New Delhi: In a first such initiative, the 2008 Budget includes a statement on child-related schemes, on which the various arms of the government are spending a total of Rs33,434 crore. Welcoming the step, Enakshi Ganguly, national secretary, Haq: Centre for Child Rights, a Delhi-based child rights organization, said “it is good that the finance minister has finally recognized the need for budgeting for children. However, in the share of Budget for children in 2007-08, we see a fall of 1.23% in the Budget for Children over the allocations in 2006-07.” She also said in “several major schemes that have allocations for children are missing from the relevant statement 22 of the expenditure budget”.
India’s defence budget goes above Rs1 trillion for first time
New Delhi: India on Friday jacked up defence spending by 10% to $26.4 billion (Rs1.05 trillion), the steepest hike since independence, to fund a mammoth modernization programme.
Finance minister P. Chidambaram boosted expenditure for the fiscal year ending March 2009 from the previous allocation of $24 billion saying security was of paramount importance.
India plans to spend at least $30 billion until 2012 to modernize the military with an immediate purchase of 126 war jets costing $12 billion followed by ships, submarines, artillery and other hardware in coming years. Chidambaram set aside $12 billion for arms purchases during the current fiscal year after New Delhi promised the armed forces will not face funds shortages in the drive to upgrade material.
The 1.23-million-strong army, the world’s fourth largest, received $9 billion to help modernize mechanized divisions, artillery and air defence units.
For the fiscal year ended 31 March, India increased defence spending by 7.8%.
Software firms regret ending of STPI scheme
New Delhi:India’s software industry was disappointment that there was no mention of extending the Software Technology Parks of India (STPI) scheme beyond March 2009. “It (extension of the STPI scheme) would have been a shot in the arm for the industry,” Lakshmi Narayanan, vice-chairman, Cognizant Technology Solutions, said in a statement on Friday. Industry lobby Nasscom said any extension of the STPI scheme, or a variant of it, would have been good. “Benefits could be in the form of a change in the SEZ (special economic zone) rules to cover the tier II and tier III cities,” Nasscom president Som Mittal said in a phone interview.
-PTI/ Staff Writer
Naphtha exports seen down on new duty levy
New Delhi: India’s new 5% import tax on naphtha unveiled in Friday’s Budget is likely to drive petrochemical producers to step up domestic purchases, reducing exports from Asia’s fastest-growing supplier, market sources said.
The new tariff, which applies only to companies importing naphtha for use in polymer units, comes into immediate effect.
Currently, only two companies— Reliance Industries Ltd and Haldia Petrochemicals Ltd—are major naphtha importers for petrochemical plants, preferring to tap global markets rather than buy expensive domestic supplies.
In 2007, Reliance imported 3.5-4 million tonnes (mt) of naphtha for its petrochemical plants, while Haldia Petrochemicals shipped in around 1.3mt, the trader said.
Shares of Reliance, which also exports naphtha from its 660,000 barrels per day refinery at Jamnagar in Gujarat, fell 3.1%, outpacing a 1.38% fall in the benchmark Sensex.
“There will be slight impact on Reliance...but I think the step is more directed towards increasing naphtha off-take locally from state-run firms, who are exporting the product right now,” said Rohit Nagraj, analyst with Angel Broking Ltd.
Rs50 crore one-time grant for tiger authority
New Delhi: “The number 1,411 should ring the alarm bells,” is how finance minister P. Chidambaram voiced his concern over the depleting number of tigers in the country as he announced a special grant to save the animal.
“That is the number of tigers in India. The tiger is under grave threat. In order to redouble our effort to protect the tiger, I propose to make a one-time grant of Rs50 crore to the National Tiger Conservation Authority,” Chidambaram said in his Budget speech.
The bulk of the grant will be used to raise, arm and deploy a special Tiger Protection Force, he said.
The budgetary allocation for the ministry of environment and forests has been increased from Rs1,539 crore in 2007-08 to Rs1,707 crore in 2008-09 and the funding for the Project Tiger programme has been enhanced from Rs61.50 crore to Rs72 crore.
Boost to domestic convertible bond market
Mumbai: In what may catalyse the creation of a convertible bond market in India, finance minister P. Chidambaram announced that domestic convertible bonds may be ”traded separately” without their ”equity component.” Convertible bonds are quasi debt instruments that give the bondholder the option to convert the bond into stocks after a stipulated time period.
According to investment bankers who raise foreign currency convertible bonds for Indian corporations, they tap the overseas market to raise foreign currency at an attractive rate of interest.
The government’s new move will now encourage Indian corporations to raise money through convertible bond issues in the domestic market itself.
The move also works in favour of domestic mutual fund and insurance companies, who get another avenue to invest, bankers said.
National programme for elderly to be started
New Delhi: A national programme for the elderly with a plan outlay of Rs400 crore will be started in 2008-09, finance minister P. Chidambaram announced.
During the 11th Plan period, two National Institutes of Ageing, eight regional centres and a department for geriatric medical care in one medical college/ tertiary -level hospital in each state will also be established, he said while presenting the Budget.
Budget tax cuts provide fillip to TV services
Mumbai: The government’s proposal to exempt digital set-top boxes from customs duty is expected to give a fillip to firms that provide television services via the conditional access system and direct to home. The finance minister proposed to exempt from duty specified parts of set-top boxes in his 2008-09 budget speech on Friday.
“We were long waiting for such a change,” said Deepak Chandnani, chief executive officer of Wire and Wireless (India) Ltd.