Interim Budget 2009 India

What to expect at Interim Budget 2009 India by Pranab Mukherjee


All efforts made to deliver on commitments
Sustained growth over 9% in last 4 years
Per capita income grew 7.4% during UPA regime
Gross domestic savings rate at 37.7%, gross cap formation at 14.2%
Tax-GDP ratio at 12.5% in 2007-08, close to fiscal correction target
Domestic investment rate over 39% in FY08
Growth drivers - agriculture, services, manufacturing, constructionOutlook for food grain production encouraging for coming year
Exports grew at annual average rate of 26.4% during last 4 years
Challenges related to capital inflows and global inflation
We have weathered the crisis, but no room for complacency
Moderate pass through of prices affected domestic inflation in '08
Dec industrial growth fell 2% (YoY)
Forecasts indicate that world economy may fare worse in 2009
India has been affected along with other slowing EM economies
GDP growth of 7.1% makes India second fastest growing economy
Fiscal pkgs announced provide tax relief to boost demand, spending
Have taken steps to encourage private investments in infra via PPP
Approved 37 infra projects worth Rs 70,000 cr between Aug 08-Jan 09
54 central infra proj of Rs 67700cr sent for final nod to PPP panel
Initiative for providing refinance to banks for long-term credit to proj
IIFCL can to raise Rs 10000 cr, nod for additional Rs 30000 cr
IIFCL to refinance 60% of the projects
Extension of export credit for labour intensive exports
FDI inflow of USD 23.3 billion during April-November 2008
Have relaxed fiscal responsibility & budget mgmt targets
May need to consider additional fiscal measures in next regular budget
Need to revert to fiscal consolidation at the earliest
Economic regulatory and oversight systems have to be more efficient
Attention given to agriculture sector, plan allocation up 300% in 4 yrs
Agri - govt implementing revival pkg in 25 states worth Rs 13500 cr
Agri - govt will continue to provide interest subvention for FY10
Farm debt waiver of Rs 65,300 cr covering 36 million homes
Govt to provide interest subsidy to farmers in FY10
Outlay on higher education up 900% in 11th 5-year plan
Annual ad-hoc grants have been increased by 50% (YoY)
Tax rates must fall during times of crisis
FY09 revised estimates of spending at Rs 9.9 lakh cr vs Rs 7.5 lakh cr
FY09 plan expenditure revised to Rs 2.8 lakh cr
Govt revises FY09 fertiliser subsidy to Rs 44863 cr
FY09 food subsidy revised to Rs 10960 cr
FY09 fiscal deficit seen at 6% of GDP vs estimate of 2.5%
FY09 revenue deficit at 4.4% of GDP vs est of 1%
FY10 spending seen at Rs 9.53 lakh cr
FY10 budgetary support seen at Rs 2.85 lakh cr
Rural jobs scheme to get Rs 30100 cr in fy10
JNNURM spending seen at Rs 11842 cr for fy10
Allocation of Rs 40900 cr for Bharat Nirman Scheme
Interest subvention for some export loans extended
Budget plan spending may have to be upped substantially post polls
Additional plan expenditure has to increase by 0.5-1% post polls
FY10 non-plan spend est at Rs 6.68 lk cr
Major subsidy spending for FY10 seen at Rs 95,500 cr
FY10 budget revenue deficit seen at 4%, fiscal deficit at 5.5%
FY10 gross tax revenue seen at Rs 6.71 lk cr
Interim Budget 2009: Allocation of Rs 8,000 cr for mid-day meal scheme
Interim Budget 2009: Rs 13,100 cr allocated for elementary education
Interest subvention for some export loans extended
Budget plan spending may have to be upped substantially post polls
Additional plan expenditure has to increase by 0.5-1% post polls
FY10 non-plan spend est at Rs 6.68 lakh cr
Major subsidy spending for FY10 seen at Rs 95,500 cr
FY10 budget revenue deficit seen at 4%, fiscal deficit at 5.5%
FY10 gross tax revenue seen at Rs 6.71 lakh cr
FY10 gross market borrowing seen at Rs 3.2-3.3 lakh cr
No tax changes in interim budget