India's Budget 2009: Sensex Drops 1000 Pts, No Commodity FBT Tax
Pranab Mukherjee presented India's Union Budget 2009, but the Indian stock markets are giving it a thumbs down and have tanked by more than 1000 points. This despite the 9% GDP growth rate Finance Minister Pranab Mukherjeer is projecting.
There is no cut back in Excise and Customs, however FBT and Commodity tax has been abolished and the personal income tax limit has been raised by INR 10,000 and INR 15,000 for senior citizens. MAT Minimum Alternate Tax has been hiked from 10% of the profits to 15% of the profits.
The government has set a target of INR 1120 Cr. from disinvestment of PSUs, but there is no roadmap for a long term disinvestment on the retail and housing finance fronts. There were expectations that the income tax exemption limit for a housing loan would be raised in this budget.
Infrastructure projects are critical for the growth of the country so the Finance Minister has set aside sufficient funds these.Stock markets had accounted for these changes in the economic policies up to July 6th, but now the stock markets are correcting.
Highlights of Indian Union Budget 2009 presented by Pranab Mukherjee:
- Public holding in PSUs to go up.
- Fringe Benefit Tax (FBT) removed.
- Personal Income Tax Surcharge removed.
- 15,800 Cr. Allotment for railways.
- STPI scheme extended for 1 year.
- INR 500 cr. for Mumbai's storm water drainage project.
- Government will create 1.2 crore jobs.
- National Gas Grid to facilitate flow of gas across the country.
- Agriculture credit st aside so that agriculture sector grows by 4%.
- 15% commission on DAVP ads and rate hike of 10% in print media extended for 6 more months.
- Petrolium pricing policy: 3/4 of Indian Oil requirements are imported. A committee to work out a system for petrolium pricing.
- New Tax System to be designed for voluntary compliance.
- Income tax limits have been hiked by INR 10k and INR 15k for Senior Citizens. The 10% surcharge has also been done away with.
Media Reports Indian Budget 2009
Promising to halve poverty by 2014 and add 1.2 crore jobs each year, Finance Minister Pranab Mukherjee presented India's budget for this fiscal that hikes income tax exemption limit and steps up allocations for welfare schemes and infrastructure
To ensure that infrastructure projects do not face financing difficulties arising from the current downturn, the government has decided that IIFCL will refinance 60 % of commercial bank loans for PPP projects in critical sectors over the next 15-18 months. The IIFCL and Banks are now in a position to support projects involving a total investment of Rs.100 thousand crore in infrastructure.