India Interim Budget 2014

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About the Interim Budget 2014
The Interim Budget for the year 2014-15 has been released by the Finance Minister P. Chidambaram on Monday, 17 February 2014 in the Lok Sabha. The budget helps the country make the transition to the next government as it prepares for the 2014 Lok Sabha polls. Addressing the parliament, Chidambaram claimed that over 140 million people got out of poverty in last 10 years of the UPA rule.

Highlights of the Interim Budget
The highlights of the 2014 Interim Budget are as follows:
  • Direct taxes remain unaltered.
  • The Nirbhaya Fund received an additional Rs 1,000 crore. The fund was set up by the Government of Delhi after the Delhi gang rape case of 16 December 2012 to ensure security of women.
  • Adequate funds have been provided to the Ministries in 2014-15.
  • Excise duty has been reduced by 20% for large and mid-segment cars, 6% for SUVs and 12% to 8% for small cars and two-wheelers.
  • Excise duty is now 10% (from an earlier 12%) in the capital goods sector to stimulate growth.
  • Railways budgetary support has been raised to Rs. 29,000 crore. In the previous year, it was Rs. 26,000 crore.
  • Rural credit allocated Rs. 8 lakh crore.
  • Rs. 36,322 crore allocated to the Ministry of Health and Family Welfare.
  • The Current Account Deficit of India has been contained at 4.6% of the GDP. The next year it will be brought down to 4.1% (USD 45 billion).
  • In 2013-14, public sector enterprises made a record Capital expenditure of Rs. 257,641 crores.
  • Foreign exchange reserves to increase by USD 15 billion.
  • A National Agro-Forestry Policy 2014 has been approved.
  • Revenue deficit estimated at 3% for current fiscal, down from the 3.3% for the last one.
  • Rs. 1200 crore allotted to Himachal Pradesh, Uttarakhand and North Eastern states as additional central assistance.
  • 30,726 crore and 48,638 crore have been allotted to the Tribal Sub-Plan and the SC Sub-Plan, respectively.
  • Child Budget and Gender Budget allotted 81,024 crore and 97,533 crore, respectively.
  • GDP growth rate in Q3 and Q4 of 2013-14 to be at least 5.2%.
  • No changes in tax laws.
  • Preparatory works are in operation for three Industrial Corridors interlinking the states of Bengaluru and Mumbai, Amritsar and Kolkata & Chennai and Bengaluru.
Reactions to the Interim Budget
Sachin Menon, National Head-Indirect Tax, KPMG welcomed the changes and said, “The vote-on-account gave the much needed relief to the capital goods, consumer durables and auto sector at a time when the demand is low. This would spur demand in the interim, provided the benefit is passed on.”

On the other hand, a very critical stance was adopted by Daksha Bakshi, Executive Director, Khaitan & Company. She said, “In the face of election, the FM was bringing to the attention of the nation the ‘growth’ and ‘development’ achieved by the UPA government, to negate the allegation of policy paralysis. An important statement was that the current account deficit needs to be contained through foreign currency inflows whether through FDI, FPI investments or through ECB, and that there is no case for doing anything to reduce these flows.”

Last updated on : February 17, 2014