Hello Friends, this is a quick reference to the budget presented by our Hon’ble FM on 28th February 2006

Peak import duty cut to 12.5% from 15%

STT hiked by 25% from existing levels

No change in personal, corporate income tax rates

Cess on domestic crude oil hiked by Rs 700/tn

Customs on PTA, DMT and & MEG cut to 10% from 15%

Condensed milk Ice-creams

Excise duty on small cars cut to 16% from 24%

No FBT on Superannuation Fund Ceiling per employee at Rs 1 lakh

No FBT on free samples to doctor No FBT on payment to brand ambassadors

Tours & Travel cut down to 5% vs 20% Lodging & Boarding cut to 5% vs 20%

Duty on inorganic chemicals cut to 10%

To widen the tax net Service tax on: ATMs, Share trasfer agents, PR firms

Service tax rate hiked 12% from 10%

Excise duty on instant food cut to 8% Aerated drinks excise duty cut to 16%

Excise duty on cigarettes raised by 5%

Countervailing duty of 4% on all imports of excisable goods

To levy countervailing duty of 4% on oil imports

Import duty on ores, concentrates cut to 2% from 5%

Plastics duty down to 5% from 10% Duties on refractories down to 7.5%

Customs duty on manmade fibres down to 10% from 15%

Duty on packaging machines down to 5% from 15%

Duty on Naphtha for plastics down to 0% Duty on mineral products reduced to 5%

Tourism plan spending at Rs 830 cr To develop 15 tourist centres

FY’07 non-plan expenditure estimated at Rs 3,91,263 cr

FY’06 revenue deficit at 2.6% vs estimated 2.7%

Removes cap for MFs on reciprocal foreign holding

To set up 3 investment regions for oil sector in FY’07

Tax-GDP ratio to go up to 11.2% from 10.5%

NDS, OM to be extended to some MFS, PFs and Pension Funds

To add about 40,000 MW capacity in 3 years

Record 34,000 MW to be added under 10th plan 82 projects to be completed in 1-2 years

Cap on FII investment in corp debt raised to $1.5 bn

FIIs investment limit Govt bonds raised to $2 bn

To remove 10% cap on overseas investment by Mutual Funds

To create unified exchange traded market for corporate bonds

20 bn tn coal to be deblocked for captive power projects till 2012

To set up investor protection fund

Non-tradable securities to be phased out

IIFCL has received first proposal for funds

To double world export share to 1.5% by FY’09

Indian Infrastructure Investment company to be established

Govt to provide electricity to 40,000 villages in FY’06

Rs 597 cr provided for non-conventional energy resources

50 handicraft villages to be identified for foreign tourists

Gross Budget Support for FY’07 up 20.4% at Rs 1,72,720 cr

NABARD to get Rs 1000 cr corpus for food processing

Food processing to be treated as priority sector

Food processing to be top priority sector for bank credit

Textile allocation increased by Rs 100 cr to Rs 535 cr

Services SMEs to be treated at part with manufacturing SMEs

EGoM to be set up for cluster development

Cluster model for manufacturing and industrial townships

Rs 100 cr fund to help tea growers

India has potential to become a gem and jewellery hub

FY’07 mid-day meal allocation at Rs 4813 cr

Spending on flagship plans at Rs 50,000 cr

To double farm loans in 3 years Short term credit to farmers at 7%

RIDF gets Rs 4000 cr for rural roads

Special new NABARD credit line for self help groups

Bulk of spending to go to 8 social sector programs

96% of the project to be completed by June 2006

Urban Renewal Mission gets a grant of Rs 4,595 cr

Outcome Budget to be presented on March 17

Policy changes will attract more FDI in infrastructure

Equity support to state companies at Rs 16,900 cr

To raise old age pension from Rs 75 per month to Rs 200 per month

Outlay for National Urban Mission in FY’07 at Rs 4595 cr

Educational allocation up 31.5% to Rs 24,115 cr

Rs.14, 300 cr to be spent on rural employment

National Rural Health Mission to get Rs 8207 cr

To consider taking Hyderabad Metro under the NURM plan

Budgetary provision North East up 9 times to Rs 18,696 cr

1.5 lakh teachers to be employed under Sarva Siksha Abhiyan To spend Rs 10,041 cr

Larger Budgetary support for Bharat Nirman project

Rs 944 cr grant given for irrigation in Bharat Nirman

Expects ‘continued buoyancy’ in capital formation

GDP growth likely to be 8.1% in 2006-07

FM says barring mining, all sectors are performing satisfactorily

To aim for 10% economic growth

Output of foodgrains likely to be 209.3 MT

Govt will fund disaster rehabilitation

CA Gautam Khetan

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