Finance Minister tables Budget 2007

NEW DELHI: Venture capitalist funding in biotech, IT, nano technology, seed research, etc. will get 'pass-through' status, finance minister P Chidambaram on Wednesday proposed in the Union Budget 2007 in the Lok Sabha.

Fiscal deficit for 2007-`08 was pegged at 3.3 p.c. of GDP at Rs 1,50,948 cr.

In his budget speech, Chidambaram said the government proposes to increase the allocation for e-governence to Rs 719 crore from Rs  395 crore.  

The finance minister said the central government supports the e-governence initiatives of various state governments and included Rs 500 crore for this purpose, up from Rs 300 crore.

The budget also allocated Rs 33 crore for manpower development in software export industry.

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The minister also suggested the forex may be used for infrastructure development. The Reserve Bank of India and the government will examine this.

While he lauded the public-private model in infrastructure development, Chidambaram said it has  to be more aggressive.

The finance minister also proposed a 2 per cent reduction in ad valorem duty on petrol and diesel to 6 per cent from 8 per cent.

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Providers of content to telecos and ad agencies will have to pay service tax.

SMEs, which has taxable income of Rs 1 cr or less, will get exemption on surcharge, Chidambaram said.

More stories on Budget 2007

Tax exemption

The finance minister increased the income tax exemption: Upto Rs 110,000 for men, upto Rs 145,000 for women and upto Rs 195,000 for senior citizens. 

The budget has not changed the income tax limit. Threshold limit was raised by Rs 10,000 giving every assessee a relief of Rs 1,000. 

Industry wish list

HIGHLIGHTS

• Defence budget: Rs 96,000 cr for 2007-08
• 20,000 villages to get telephone connections 
• Additional allocation of Rs 7000 cr for urban infrastructure, rural development, healthcare
• Growth of 10 p.c. in GDP achiveable
• Service sector growth maintained
• Public-private model for infrastructure successful; needs to be aggressive
• Fund for preparation of the groundwork for infrastructure projects to be set up
• Per capita Income in 2006 increased by 74 p.c.
• Money supply in 2006 increased by 21 p.c.
• SME sector gets Rs 1,73,460 cr from Rs 1,35,200 cr
• Growth rate improves to 9.2 p.c. for FY07
• Average growth rate is 8.6 % for the last 3 years
• Bharat Nirman will get Rs 24,603 cr allocation from Rs 18,696 cr with a growth of 31.6 p.c.
• Allocation on education increased by 34.2 p.c.
• Average inflation at 5.2-5.4 p.c.
• Eleventh five yr plan targets 10 p.c. GDP growth
• 10th plan nearly achieved 8 p.c. growth in GDP
• Two lakh teachers to be appointed this year
• To add 5 lakh classrooms this year
• Forex reserves at $180 billion
• Government committed to fiscal reforms
• Computerisation of PDS and integrated computerisation programme for FCI
• Women's development allocation will be Rs 22,282 cr
• Allocation for SC/ST scholarships enhanced from Rs 440 cr to Rs.611 cr
• Total Budget for the Northeastern region raised from Rs 12,041 cr to Rs 14,365 cr
• New Industrial Policy for the northeastern region to be in place before March 31
• Rs 7,000 cr allocation for better tax administration to be used for social schemes
• Rs 2,25,000 cr farm credit proposed in the new budget
• A target of additional 50 lakh farmers to be brought under farm credit
• Education allocation hiked by 34 p.c.
• 130 more districts under NREGA
• Rs 4,000 cr for rural roads
• National means-cum-merit scholarship launched
• Agricultural focus to benefit rural income and FMCG companies
• Foreign exchange reserves stand at $180 billion
• Allocation under Rajiv Gandhi Drinking Mission stepped up from Rs 4,680 cr to Rs 5,850 cr
• Secondary education allowance to be increased from Rs.1,837 cr to Rs.3,794 cr
• One lakh scholarships to be awarded every year
• Govt confident of moderating inflation
• Revenues bouyant for third year in a row
• Saving rate estimated at 32.4 p.c.
• Manufacturing growth rate above 11 p.c.
• Rural infrastructure fund increased to 12,000 cr from 10,000 cr
• 26 parks for textile industry; gets Rs 425 cr from Rs 189 cr
• Technology upgradation increased to Rs 911 cr from Rs 532 cr
• Rs 22.5 cr for tech upgradation in coir industry
• E-gov allocation increased from Rs 395 cr to Rs 719 cr
• E-gov allocation for State initiatives increased to Rs 500 cr from Rs 300 cr
• Rs 33 cr allocated for manpower development in software export industry
• Forex may be used for infrastructure development
• India international development authority to be established
• One p.c. (from 4-3%) reduction in Central Sales Tax
• CST to be phased out
• Duty on 15 products related to pharma and biotech reduced to 5 p.c. from 7.5 p.c.
• Ad valorem duty on petrol and diesel slashed to 6 p.c. from 8 p.c
• Service tax for content providers for telecom industry and ad agencies
• Service unified levy for telecom
• New drugs clinical trials will get service tax exemption
• Tech inubators get service tax exepmtion 
• SMEs, which has taxable income of Rs 1 cr or less, will get exemption on surcharge
• Tax exemtion raised to Rs 1.95 lakh for senior citizens
• Divident tax increased from 12.5 p.c. to 15 p.c.
• ESOPS under fringe benefit tax
• Additional 1 p.c. for secondary and higher education
• Income tax exemption increased: Upto Rs 110,000 for men, upto Rs 145,000 for women and upto Rs 195,000 for senior citizens
• Income tax limit not to be changed. Threshold limit raised by Rs 10,000 giving every assessee a relief of Rs 1,000
• Education cess on service tax now at 3 p.c.
• Dividend distribution tax raised from 12.5 p.c. to 15 p.c.
• Additional revenue from direct taxes to yield Rs.3000 cr
• Service tax: Small service providers exempt up to Rs 8 lakh
• Revenue deficit at Rs 72,478 crore which will be 1.5 p.c.
• Fiscal deficit for 2007-08 pegged at 3.3 p.c. of GDP at Rs 1,50,948 cr

The budget came a day after the ruling front faced a debacle in assembly polls in Punjab and Uttarkhand, with many in the Congress as well as other constituents in the UPA blaming the finance minister for not checking the price hike, which led to the defeat.

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