Indian Interim Union Budget 2014-15 - Vote on Account - Presented by Mr P. Chidambaram on 17th March 2014 - Highlights

Indian Finance Minister P. Chidambaram presented on 17th March 2014, the interim budget for the fiscal year 2014/15. This Vote on Account 2014 will cover expenditure until the government's term ends in May 2014. Finance Minister asserted that our objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing. I can confidently assert that the fiscal deficit is declining, the current account deficit is constrained, inflation is moderated; exchange rate is stable, he said. Indian economy is 11th largest in the world and the fortunes of India will have significant impact on world economy in the future, he added.

TAX PROPOSALS

# No major change in tax rates
# Factory gate tax to be reduced to 10 percent from 12 percent on some capital goods, consumer durables
# Cut excise duty on small cars, two wheelers, commercial vehicles to 8 percent from 12 percent
# Recommends excise duty reductions on larger vehicles
# Restructure of factory gate tax rates for manufacturing of mobile handsets

BANKS RESTRUCTURING

# Govt to provide 112 billion rupees capital infusion in state run banks in 2014/15
# Propose to set up public debt management office to start5 work from 2014/15

PRIVATISATION

# Target from stake sale in state run firms for 2013/14 revised to 258.41 billion rupees
# Target for 2014/15 at 569.25 billion rupees

GROWTH

#GDP expansion in 2013/14 third and fourth quarters will be at least 5.2%

Fiscal Deficit

#Fiscal deficit seen at 4.6 percent of GDP in 2013/14
# Fiscal deficit projected at 4.1 percent of GDP in 2014/15
#Need to bring down fiscal deficit to 3% of GDP by 2016/17

CURRENT ACCOUNT DEFICIT

#Current account deficit for 2013/14 projected at $45 billion
#Forex reserves to rise by $15 billion by end of 2013/14

EXPORTS

#Merchandise exports seen at $326 billion in 2013/14, up 6.3 percent year on year.
#Agriculture exports expected to touch $45 billion in 2013/14, up from $41 billion in 2012/13

BORROWING

# Gross market borrowing seen at 5.97 trillion rupees in 2014/15
# Net market borrowing at 4.07 trillion rupees
# Debt repayment in 2014/15 seen at 1.897 trillion rupees
# Ways and Means advances for 2014/15 estimated at 100 billion rupees

SPENDING

#Plan expenditure for 2014/15 seen at same level as previous year
#Non plan spending estimated at about 12.08 trillion rupees in 2014/15

SUBSIDIES

#Total spending on food, fertilisers and fuel at 2.5 trillion rupees in 2014/15
# Food subsidy estimated at 1.15 trillion rupees, fertiliser subsidy at 679.71 billion rupees. Petroleum subsidy seen at 634.27 billion rupees versus revised figure of 854.8 billion rupees for 2013/14.

DEFENCE

Spending raised to 2.24 trillion rupees in 2014/15, up 10 percent year on year

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