Monday, February 17, 2014

India's 2014/15 Interim Budget Highlights.

India's 2014/15 Interim Budget Highlights.
Finance Minister P. Chidambaram presented the interim budget for the fiscal year 2014/15 on Monday to cover expenditure until the government's term ends in May.
His speech was repeatedly disrupted by protests over the proposed division of Andhra Pradesh.

* GDP expansion in 2013/14 third and fourth quarters will be at least 5.2 percent

* Fiscal deficit projected at 4.1 percent of GDP in 2014/15
* Fiscal deficit seen at 4.6 percent of GDP in 2013/14
* Says need to bring down fiscal deficit to 3 percent of GDP by 2016/17

* Current account deficit for 2013/14 projected at $45 billion
* Forex reserves to rise by $15 billion by end of 2013/14

* Gross market borrowing seen at 5.97 trillion rupees in 2014/15
* Net market borrowing at 4.07 trillion rupees
* Debt repayment in 2014/15 seen at 1.897 trillion rupees
* Ways and Means advances for 2014/15 estimated at 100 billion rupees

* Target from stake sale in state run firms for 2013/14 revised to 258.41 billion rupees
* Target for 2014/15 at 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 rates for manufacturing of 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.
Our objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing, said Chidambaram. Manufacturing needed an immediate boost, he said.
I can confidently assert that the fiscal deficit is declining, the current account deficit is constrained, inflation is moderated; exchange rate is stable, he said.
India's economy now the 11th largest in the world, he said.

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