Interim Budget 2014-15 was presented in the Lok Sabha by Union Finance Minister, P Chidambaram on 17 February 2014. This was the 83rd budget of the Union Government and 9th personal budget by Chidambaram as Finance Minister.
In the union budget, Chidambaram left direct taxes. The 2014-15 interim budget has implemented a surcharge of 10 percent on super-rich people (having income above 1 crore rupees in a year). Excise duty on cars, two-wheelers, SUVs and capital goods and consumer durables has been slashed to boost the manufacturing and growth. For storage and warehousing of rice, he exempted the service tax of in 2013-14 it was done in case of paddy. The blood banks have also been exempted from its purview.
The Highlights of the Union Budget 2014-15 are as follows
• To sustain the pace of plan expenditure, it has been kept at the same level in 2014-15 with 555322 crore rupees has been provided under the plan expenditure as it was budgeted in 2013-14.
• The non-plan expenditure in 2014-15 has been estimated at 1207892 crore rupees
• Spending raised to 2.24 trillion rupees in 2014-15, up 10 percent year on year
• Government to provide 112 billion rupees capital infusion in state run banks in 2014-15
• 33725 crore rupees has been given to Ministry of Health and Family Welfare
• 67398 crore rupees has been given to Ministry of HRD
• 15260 crore rupees has been given to Drinking water and sanitation ministry
• 6730 crore rupees has been given to Social Justice and Empowerment Ministry
• 6000 crore rupees has been given to the Union Ministry of Housing and Poverty Allegation
• 21000 crore has been given to the Ministry of Women and Child Development
• 29000 crore rupees has been given to the railways as budgetary support
• Government has announced one-rank-one-pension scheme for defence personnel from 2015
• 246397 crore rupees has been sanctioned for subsidies
• 116000 crore rupees has been allocated for food subsidy
• Defence allocation has been enhanced by 10 percent to 224000 crore rupees for 2014-15 from 203672 crore rupees of 2013-14
• To strengthen the capacity of Central Armed Police Forces by modernization and providing state-of-the-art equipment and technology, the government has allocated 11009 crore rupees
• To formulate and promote the scheme of community radio station, the government has sanctioned a fund of 100 crore rupees
• The interim budget has sanctioned 6730 crore rupees to the Social Justice Ministry
• 7000 crore rupees has been sanctioned for the Panchayati Raj Ministry
• The finance minister claimed that 140 million Indian people are out of poverty
• 246397 crore rupees has been allocated for food, fertilizer and fuel subsidy
• No changes has been introduced under the tax laws but changes has been introduced for the indirect taxes
• To stimulate growth, the government has slashed excise duty to 10 percent from 12 percent
• The interim budget has stressed its focus on manufacturing and manufacturing exports
• A ten point agenda has been created by Chidambaram to make India the third largest economy after US and China
• The government has moved for a populist move on the students loans and it has decided to waive 2600 crore rupees on outstanding loans taken by students up to 31 March 2009. It has declared a moratorium on these loans.
• Two projects sanctioned under Nirbhaya Fund of which the original was of 1000 crore rupees that was non-lapsable and another 1000 crore rupees has been granted
The global risks 2014 report has mapped 31 global risks of which few has been highlighted as serious areas of concern and they are
• Fiscal crisis
• Structurally unemployment and underemployment
• Income disparity
• Governance failure
• Food crisis
• Political and social instability
10 Tasks as part of the road map ahead include
• Fiscal consolidation: To achieve the target of fiscal deficit of 3 percent of GDP by 2016-17 and remain below that level always.
• Current Account Deficit: CAD will be inevitable for some more years which can be financed only by foreign investment. Hence, there is no room for any aversion to foreign investment.
• Price Stability and Growth: In a developing economy, a high growth target entails a moderate level of inflation. RBI must strike a balance between price stability and growth while formulating the monetary policy.
• Financial Sector reforms to be completed as laid down by Financial Sector Legislative Reforms Commission.
• Massive investment in infrastructure: to be mobilized through the Public Private Partnership.
• Manufacturing sector to be the base of India’s development: All taxes, Central and State that go into an exported product should be waived or rebated. There should be a minimum tariff protection to incentiwise domestic manufacturing.
• Subsidies, which are absolutely necessary should be chosen and targeted only to the absolutely deserving.
• Urbanisation to be managed to make cities governable and livable.
• Skill development must be given priority at par with secondary and university education, sanitation and universal health care.
• States to partner in development so as to enable the Centre to focus on Defence, Railways, National Highways and Tele-communication.
Budget in Indian Constitution
Budget in Indian Constitution is an annual financial statement. It is included in part V, Chapter 2 of Parliament Procedure in Financial Matters of Constitution of India.
As per the article 112 of Indian Constitution
The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the annual financial statement.
(2) The estimates of expenditure embodied in the annual financial statement shall show separately-
(a) The sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and
(b) The sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure.