NEW DELHI (Reuters) - Finance Minister P. Chidambaram cut indirect taxes on cars and mobile phones in an effort to revive growth in an interim budget presented to parliament on Monday for the fiscal year 2014/15.
The government’s term ends in May and the measure was necessary to cover expenditure until a national election is completed and a new administration installed.
Chidambaram said India’s economy, the 11th largest in the world, had stabilised and was showing signs of turnaround. His speech was marred by protests over the proposed division of a southern state.
Full coverage of the interim budget: reut.rs/1nFHV3c
* GDP expansion in third and fourth quarters of 2013/14 estimated at 5.2 percent. Growth for the whole year expected at 4.9 percent.
* Fiscal deficit seen at 4.6 percent of GDP in 2013/14, below target of 4.8 percent.
* Fiscal deficit projected at 4.1 percent of GDP in 2014/15
* Says need to bring down the deficit to 3 percent of GDP by 2016/17
* Current account deficit for 2013/14 estimated at $45 billion from last fiscal year’s $88 billion.
* Forex reserves to rise by $15 billion by end of 2013/14
* Gross market borrowing for 2014/15 seen at 5.97 trillion rupees, net market borrowing at 4.57 trillion rupees.
* Government plans to buy back/switch bonds of 500 billion rupees in 2014/15.
* Ways and Means advances for 2014/15 estimated at 100 billion rupees
* Debt repayment in 2014/15 seen at 1.397 trillion rupees
* Interest payments seen rising to 4.27 trillion rupees in 2014/15 from a revised estimate of 3.8 trillion rupees for the current fiscal year.
* Target from stake sale in state run firms for 2013/14 revised to 258.41 billion rupees
* Target for 2014/15 increased to 569.25 billion rupees
* Plan expenditure for 2014/15 seen at 5.55 trillion rupees, the same level as the previous fiscal year
* Non plan spending estimated at about 12.08 trillion rupees in 2014/15
* Total spending on food, fertilisers and fuel at 2.5 trillion rupees in 2014/15
* Food subsidy estimated at 1.15 trillion rupees, fertiliser subsidy at 679.71 billion rupees. Petroleum subsidy seen at 634.27 billion rupees versus revised figure of 854.8 billion rupees for 2013/14.
* Spending raised to 2.24 trillion rupees in 2014/15, up 10 percent year on year.
* Merchandise exports seen at $326 billion in 2013/14, up 6.3 percent year on year.
* Agriculture exports expected to touch $45 billion in 2013/14, up from $41 billion in 2012/13
* No major change in tax rates
* Factory gate tax to be reduced to 10 percent from 12 percent on some capital goods, consumer durables
* Cut excise duty on small cars, two wheelers, commercial vehicles to 8 percent from 12 percent
* Recommends excise duty reductions on larger vehicles
* Restructure of factory gate tax for mobile handsets
* Govt to provide 112 billion rupees capital infusion in state run banks in 2014/15
* Propose to set up public debt management office to start5 work from 2014/15
Resurgence in exports, global economic revival and moderation in inflation point to better outlook for Indian economy in 2014/15.
“I can confidently assert that the economy is more stable today than what it was two years ago. The fiscal deficit is declining, the current account deficit has been constrained, inflation has moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased and hundreds of projects have been unblocked.”
India’s economy now the 11th largest in the world, he said.
Compiled by New Delhi and Mumbai bureau