Presenting the Interim Budget for 2014-15, he also provided service tax exemption for storage and warehousing of rice like it was done in case of paddy last year. Also, blood banks have been exempted from its purview.

Read More: Chidambaram rejects argument of policy paralysis
    
The 1 percent surcharge on 'super-rich' having income above Rs 1 crore in a year, and the 5 percent surcharge on corporates imposed last year, has been allowed to lapse with the Finance Minister saying, "In keeping with the conventions I do not propose to make any announcements regarding changes to the tax laws."

Read More: Road network jumps over 7-fold in 10 years
    
The Budget document does not give figures of the indirect tax concessions, which are valid up to June 30, 2014 and could be reviewed later. They will be notified later in the day. He justified the excise duty reliefs saying, "However, the current economic situation demands some interventions that cannot wait for the regular Budget. In particular, the manufacturing sector needs an immediate boost."

Read More: Power generation capacity doubles to 2.34 lakh MW
    
To encourage domestic production of mobile handsets, he restructured the excise duty for all categories fixing it at 6 percent with CENVAT credit or 1 percent without CENVAT credit. Customs duty structure on non-edible grade industrial oils and its fractions, fatty acids and fatty alcohols has been pegged at 7.5 percent to encourage to domestic production of soaps and oleo chemicals.

Read More: Fiscal deficit will be contained at 4.6 pc of GDP
    
Similarly, a concessional customs duty of 5 percent on capital goods imported by Bank Note Paper Mill India Pvt Ltd has been provided to encourage to indigenous production of security paper for printing currency notes.

Read More: Current account deficit to be USD 45 billion this year
    
Giving Budget estimates, the Minister said the current financial year will end on a satisfactory note with the fiscal deficit at 4.6 percent, below the redline of 4.8 percent, and the revenue deficit at 3.3 percent.

Read More: Food inflation still remains a worry
    
The fiscal deficit for 2014-15 has been pegged at 4.1 percent, which will be below the target of 4.2 percent set by the new fiscal consolidation path. Revenue deficit is estimated at 3 percent.
    
Plan expenditure for the coming fiscal has been fixed at Rs 555,322 crore, unchanged from current year, and non-Plan expenditure at Rs 12,07,892 crore, marginally higher than 2013-14.

Read More: Cars, SUVs, two-wheelers to cost less

Chidambaram said excise duty has been reduced from 12 to 10 percent on capital goods and consumer non-durables falling under Chapter 84 and 85 of the Schedule to the Central Excise Tariff Act.
    
Small cars, motorcycles, scooters and commercial vehicles will attract a lower excise duty of 8 percent from the current 12 percent, while SUVs will see a 6 percent reduction in duty from 30 to 24 percent. Large and middle segment cars will enjoy an excise duty of 24/20 percent, down from 27/24 percent.
    
Outlining a 10-point vision for the future, the Finance Minister said India must achieve the target of fiscal deficit of 3 percent of GDP by 2016-17 and remain below that level always. On Current Account Deficit, he said there is no room for any aversion for it since the country will run a CAD every year for some more years and it can be financed only by foreign investments - FDI, FII or ECBs or any other foreign inflow.
    
As part of the vision, he said a developing economy must accept that when the aim is high growth, there will be moderate level of inflation. "RBI must strike a balance between price stability and growth while formulating monetary policy," he said in his vision formula that included financial sector reforms, infrastructure, manufacturing, subsidies, urbanization, skill development and sharing responsibilities between states and Centre.
    
Expressing disappointment over not being able to introduce Goods and Services Tax (GST), he said, "I leave it to you to answer the question who blocked the GST when an agreement on the game-changing tax reform was around the corner?"
    
He said the DTC, which will serve for the next 20 years, is ready and intents to place in on the website for public discussion. "I appeal to all political parties to resolve to pass the GST laws and DTC in 2014-15," he said.

Key highlights

  • Fiscal deficit to be contained at 4.6 percent of GDP in 2013-14
  • CAD to be USD 45 billion in 2013-14
  • Foreign exchange reserves up by USD 15 billion
  • Foodgrain production estimated at 263 million tons in 2013-14
  • Agriculture credit to cross USD 45 billion against USD 41 billion in 2012-13
  • 296 projects worth Rs 6,60,000 crore cleared by Cabinet Committee on Investment by end January 2014
  • Merchandise export to grow by 6.8 percent to USD 326 billion
  • GDP growth rate in Q3 and Q4 of 2013-14 to be at least 5.2 percent
  • Power capacity rose to 234,600 MW in 10 years
  • Chidambaram rejects argument of policy paralysis
  • Expenditure on education risen from Rs 10,145 crore 10 years ago to Rs 79,251 crore this year
  • PSUs to achieve record capex of Rs 2,57,645 crore in 2013-14
  • 500 MW fast breeder nuclear reaction in Kalpakkam to be ready shortly
  • Seven nuclear power reactors under construction
  • National Solar Mission to undertake 4 ultra mega solar power projects in 2014-15
  • Rs 1,200 crore additional assistance to N-E states to be released before end of the year
  • Rs 1,000 crore grant for Nirbhaya Fund to be non-lapsable
  • Rs 3,370 crore to transferred to 2.1 crore LPG users
  • Non-plan expenditure to exceed by a small amount in 2013-14
  • Plan expenditure will be Rs 5,55,322 crore in 2014-15
  • Budgetary support to Railways increased from Rs 26,000 crore to Rs 29,000 crore 2014-15
  • Rs 2,46,397 crore allocated for food, fertilizer and fuel subsidy
  • Food subsidy will be Rs 1,15,000 crore for implementation of National Food Security Act
  • Defence allocation increased by 10 percent to Rs 2.24 lakh crore
  • Rs 500 crore estimated requirement for implementing one-rank-one-pay scheme for armed forces in 2014-15
  • Rs 6000 crore to rural housing fund
  • Rs 2000 crore for urban housing fund
  • Minority bank accounts have swelled to 43,53,000 by 2013-14 from 14,15,000 bank accounts 10 years ago
  • Rs 3711 crore for Minority Affairs
  • Housing and Urban Poverty Alleviation gets Rs 6000 crore
  • Social Justice Ministry gets Rs 6730 crore
  • Panchayati Raj Ministry Rs 7000 crore
  • Moratorium on interest on student loans to benefit 9 lakh borrowers
  • Public Debt Management Bill ready
  • Fiscal deficit target of 3 percent to be achieved by 2017
  • 140 million people lifted out of poverty in last 10 years
  • Revenue deficit estimated at 3 percent for current fiscal
  • Excise duty on small cars, motorcycles and SUVs reduced
  • Rs 100 crore scheme formulated to promote community radio stations
  • Excise duty on mobile handset to be 6 percent on CENVAT credit
  • Excise duty cut from 12 to 10 percent in capital goods sector
  • No changes in tax laws in interim budget

(JPN/Agencies)

Latest News  from Business News Desk