Budget proposal for 2008-09 on Zee Business
Mr. Speaker, Sir
It is my privilege to present the Budget for 2007-08.
In the year 2007-08, the biggest minus is that the growth rate of GDP has decreased 8.7 %, we are still back 10% with previous year GDP growth 9.6%.
Industry and services are the main driver of growth, and in this sector, too, grew at lower rates of 8.6 per cent and 10.6 per cent, though these were on the high corresponding last year’s levels of 10.6 per cent and 11.2 per cent, respectively.
On the other hand, part of the lower-than-expected growth was on account of agriculture, which expanded by just 2.6 %, as against the 3.8 per cent of 2006-07.
The encouraging indicator in the CSO data is gross fixed capital formation (GFCF). The latter, as a percentage of GDP at constant 1999-2000 prices, is estimated to have touched an all-time-high of 32.6 in 2007-08, compared to 30.6 in 2006-07, 29.2 in 2005-06. Even as a proportion of GDP at current prices, GDFC has gone up from 31 % in 2005-06 to 32.5 % in 2006-07 and 34.6 % in 2007-08.
To help step up growth, I would like to emphasize in this proposal namely, agriculture and rural development, infrastructure, education, and girl childcare.
The health of agriculture is vital for sustaining our economic performance.
I propose to announce a new agricultural programme, costing Rs 40,000 crores in the XI Plan — the “BHARAT KRISHI KISHAN DARSHAN”. This agriculture programme will cover Ground water recharge, latest/advance agriculture technology, special training of farmer labor & farmer for agriculture backward areas.
Farm credit continues to grow at a satisfactory pace. I propose to fix a target of Rs.250,000 crore as farm credit and an addition of 50 lakh new farmers to the banking system.
The 2 % interest subvention scheme for short-term crop loans will continue in 2008-09, and I am making a provision of Rs.2, 000 crore for that purpose
The Agriculture Technology Management Agency (ATMA) that is now in place in 300 districts will be extended to another 500 districts in 2008-09. I propose to enhance the provision for ATMA from Rs.230 crore to Rs.450 crore next year.
National Bank for Agriculture and Rural Development: To augment its resources for refinancing rural credit cooperatives, NABARD to issue Government guaranteed rural bonds to the extent of Rs.5,000 crore with suitable tax exemption.
I propose to raise the corpus of Rural Infrastructure Development Fund (RIDF) in 2008-09 to Rs.16,000 crore. I would urge State Governments to use these funds primarily in the distressed districts of the State. I also propose to continue the separate window under RIDF-XIII in 2007-08 with a corpus of Rs.8,000 crore.
Electricity generation has recorded a growth rate of 7.5 per cent in April-December this year. However, as we complete the Tenth Plan, we would have added only 23,163 MW of additional capacity in the five year period including 16,339 MW added in the three years beginning 2004-05. Hence, it is imperative that we take new initiatives.
I propose to award two Ultra Mega Power Projects (UMPP) in Sasan and Mundra. Seven more UMPPs are under process and we are confident that at least two more will be awarded by July, 2007. Other initiatives taken by the Ministry of Power include facilitating setting up of merchant power plants by private developers and private participation in transmission projects.
I am happy to propose the share of expenditure on education in the central Gross Budgetary Support 22% in the current 11th plan.
To promote the Private/Public participation in elementary and secondary education, I propose to provide interest free loan up to Rs. 10 lacs.
I propose to at least one top class school in each block level. This kind of top class school will have the facility of excellence teacher training support.
To improve the quality of elementary and secondary education, I propose to teacher student ratio system, and in this system 1 teacher will be on each 25 students. To initiate this system, central government will have the provision of Rs. 15,000 crore in the current plan.
On the eve of budget plan; I propose to launch a programme for Girl child — “Girl Child Insurance Plan”. In this plan, the central government will bear 50% of the premium of Rs. 300 per year per girl child and I would urge to State government to come forward to bear the balance 50% on behalf of the Girl child. I propose to plan a sum of Rs. 800 crore in fund that will be managed by LIC. I also propose to formulate the plan in consultation with state government.
Besides, the Accelerated Power Development and Reforms Project (APDRP) has reduced significantly Aggregate Technical and Commercial (ATC) losses in 213 towns. APDRP is being restructured to cover all district headquarters and towns with a population of more than 50,000. I propose to increase the budgetary support for APDRP from Rs.650 crore in 2006-07 to Rs.800 crore next year.
Having regard to the pace of implementation under the Rajiv Gandhi Grameen Vidyutikaran Yojana and the annual target, I propose to increase the allocation from Rs.3,983 crore in 2007-08 to Rs.4,750 crore in 2008-09.
Following the credit policy for small and medium enterprises (SME) announced in August 2005, outstanding credit to the SME sector increased from Rs.135,200 crore at end December 2005 to Rs.173,460 crore at end December 2006. While encouraging banks to lend more to the SME sector, I propose to ask banks to have regard to the credit rating acquired by an SME while fixing the interest rate.
I propose to increase the provision for building tourist infrastructure from Rs.520 crore in 2007-08 to Rs. 750 crore in 2008-09.
I propose that:
– The threshold limit of exemption in the case of all assessees be increased from Rs.110,000 to Rs. 150,000, thus giving every assessee a relief of Rs.4,000
– Consequently, in the case of a woman assessee, the threshold limit be increased from Rs.145,000 to Rs.175,000, giving her a relief of Rs.5,500;
– The threshold limit of exemption in the case of a senior citizen be increased from Rs.195,000 to Rs.250,000, giving him or her a relief of Rs.11,000; and
|Taxable income slab (Rs.)||General||Women||Senior Citizen|
|Up to 1,50,000||Nil||Nil||Nil|
|1,50,000 – 2,00,000||10%||10%(above 1,75,000)||Nil|
|2,00,001 – 2,50,000||20%||20%||Nil|
|2,50,001 — 10,00,000||30%||30%||30%|
** Surcharge of 10 % of the total tax liability should be applicable where the total income exceeds Rs 1,000,000.Presently all taxes in India are subject to an education cess, which is 3% of the total tax payable, and propose to increase education cess 3% to 4 %.
Presently all taxes in India are subject to an education cess, which is 3% of the total tax payable, and propose to increase education cess 3% to 4 %.
– The deduction in respect of medical insurance premium under section 80D be increased to a maximum of Rs.25,000 and, in the case of a senior citizen, a maximum of Rs.50,000.
Sir, with these words, I commend the Budget to the House.