HIGHLIGHTS - 2010/11 budget presented to parliament

NEW DELHI Fri Feb 26, 2010 4:36pm IST

Finance Minister Pranab Mukherjee (C) waves as he leaves his office to present the federal budget 2010/11 in New Delhi February 26, 2010. REUTERS/Vijay Mathur

Finance Minister Pranab Mukherjee (C) waves as he leaves his office to present the federal budget 2010/11 in New Delhi February 26, 2010.

Credit: Reuters/Vijay Mathur

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NEW DELHI (Reuters) - Finance Minister Pranab Mukherjee presents his annual budget on Friday.

Following are the highlights of the budget:

BORROWING

* Gross market borrowing for 2010/11 seen at 4.57 trillion rupees ($98.9 billion), Forecast in Reuters poll was 4.61 trillion.

* Net market borrowing for 2010/11 seen at 3.45 trillion rupees.

FISCAL DEFICIT

* Fiscal deficit seen at 6.9 pct of GDP in 2009/10

* Fiscal deficit seen at 5.5 pct of GDP in 2010/11 (Reuters poll 5.6 pct)

* Fiscal deficit seen at 4.8 pct of GDP in 2011/12; 4.1 pct in 2012/13.

* Fiscal deficit seen at 3.81 trillion rupees in 2010/11; seen at 4.14 trillion rupees in 2009/10.

SPENDING

* Total expenditure in 2010/11 11.87 trillion rupees.

* 15 pct increase in plan expenditure in 2010/11

* 2009/10 revised estimate for tax collection 7.47 trillion rupees.

* Defence spending for 2010/11 at 1.47 trillion rupees.

* To invest 1.73 trillion rupees in infrastructure in 2010/11.

* Social sector spending at 1.38 trillion rupees for FY11.

* To provide 661 billion rupees for rural development.

REVENUE

* Total revenue receipts for 2010/11 seen at 6.82 trillion rupees.

* Revenue deficit seen at 4 pct of GDP in 2010/11

*Indirect tax proposals to result in net revenue gain of 435 billion rupees.

* Direct tax proposals to result in revenue loss of 260 billion rupees.

TAXES

* Federal excise duty on non petroleum products to go up to 10 pct from 8 pct

* Raises federal excise duty on petrol, diesel by 1 rupee per litre

* Government will be in a position to implement direct tax code from April 2011

* Aims to introduce Goods and Services Tax in April 2011

* Raises minimum alternate tax rate to 18 pct

* To impose clean energy levy of 50 rupees/tonne on coal, including imports

* Service tax rate kept unchanged at 10 pct

* Personal income tax slabs widened

SUBSIDIES

* Subsidy bill seen at 1.16 trillion rupees.

* Petroleum subsidy for 2010/11 seen at 31.08 billion rupees

* Fertiliser subsidy for 2010/11 seen at 499.8 billion rupees

* To provide government subsidy in cash instead of bonds for fertilisers, oil

* To provide 2 pct loan subsidy to farmers

STAKE SALES AND RADIO AIRWAVES AUCTION

* Estimates disinvestment proceeds of 400 bln rupees in 2010/11.

* Estimates 350 billion rupees in 2010/11 from 3G wireless radio spectrum auction.

CREDIT TO SECTORS

* 3.7 trillion rupees farm credit target for FY11.

* External commercial borrowing will be available for food storage industries

* India Infrastructure Finance Company Limited to lend 200 billion rupees by March 2011.

MUKHERJEE ON THE STATE OF ECONOMY

* Final FY10 GDP figure maybe higher than estimate of 7.2 pct

* Need to review public spending

* Government to simplify FDI policy

* Roadmap within six months to cut public debt

* To set up finance sector legislative reform commission

* "The Indian economy now, is in a far better position than it was a year ago."

* "The first challenge before us is to quickly revert to the high GDP growth path of 9 percent."

* "After successfully managing the effects of the global slowdown, we need to strengthen the domestic macroeconomic environment to help consolidate the rebound in growth."

* "We need to reduce the stimulus, important to the economy, and move towards the preferred path of fiscal consolidation."

* "We need to make growth more broad based and ensure the supply demand imbalances are better managed."

(For full coverage of India Budget 2010, please click here)

(Compiled by Krittivas Mukherjee and Matthias Williams)

(For more news on Reuters Money visit www.reutersmoney.in)

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