIMISTIC BUDGET!!!

NO MEALS BUT ONLY BISCUTS!!!

NEITHER REFORMIST NOR POPULIST!!!

BUDGET DRIVEN BY POLITICS RATHER THAN REQUIREMENT!!!

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• “We need faster growth because, at our level of incomes, there can be no doubt that we must expand the production base of the economy if we want to provide broad based improvement in the material conditions of living of our population…….

• “But growth alone is not enough! If it does not provide a flow of benefits that is sufficiently wide spread. We therefore need a growth process that is much more inclusive…. And which also ensures access to essential services such as health and education for all sections of the community”.

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“FASTER AND MORE INCLUSIVE GROWTH”

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DIRECT TAXES

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DIRECT TAXES:

INCOME TAX EXEMPTION LIMIT HIKED BY Rs.10,000 TO ALL CATEGORIES.

EDUCATION CESS ON ALL TAXES HIKED FROM 2% TO 3%.

ESOP TO BE BROUGHT UNDER FRINGE BENEFIT TAX.

TAX ON DIVIDEND DISTRIBUTED BY COMPANY RAISED FROM 12.5% TO 15%.

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DIRECT TAXES CONTD:

TAX ON DIVIDEND DISTRIBUTION TAX BY MMMF’S RAISED FROM 15% TO 25%.

EXEMPTION LIMIT ON MEDICAL INSURANCE PREMIUM TO BE INCREASED TO MAXIMUM OF 15,000 AND 20,000 IN CASE OF SENIOR CITIZEN.

NO SURCHARGE ON INCOME TAX FOR FIRMS AND COMPANIES WITH A TAXABLE INCOME OF Rs.1CRORE OR LESS.

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DIRECT TAXES CONTD:

NO CHANGE IN CORPORATE TAX RATES.

CASH WITHDRALS BY CENTRAL AND STATE GOVT TO BE EXCLUDED FROM THE SCOPE OF BCTT; EXEMPTION LIMIT FOR INDIVIDUAL AND HUF TO BE RAISED TO RS.50,000.

LIMIT OF RS.50 LAKH PER INVESTOR PER YEAR WITH RESPECT TO SEC54EC.

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INDIRECT TAXES

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CUSTOM DUTY CUT FROM 12.5% TO 10%.

DUTY OF RS.300 PER METRIC TONNE TO BE LEVIED ON EXPORT OF IRON ORES AND CONCENTRATES.

DECREASE IN CUSTOM DUTY RATES FOR IMPORT OF MOST OF THE COMMODITIES LIKE PET FOOD, UMBRELLA, WATCH DIALS… ETC

CUSTOM DUTY

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REDUCTION IN ADVALOREM COMPONENT OF EXCISE DUTY ON PETROL AND DIESEL FROM 8% TO 6%.

BIO-DIESEL TO BE FULLY EXEMPT.

EXEMPTION LIMIT FOR SSI RAISED FROM RS.1CRORE TO RS.1.5 CRORES.

ENCOURAGEMENT TO FOOD PROCESSING SECTOR LIKE BISCUTS AND FOOD MIXES TO BE FULLY EXEMPT FROM DUTY IF RETAIL SALE PRICE DOESNOT EXCEED RS.50 PER KG.

EXCISE DUTY:

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EXCISE DUTY CONTD:

DIFFERENTIAL RATES FOR CEMENT.

REDUCTION IN THE RATE OF DUTY FROM RS.400 PER METRIC TONNE TO RS.350 ON CEMENT IF SOLD IN RETAIL AT NOT MORE THAN RS.190 PER BAG, ORELSE RATE OF RS.600 PER METRIC TONNE ON CEMENT THAT HAS HIGHER MRP.

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EXCISE DUTY CONTD:

SPECIFIC RATES OF DUTY ON CIGARETTES TO BE INCREASED BY 5% AND ON BIRIS FROM RS.7 TO RS.11 PER THOUSAND FOR NO MACHINE MADE AND RS.17 TO RS.24 PER THOUSAND FOR MACHINE MADE.

WITHDRAWL OF EXEMPTION FOR PAN MASALA CONTAINING TOBACCO.

REDUCTION IN DUTY ON UMBRELLAS AND PARTS OF FOOTWEAR FROM 16% TO 8%; PLYWOOD FROM 16% TO 8%.

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SERVICE TAX

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SERVICE TAX:

EXEMPTION LIMIT FOR SMALL SERVICE PROVIDERS TO BE RAISED FROM RS.4,00,000 TO RS.8,00,000.

SERVICE TAX TO COVER AREAS LIKE; SERVICES OUTSOURCED FOR MINING OF MINERALS, OIL OR GAS, RENTING OF IMMOVABLE PROPERTY FOR USE IN COMMERCE OR BUSINESS, ASSET MANAGEMENT SERVICES, DESIGN SERVICES AND SERVICES INVOLVED IN EXECUTION OF WORK CONTRACT (2%).

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AGRICULTURE:

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AGRICULTURE:

FARM CREDIT TARGET OF RS.2,25,000 CRORES FOR 2007-08.

AIM FOR 4% GROWTH RATE.

PROVISION OF CROP LOANS @ 2%.

IRRIGATION OUTLAY TO BE INCREASED FROM RS.7,121 CRORE TO RS.11,000 CRORE.

DIRECT FERTILIZER SUBSIDIES TO FARMERS.

RURAL INFRASTRUCTURE DEVELOPMENT FUND CORPUS TO BE INCREASED FROM 10,000 CRORE TO 12000 CRORE.

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AGRICULTURE:

SPECIAL FUND FOR COFFEE, RUBBER AND SPICES.

WEATHER BASED CROP INSURANCE SCHEME TO BE LAUNCHED ON A PILOT BASIS.

WATER HARVESTING: 100% SUBSIDY FOR SMALL FARMERS AND 50% FOR OTHERS.

NABARD TO ISSUE TAX FREE RURAL BONDS FOR RS.5,000 CRORES.

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EDUCATION

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EDUCATION:

1LAKH SCHOLARSHIPS FOR CLASS 9-12 STUDENTS TO CHECK DROPOUTS.

RS.750 CRORES FOR NATIONAL SCHOLARSHIP SCHEME.

INTEREST FREE LOANS FOR INDUSTRIAL TRAINING INSTITUTES.

5,00,000 CLASSROOMS TO BE ADDED.

2,00,000 TEACHERS TO BE APPOINTED.

RS.7,324 CRORE FOR MID DAY MEAL.

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MISCELLANEOUS

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MISCELLANEOUS:

CST RATES DOWN BY 1%.

DEFENCE ALLOCATION INCREASED TO RS.96,000 CRORE.

1,00,000 JOBS TO BE CREATED FOR PHYSICALLY CHALLENGED.

DEATH, DISABILITY INSURANCE COVER FOR RURAL LANDLESS HOUSEHOLDS THROUGH LIC.

RS.500 CRORE FOR COMMON WEALTH GAMES.

RS.969 CRORE FOR CONTROL OF HIV.

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THANK YOU

PROF: B.V.RUDRAMURTHY.M.COM, MFM, M-PHIL, CA INTER, PGDBA, PGDMM.MP BIRLA INSTIUTE OF MANAGEMENT,ASSOCIATE, BHARATIYA VIDYA BHAVAN.EMAIL: RUDRAMURTHY@MPBIM.COMPH: 9845620530.