2 min read.Updated: 17 Feb 2014, 06:18 PM ISTReuters
P. Chidambaram presented the interim budget for fiscal year 2014-15. Here are some key takeaways
New Delhi: Indian finance minister P. Chidambaram presented the interim budget, or vote on account, for fiscal year 2014-15 on Monday to cover expenditure until the government’s term ends in May. Here are some key takeaways:
GDP expansion in 2013-14 third and fourth quarters will be at least 5.2%
* Fiscal deficit seen at 4.6% of GDP in 2013-14
* Fiscal deficit projected at 4.1% of GDP in 2014-15
* Chidambaram says need to bring down fiscal deficit to 3% of GDP by 2016-17
CURRENT ACCOUNT DEFICIT
* Current account deficit for 2013-14 projected at $45 billion
* Forex reserves to rise by $15 billion by end of 2013-14
* No major change in tax rates
* Factory gate tax to be reduced to 10% from 12% on some capital goods, consumer durables
* Cut excise duty on small cars, two wheelers, commercial vehicles to 8% from 12%
* Recommends excise duty reductions on larger vehicles
* Restructure of factory gate tax rates for manufacturing of mobile handsets
* Gross market borrowing seen at ₹ 5.97 trillion in 2014-15
* Net market borrowing at ₹ 4.07 trillion
* Debt repayment in 2014-15 seen at ₹ 1.897 trillion
* Ways and means advances for 2014-15 estimated at ₹ 10,000 crore
* Target from stake sale in state-run firms for 2013-14 revised to ₹ 25,841 crore
* Target for 2014-15 at ₹ 56,925 crore
* Merchandise exports seen at $326 billion in 2013-14, up 6.3% year-on-year.
* Agriculture exports expected to touch $45 billion in 2013-14, up from $41 billion in 2012/13
* Plan expenditure for 2014-15 seen at ₹ 5.55 trillion, the same level as the previous fiscal year
* Non-plan spending estimated at about ₹ 12.08 trillion in 2014-15
* Total spending on food, fertilizers and fuel at 2.5 trillion rupees in 2014-15
* Food subsidy estimated at ₹ 1.15 trillion, fertilizer subsidy at ₹ 67,971 crore.
* Petroleum subsidy seen at ₹ 63,427 crore versus revised figure of ₹ 85,480 crore for 2013-14.
* Spending raised to ₹ 2.24 trillion in 2014-15, up 10% year-on-year
* Govt to provide ₹ 11,200 crore capital infusion in state-run banks in 2014-15
FINANCE MINISTER COMMENTS ON
“Manufacturing is the Achilles’ Heel of the Indian economy. The deceleration in investment in manufacturing is particularly worrying. Consequently, there is no uptick yet in manufacturing."
GROWTH IS RETURNING
“I was confident that the decline would be arrested and the growth cycle will turn in the second quarter. Madam, I believe I have been vindicated. Growth in Q2 of 2013-14 has been placed at 4.8% and growth for the whole year has been placed at 4.9%."
“I can confidently assert that the economy is more stable today than what it was two years ago. The fiscal deficit is declining, the current account deficit has been constrained, inflation has moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased and hundreds of projects have been unblocked."
NO POLICY PARALYSIS
“I reject the argument of policy paralysis. Just as there are business cycles, there is a cycle around the trend growth rate of an economy."
“I’m afraid we will not be able to spend the budgeted planned expenditure, but non-planned expenditure will exceed the budget by a small amount."