Budget 2006

ECONOMY
* Savings up 21.9% of GDP
* FY05 GDP growth was 7.5%
* Having best of times and worst of times
* GDP growth likely to be 8.1% in 2006-07
* Govt has met first aim of high growth rate
* Growth is best antidote to poverty
* Govt determined to take country to 10% growth rate
FISC
* Gross capital formation up 30% in 2004-05
* Non-food credit growing over 25%
* Investment rate up from 25.3% in FY03 to 30.1% in FY05
* 1.727 trln rupee budget support for plan, up 20.4% in FY07
* 1.312-trln-rupee budget support for central plan
* FY07 budgetary support for North East 120.41 bln rupees
* Outcome Budget to be presented on Mar 17
* Provide 169.01 bln rupees equity support to central PSUs
* 1.227 trln rupees outlay in FY07 for public sector
* 100 bln rupees corpus for RIDF-XII in FY07
* Separate window for rural roads under RIDF
* To unwind special securities by converting to SLR papers
* Defense allocation raised to 890 bln rupees FY07
* To provide 30 bln rupees as VAT compensation to states
* States' revenue share up at 944 billion rupees FY07
* Tax-GDP ratio 10.5% in FY06 vs 9.8% yr ago
* FY06 fiscal deficit revised to 4.1% of GDP vs 4.3%
* FY06 revenue deficit revised to 2.6% of GDP vs 2.7%
* FY07 non-plan expenditure seen at 3.91 trln rupees
* FY07 fiscal deficit pegged at 3.8% of GDP
* FY07 total expenditure pegged at 5.639 trln rupees
AGRICULTURE
* Foodgrain output 209.3 mln tns, up 5 mln tns over last yr
* Farm credit to be raised to 1.75 trillion rupees in FY07
* Banks asked to add 5 mln more farmers to credit portfolio
* Interest subsidy of 200 bps for farm loans taken 05-06
* To provide 17 bln rupees for farmers' relief
* Short-term credit to farmers at 7%
* Special new NABARD credit line for self-help groups
* Central institute of Horticulture to be set up in Nagaland
* Food processing to be priority sector for bank credit
* NABARD to set up 10 bln rupee centre for food processing
INDUSTRY
* Manufacturing sector to grow at 9.4% in 2006-07
* Barring mining, all sectors performing satisfactorily
* Set up special purpose tea fund with 1-bln-rupee corpus
* National Fisheries Board to be constituted soon
* 5.35 bln rupees in FY07 for textile upgradation scheme
* Jute Technology Mission, National Jute Board to be set up
* Govt proposes Handloom Mark
* To develop 3 investment regions for oil sector in FY07
* 180 SSI items identified for de-reservation
* To recognise small, medium enterprises in services sector
* For cut in SSI credit guarantee fee to 1.5% vs 2.5%
INFRASTRUCTURE
* Highway schemes progressing at 4.4 km/day
* 5,083 MW capacity to be added in 2005-06
* 96% of Golden Quadrilateral will be completed by Jun
* 870,000 rural houses built under Bharat Nirman
* 71,182 villages got telephones under Bharat Nirman
* 870,000 rural houses built in Apr-Jan
* Budget support of 186.96 bln rupees for Bharat Nirman FY07
* Education allocation up in FY07 to 241.54 bln rupees
* Sarva Siksha Abhyan outlay for FY07 at 100.41 bln rupees
* FY07 mid-day meal allocation 48.13 bln rupees
* Rural employment to cost 117 bln rupees in FY07
* FY07 drinking water outlay 46.8 bln rupees vs 36.45 bln
* 143 bln rupee outlay in FY07 for Rural Employment Scheme
* 45.95 bln rupee outlay for National Urban Mission in FY07
* 20,000 water bodies to covered under renewal plan
* Indian Infrastructure Investment Co to be established
* Tourism ministry to develop 15 tourist centres
* Set up empowered ministers' group on cluster development
* FY07 allocation for tourist sector 8.30 bln rupees
* 15 bln rupees in FY07 to boost telephone connectivity
* To electrify 40,000 more villages in FY07
* 82 new power projects underway
* To electrify 40,000 more villages in FY07
* 4.75% rise in power generation so far; govt not happy
* 5.97 bln rupee for non-conventional energy resources FY07
* 99.45 bln rupees budget support for NHDP in FY07
* To build 1,000 Kms of access controlled expressways
* 7.35 bln rupees for development of sea ports in FY07
* 1,000 Kms of new expressways on BOT basis
* Defense allocation includes 374.58 bln rupees for capex
SECTORS
* Committed to strong, efficient public sector
* Expert body to look into gems, jewellery sector taxation
* 20 bln tn coal to be deblocked for power sector by 2012
* 45 coal blocks allocated for power, coal, steel sectors
* 220 bln rupee investment expected in refinery sector
* Introduce comprehensive bill on insurance in FY07
DEBT MARKETS
* Cap on FII in gilts raised to $2 bln
* Cap on FII investment in corp debt raised to $1.5 bln
* To remove 10% cap on overseas investment by mutual funds
* NDS-OM to be extended to some MFS, PFs, pension funds
* To create unified exchange traded mkt for corporate bonds
SOCIAL SECTOR
* To eliminate polio by December 2007
* Leprosy to be eliminated by December 2006
* 45.95 bln rupee outlay for National Urban Mission in FY07
* To raise old age pension to 200 rupees/mo vs 75 rupees
* Allocation for SC/STs raised 14.5% to 29.02 bln rupees
* 20,000 merit scholarships for minority students
* 164 mln rupees for National Minorities Development Corp
* To grant 1 bln rupees each to 3 universities
* New grants to Calcutta, Madras, Mumbai universities
* To allocate 970 mln rupees for upgrading ITIs in FY07
* 50 bln rupees for new fund under Panchayati Raj in FY07
* 13 bln rupees special aid to J&K for power reforms
EXTERNAL SECTOR
* FDI estimated at $4 bln till Nov 2005
* Confident of more FDI, especially in infrastructure
* To double world export share to 1.5% by FY09
CUSTOMS DUTY
* Non-farm imports customs peak rate cut to 12.5% from 15%
* Duty on alloy steel cut to 7.5% from 10%
* Customs on steel melting scrap raised to 5%
* Import duty on ores, concentrates cut to 2% from 5%
* BUDGET: Customs duty on inorganic chemicals cut to 10% from 15%
* Customs on steel melting scrap raised to 5%
* Import duty on ores, concentrates cut to 2% from 5%
* Customs on mineral products cut to 5% vs 15%
* Duty on catalysts cut to 7% from 7.5%
* Customs duty on anti-AIDS, anti-cancer drugs cut to 5%
* Customs on packaging machines cut to 5% vs 15%
* To impose countervailing duty of 4% on oil imports
* Customs duty on vanaspati raised to 18%
* Import duty on man-made fibre yarn cut to 8% vs 18%
EXCISE DUTY
* All excise rates to converge at CENVAT rate at 16%
* Excise duty on small cars cut to 16%
* Condensed milk, ice-creams exempted from excise duty
* 8% excise on packaged software in FY07
* Excise on idly, dose premixes cut to 16%
* Excise duty on aerated drinks cut to 16%
* Excise on glassware will be 16%
* DVD, Flash, Combo drives exempted from excise duty
* Duty on naphtha on plastics to be nil
* Petroleum pdts duty measures to be retail price neutral
* Excise duty on printing paper, ink cut to 12% from 16%
* Excise on cigarettes hiked by 5%
SERVICE TAX
* More services brought under service tax net
* Registrars, share transfer agents under service tax net
* Service tax to be extended to PR firms
* ATM operation, maintenance to come under service tax
* Services industry seen contributing 54% of GDP
* Service tax raised to 12% from 10%
* Apr 1, 2010 deadline for national level goods, svcs tax
DIRECT TAX
* No change in personal, corporate income tax rates
* Minimum Alternate Tax rate up to 10% from 7.5%
* To abolish 1/6 income tax norm
* MAT cos' credit period extended to 7 years
* Rate for STT increased by 25%
* Bank deposits of over 5 year under section 80C of IT Act
* 10,000 rupee ceiling on pension contribution removed
* Open, close-end equity MFs on par for div distribution tax
* PAN needed for more transactions
* To continue with cash withdrawal tax
* Hopes debate on FBT ends; FBT is justified
* Announce changes in computation of fringe benefit tax
* Lauds cash withdrawal tax role in curbing money laundering
* Retirement contribution cap of 100,000 rupees for FBT
* To issue statement of revenue foregone
* Include LPG under declared goods for CST
* States taxing LPG at high rates

* BUDGET: Direct tax proposals to yield 40 bln rupees more FY07