INTERIM BUDGET

Ø Two-wheelers and cars will be cheaper while low-end mobile phones will be a bit more expensive due to changes in excise duty. Phones that cost less than Rs. 2,000 were earlier levied an excise duty of 1 per cent. They will now be levied a 6 per cent duty. Industry analysts said this could translate into a 4-5 per cent hike. The decision of Finance Minister P. Chidambaram to bring down excise duty on capital goods from 12 per cent to 10 per cent in the interim budget will provide a short-term breather for the sector,, and is expected to give a fillip to this sector which has been hit hard by slowdown.

Ø Finance Minister P. Chidambaram on Monday announced that the government had accepted the principle of ‘one rank, one pension’ for the defence forces. While presenting the Vote-on-Account in the Lok Sabha, Mr. Chidambaram allocated Rs.500 crore for the fund, a decision that is likely to benefit about 24 lakh retired armed forces personnel.

Ø Finance Minister announced an interest subsidy on education loans taken up to March 31, 2009, a move that will benefit about nine lakh students. According to the scheme, the government will pay the outstanding interest liability till December 31, 2013. Students, however, would have to pay interest from January 1, 2014. The Minister, who was of the view that student-borrowers ‘deserve some relief’, said Rs. 2,600 crore would be set aside in the current financial year itself to waive interest on outstanding loans. This amount will be transferred to Canara Bank, which is the designated banker for the Central Scheme for Interest Subsidy (CSIS). 

Ø Union Finance Minister said in his interim Budget speech on Monday that Rs.4,909 crore was being spent on modernisation of all 1.55 lakh post offices, and the project would be completed by 2015.  In the budget estimates for 2014-15, of the total plan outlay of Rs. 800 crore, Rs. 506 crore has been allocated for information technology induction in and modernisation of postal operations. Government sources said such a huge spend on modernisation would not only make services efficient and transparent but would also support the Department’s plan to open banks as it was eyeing a banking licence.

Ø Lauding the “stellar performance” of the agriculture sector, Union Finance Minister P. Chidambaram on Monday announced a farm growth of 4.6 per cent in the current year, up from 3.1 per cent achieved during UPA-I. He said the government set an agriculture credit target of Rs. 8 lakh crore for 2014-15, against Rs.7.35 lakh crore expected this year. 

Ø The government proposes to increase the grant to the Nirbhaya Fund by Rs. 1,000 crore and make it a permanent, non-lapsable fund. 

Ø The government has pushed the sale of its residual stake in Hindustan Zinc and Balco to the next financial year, and hopes to meet a disinvestment target that has been more than halved by offloading Indian Oil and BHEL shares and setting up a CPSE Exchange Traded Fund. The disinvestment target for the current financial year was slashed by about 60 per cent to Rs.16,027 crore from Rs.40,000 crore, according to the Interim Budget for 2014-15. So far, the exchequer has received about Rs.3,500 crore from PSU stake sales, leaving about Rs.12,500 crore to be mobilised from selling shares in Indian Oil Corporation, BHEL and the CPSE ETF.

Ø The government expects to raise Rs.38,954 crore in the next financial year from communication services, including proceeds from spectrum auction and related charges. In 2014-15, the government expects revenue of Rs.38,954.02 crore from communication services, which include receipts from spectrum sale, licence fees and one-time spectrum charges.