• By 2008-09, exports from India to grow by $150 billion.
• Automobile, Software, Telecom and Electronic sector benefited by FDI.
• CSO estimates GDP growth rate as 6.9% with manufacturing expected to grow at 8.9%
• Inflation brought down and business confidence restored. Inflation measured in terms of WPI stood at 5.01% on Feb 21 2005

FOOD ALLOCATION

• New Food Credit increased by 21.2% in 2004-05
• The National Food for work program to be converted into the National Rural Employment guarantee Scheme with an allocation of Rs 11000 crore.
• Antyodaya Anna Yojna will be extended to 2.5 Crore families.
• Mid Day Meal scheme to 11 Crore children covered.

FOR CHILDREN, RURAL HEALTH AND EDUCATION

• Integrated child development service (ICDS) scheme will be expanded with creation of 1,88,168 additional Anganwadi centres.
• Allocation under mid-day meal scheme will be increased from 1675 crore in 2004-05 to Rs 3010 Crore in 2005-06
• 'Prarambhik shiksha kosh' to be created for funding sarv shiksha abhiyaan with an allocation of Rs 7156 crore
• rajiv Gandhi national fellowship will be introduced for SC and ST students for pursuing M.Phil and PHD courses in some universities
• backward region grant with an allocation of Rs 5000 crore to be set up in 2005-06
• as a new measure for the development of SC and ST, the budget provides Rs. 6253 Crore.
• equity support for the national minorities development and finance corporation (NMDFC) to increase

ON EMPLOYMENT FRONT:

• In IT sector by 2009, 70 Lakhs Jobs to be created .
• Food Processing Industry to create 2.5 Lakhs Jobs every year.

AGRICULTURE

• For National Horticulture Mission, Rs.630 Crore allocated. National project for repair, renovation and restoration of water bodies to be launched in March 2005
• Agriculture credit of Rs 108500 crore will be disbursed in the current year and the credit flow will increase by 30% in next fiscal
• In Agriculture Market private and public investment to go up.
• National agriculture insurance scheme will continue for rabi and kharif 2005-06
• Micro finance development fund to be called micro finance development and equity fund with an increased sum of Rs 200 crore.
• Knowledge center to be set up in every village by 2007, Rs 1000 crore required,funding from RIDF
• For Agriculture research, National Fund to be created.
• For Plantation Sector expert committee to be set up for massive regeneration.
• Decenteralized procurement for Agriculture planned.

EDUCATION

• Education Allocation to be Rs.18336 Crore
• Additional grant of Rs 100 crore for making Indian Institute of Science, Banglore, a world class university.

UNDER BHARAT NIRMAN PLAN (which is for building infrastructure in rural India)

• Villages with 1000 population and above will be linked to Roads.
• For increasing investment in agriculture, Central Assistance to States to increase.
• Provision of Drinking Water for 74000 new villages proposed.
• Electricity connection to be given to 2.3 crore household
• For rest 66822 villages Telephone Lines to be created.
• Accelerated irrigation project reviewed and it is increased to Rs.20800 Crore in 2004-05 to Rs.40800 in 2005-06.

PROVISIONS FOR STATES UNDER SPECIAL CATEGORY

• Special Plan assistance for J&K to be provided
• Package of Rs 450 crore for highway development in Northeast announced
• For development of Bihar, for year 2005-10, allocation will be Rs. 7975 Crore.

MANUFACTURING SECTOR

• Launch of manufacturing competitiveness programme to help small and medium enterprises
• 108 Items under dereservation category
• For 67 ITIs development, Rs 1.6 Crore allocation
• Government will extend full support to IRDA for promoting Micro Insurance.
• Rs 435 crore allocated for Technology Upgradation Fund (TUF) in textiles sector
• introduction of 10% Capital subsidary Scheme in Textile Sector
• In Textile Sector, allocation of Rs.20000 Crore in 2004-05 increased to Rs.30000 Crore in 2005-06
• Rs.20 Lakh new weavers included in Life Insurance Scheme
• For sugar industry, NABARD to provide a financial package with a two year moratorium on principal and interest

OTHERS

• Interest rate of 2 percent points below the bank rate will be applicable to outstanding loans as on October 21, 2004
• Amendments to be made in Banking Regulation act 1949 to remove upper and lower bounds to the statutory liquidity ratio and to allow banking cos to issue preference share
• Amendments to be made in RBI Act, 1934, to remove limits of the CRR
• Under FSPV Scheme credit limit is Rs.10000 Crore.
• For making Mumbai Regional Finance Centre, Special Comittee establishment proposed.
• SCRA which was amended recently requires all corporates to be corporatized. One time exemption to Stamp Duty given.
• For Defense expenditure, allocation is Rs. 83000 Crore. provided in 2005-06 of which 3375 Crore is for Catipal Expenditure.
• Mechanism to be put in place for measuring development outcomes in the country.
• Central Govt. Subsides to be restructured.
• Gross Budgetary support for the plan in 2005-06 is Rs 172,500 crore which is 16.9% higher
• Support for central plan increased by 25.6%
• For Fiscal Correction, the R.E (2003-04) suggest revenue defict was 2.7% of GDP and Fiscal defict was 4.5% of GDP. This is to be brought down by 0.5% and 0.3% respectively in this Fiscal.
• For NCMP, additional sum of Rs 25000 crore proposed for next fiscal
• Total allocation for department of health and family welfare will up from Rs. 8420 to 10280 Crore in 2005-06.
• For child & women development Rs. 14379 Crore allocated

TAX PROPOSALS

CUSTOMS:
Reduction of peak rate for the non agricultural products from 20% to 15%

Reduction of customs duties on selected capital goods and parts to below 15%, to 105 in some cases and 55% in some others

• Reduction of duty on textile machinery and refrigerated vans from 20% to 10%
• Reduction in duties of 7 specified machinery used inleather and footwear industry from 20 to 5%
• On Lead, duty reduced to 5%. Duty on coal and high ash content will go down to 10%
• Credit for CVD eill be available against payment of excise duty
• IT Software to be exempt from CVD
• In Textile Sector, Duty on Polyester, Textile fibre, Garment Fabric reduced from 20% 15%.

EXCISE DUTY:

• Govt intends to bring most of the goods under CENVAT rate of 16% ; VAT implementation in full swing.
• AC, polyester filament yarn, tyres' duties reduced to 16%.
• Import duty on atmospheric drinking water generation reduced from 20% to 5%.
• No change in duties on cars and aerated drinks
• Excise duty on imitation jewelry down to 8%.
• Parts of Medical equipment reduced from 20% to 5%.
• Industrial Raw Materials custom duty reduced to 10%
• Increased duty rate on cigarette by about 10%, Bidis exempted.
• Customs duty on crude petroleum to be down to 5%
• On LPG and on subsidized kerosene, no custom duty.
• Surcharge of Re 1 per kg on tea, duty of Re 1 per kg on refined edible oil and Rs 1.25 per kg on vanaspati to be abolished
• For NHDP, increase in diesel and petrol cess by 50 paise.
• Duty on molasses to increase from 500 to 1000 Rs per MT
• To widen service tax net, but those whose gross turnover is less than 4 lakh per year will be exempt
• Service Tax Rate fixed at 10% for this fiscal
• Excise duty on Matches making industry dropped from 16% to 12%.
• Specific rate on cigarettes to be up by 10% a surcharge of 10% to be imposed on ad valorem duties of other tobacco products

DIRECT TAX

NEW INCOME TAX BRACKETS ARE AS UNDER

• upto 1 lakh - Nil
• 1 lakhs to 1.5 lakhs -10%
• 1.5 lakhs-2.5 lakhs -20%.
• 2.5 lakhs and above -30%.
• Under Income Tax, Threshold exemption limit incresed to 1.25 lakh for women and 1.5 lakh for senior citizens
• In addition to the above, consolidated limit of Rs.1 lakh for savings to be exempted which will be deducted before tax is calculated.
• Sectoral caps to be removed
• Exemption on Tax on interest earned by NRIs continued.
• Transport service by workers and canteen service in office will be outside tax.

CORPORATE TAX

• Corporate Income Tax rate for domestic companies will be 30% and additional surcharge of 10%.
• Initial depreciation rate increased to 20%, general deprecation rate 15%.
• Credit for MAT allowed.
• Withholding tax on technical services is also to be reduced to 10% from 20%
• Extension on terminal date on exemptions given for specific purposes from March 31,2005 to March 31, 2007
• No change in foreign companies tax rate.

SOME MORE TAX REFORMS

• 100% Tax Deduction for Science and industrial research institute.
• Deduction of profits of new undertakings in J&K
• Levy a tax of 0.1% on withdrawing Rs. 10000 more on a single day as an anti black money measure.
• Banks required reporting all deposits, which are exempt from TDS on interest. This is also viewed as a anti tax evasion measure
• A nominal increase from 0.015% to 0.02% in the rates of securities transaction tax for all categories of transactions
• Mobile telephone is to be removed from the criteria for filling income tax, instead, payment for electricity bill exceeding Rs 50000 a year to be included.