Chile Earthquake 27-Feb-10

I had the pleasure of meeting Ex-President Ricardo Lagos of Chile and the delegation with him to India in 2005. My prayers for strength to Chilean acquaintances and hope for a speedy recovery.

Economist Chile Earthquake click here

Budget 2010

BUDGET 2010

1. ECONOMIC OVERVIEW
1. Indian Economy is in a much better position than the previous year
2. Economy can achieve GDP growth rate of 10% in the coming financial year also
3. Significant private investment inflow is also expected to boost GDP growth rate.
4. The Economic Survey not only suggested the continuation of stimulus for the export sector, but also suggested a further reduction in the excise duty for related industries.
5. According to Finance Minister Pranab Mukherjee, economy is to grow over 7.5% this fiscal and 8% next fiscal.

2. FISCAL POLICIES
1. Fiscal deficit target at 5.5 per cent for FY11
2. FY10 fiscal deficit revised to 6.9 per cent of GDP
3. Rs 25000 cr disinvestment target this year.
4. Rollback in excise duty to 10%
5. Govt announces partial rollback in excise duty

3. INFRASTRUCTURE
1. Rs 1,73,552 crore provided for infrastructure development
2. Rs 950 cr more for Railways
3. Road development hiked to Rs 19894 Crs
4. Rs 1.73 lakh Crs, which is 46% of total plan outlay, reserved for infrastructure development
5. Need to improve food security and healthcare systems

4. BANKING LICENSES
1. Additional banking licenses to private players
2. Rs 16,500 crore allocated as capital support for PSU banks
3. Government will provide further capital to strengthen the RRBs so that they can have adequate capital base.
4. RBI may give banking licenses to Pvt cos and NBFCs

5. AGRICULTURE
1. Budget focuses on agriculture and farmers. Fertilizer subsidy will be reduced
2. Rs 300 cr proposed for Rashtriya Krishi Vikas Yojana
3. 4 pronged strategy for agriculture
4. 2 per cent loan subsidy for farmer loans
5. Extend loan payments for calamity hit farmers
6. Rs.200 crore provided for sustaining the gains already made in the green
7. Revolution areas through conservation farming

6. FOOD PROCESSING
1. Five mega food parks to be set up
2. Development of food processing sector by providing infrastructure
3. Pvt sector to meet food grain storage deficit

7. PETROLEUM AND DIESEL PRICING POLICY
1. Fuel prices likely to go up
2. Excise duty on petrol and diesel raised to Rs 1/litre
3. To restore 7.5% duty on petrol and diesel.
4. To restore 5% duty on crude petroleum

8. INVESTMENTS
1. Calculation of indirect foreign investment in Indian companies defined clearly.
2. Significant private investment
3. inflow expected to boost GDP
4. Rs 2400 Crs allocated for MSMEs
5. Liberalization of pricing and payment of technology transfer fee and
6. Trademark, brand name and royalty payments

9. FOCUS ON CLEAN ENERGY AND INDUSTRIES
1. Establishment of National Clean Energy Fund
2. Grant of 200 cr to Tamil Nadu Textiles
3. Rs 500 cr for clean Ganga
4. Food security bill draft ready

10. EDUCATION
1. 1 Increase allocation in school education to 31,036 cr
2. 2. States will have access to Rs.3,675 crore for elementary education
3. under the Thirteenth Finance Commission grants for 2010-11.

11. POWER AND ENERGY
1. Allocation to power sector doubled to Rs 5,130 crore
2. Rs 5000 cr allocated for solar hydro projects in Ladakh region
3. NREGA allocation 40,100 cr
4. Double plan allocation for power sector
5. Allocation of Rs 1900 cr for UID project.

12. RURAL AND URBAN DEVELOPMENT
1. Rs 61,000 cr for rural development
2. Rs 12,000 crore relief to drought affected region of Bundelkhand
3. Banks for villages with a population of 200
4. Rs 5400 Crs allocated for urban development
5. 25% of plan allocation for rural infrastructure
6. Rs 48000 Crs for Bharat Nirman
7. Indira Awaz Yojana allocation Rs 10,000 cr

13. DIRECT TAX
1. Individual

TAX RATE	NEW TAX SLABS	INCOME	TAX SAVING
Exempted Income	160000	Rs 4 Lakh	Rs 10300
10%	160001 – 500000	Rs 5 Lakh	Rs 20600
20%	500001 – 800000	Rs. 7 Lakh	Rs 41200
30%	800001 and above	Rs 10 Lakh	Rs 51500
Income upto Rs 1.9 Lakh and Rs 2.4 lakh exempted in the case of women and senior citizens, respectively. The Budget 2010 also offers an annual deduction of Rs 20,000 towards an investment in long-term infrastructure bonds, on top of whatever 80C deduction a taxpayer might have taken.

2. Corporate
1. Surcharge reduced to 7.5% from 10%
2. MAT rate rised to 18% from 15%
3. GST will be implemented next year
4. Direct Tax code by Apr 2011

14. INDIRECT TAX
1. Petroleum
1. Customs duty on crude petroleum is being increased from Nil to 5%.
2. Customs duty on Motor Spirit (petrol) and HSD (diesel) is being increased from 2.5% to 7.5%.
3. Customs duty on some other specified petroleum products is being increased from 5% to 10%.

2. Precious Metals
1. Customs duty on serially numbered gold bars (other than tola bars) and gold coins is being increased from Rs.200 per 10 gram to Rs.300 per 10 gram.
2. Customs duty on other forms of gold is being increased from Rs.500 per 10 gram to Rs.750 per 10 gram.
3. Customs duty on silver is being increased from Rs.1000 per kg to Rs.1500 per kg.
4. Customs duty on platinum is being increased from Rs.200 per 10 gram to Rs.300 per 10 gram.
5. The above change in rates would also be applicable when gold, silver and platinum (including ornaments) are imported as personal baggage.

3. Additional Duty Of Customs Of 4 % (Special CVD)
1. Goods imported in pre-packaged form and intended for retail sale and certain specified goods namely, ready-made garments, mobile phones and watches are being provided an outright exemption from additional duty of customs of 4%.
2. In addition, outright exemption from this duty is also being provided to Carbon Black Feedstock, waste paper and paper scrap.
3. The existing exemption by way of refund would continue on other items.

4. Food/Agro Processing
1. Project imports status is being granted to the initial setting up or substantial expansion of, a cold storage, cold room (including farm pre-coolers) for preservation or storage or an industrial unit for processing of agricultural, apiary, horticultural, dairy, poultry, aquatic & marine produce and meat.
2. These projects would attract concessional rate of basic customs duty of 5%.
3. Project imports status is being granted to installation of Mechanized Handling Systems & Pallet Racking Systems, in mandis or warehouses for food grains and sugar, with concessional rate of basiccustoms duty of 5%.
4. Such systems are also being exempted from additional duty of customs (CVD) and special additional duty of customs.
5. Truck Refrigeration units for the manufacture of refrigerated vans/trucks is being fully exempted from basic customs duty. Such units are already exempt from excise duty.
6. Basic customs duty is being reduced from 7.5% to 5% on specified agricultural machinery such as paddy transplanter, laser land leveler, cotton picker, reaper-cum-binder, straw or fodder balers, sugarcane harvesters, track used for manufacture of track-type combine harvester etc.

5. Agriculture/Horticulture
1. Basic customs duty on long pepper is being reduced from 70% to 30%.
2. Basic customs duty on ‘asafoetida’ (heeng) is being reduced from 30% to 20%.
3. Full exemption from basic customs duty is being provided to bio-polymer/bio-plastics (HS Code 39139090) used for manufacture of bio-degradable agro mulching films, nursery plantation & flower pots.

6. Capital Goods
1. Mono Rail Projects for urban transport are being granted project imports status under Heading No. 98 01 and would accordingly attract concessional rate of 5% basic customs duty.
2. Tunnel Boring machine for hydro-electric power projects is being fully exempted from basic customs duty with Nil CVD.
3. Concessional rate of customs duty of 5% presently available upto 06.07.2010 on specified machinery for tea, coffee and rubber plantation is being extended upto 31.03.2011. Excise duty exemption is also being re-introduced on these items upto 31 .03.2011.
4. Specified road construction machinery items are presently fully exempt from customs duty subject to specified conditions. Sale or disposal of such machinery items at depreciated value is being allowed on payment of customs duties on depreciated value at the rates applicable at the time of import subject to specified conditions.

7. Concessions To Environment-Friendly Items
1. Full exemption from basic customs duty and special additional duty of customs is being extended to specified parts namely, batteries including battery chargers, electric motors and AC or DC motor controllers imported for manufacturing all categories of electrical vehicles including cars, two wheelers and three wheelers (like Soleckshaw).
2. These parts will attract CVD of 4%. The concession is subject to actual user condition. This concession will be available till 31 .03.2013.
3. A concessional rate of basic customs duty of 5% is being provided to machinery items, instruments, appliances required for initial setting up of solar power generation projects or facilities.
4. These items have been exempted from CVD also by way of excise duty exemption provided to them.
5. Ground source heat pump (for geo-thermal energy applications) is being fully exempted from basic customs duty and special additional duty of customs.

8. Health Sector
1. At present, medical equipments attract varying rates of customs duty and are spread over many lists. This multiplicity of rates is being done away with and now all medical equipments (with some exceptions) will attract 5% basic customs duty, 4% CVD/excise duty and Nil special additional duty of customs [i.e. effective duty of 9.2%].
2. Parts required for the manufacture and accessories of medical equipment will also attract 5% concessional basic customs duty with Nil special CVD.
3. Concessional customs duty available to spares for the maintenance of medical equipment is being withdrawn except in specified cases.
4. Full exemption from basic customs duty and CVD/excise duty is being retained for specified medical devices (exempt by description) as well as for assistive devices, rehabilitation aids and other goods for disabled (List 41).
5. Cobalt-chrome alloys, special grade stainless steel etc. for the manufacture of orthopedic implants are being exempted from basic customs duty subject to actual user condition.

9. Electronics Hardware
1. Battery chargers and hands-free headphones are the basic accessories of mobile phones. Full exemption from basic customs duty and CVD presently available for parts, components, accessories for manufacturing of mobile handsets including cellular phones and parts thereof is being extended to parts for the manufacture of battery chargers and hands-free headphones also.
2. Full exemption from 4% special additional duty of customs presently available upto 06.07.2010 on parts, components and accessories for manufacture of mobile handsets including cellular phones, parts thereof (except accessories) is being extended to parts of two specified accessories also upto 31.03.2011.
3. Basic customs duty is being reduced from 10% to 5% on magnetrons of upto 1,000 kw for the manufacture of microwave ovens.
4. Full exemption from customs duty is being extended to additional specified capital goods and raw materials for the manufacture of electronic hardware.

10. Entertainment/Media
1. Films for exhibition are imported on cinematographic films or digital media. Digital masters/Stampers of films are also imported for duplication and distribution of CD/DVDs. It is being provided that customs duty would now be charged only on the value of the carrier medium and the customs duty on the balance value will be exempt.
2. Similar tax treatment, as provided to films above, is being extended to music and gaming software (other than pre-packaged form) for retail sale imported on digital media for duplication. Pre-packaged Movies, Music and Games (meant for use with gaming consoles) will continue to be charged to import duties on value determined in terms of the provisions of the Customs Act.
3. Promotional material like trailers, making of films etc. imported free of cost in the form of electronic promotion kits (EPK)/ Betacams are being fully exempted from basic customs duty and CVD.
4. Project imports status is being accorded to ‘Setting up of Digital Head End’ with 5% concessional basic customs duty and Nil special additional duty of customs.

11. Gold Refining
1. Gold ore and concentrate are being fully exempted from basic customs duty and special additional duty of customs.
2. CVD @ Rs.140 per 10 gram of gold content will be charged. This duty structure is subject to actual user condition.

12. Export Promotion
1. Basic customs duty on Rhodium is being reduced from 10% to 2%.
2. The current limit of Rs. 1 lakh per annum for duty free import of samples is being enhanced to Rs. 3 lakh per annum
3. At present specified components, raw materials and accessories for the manufacture of sports goods are exempt from basic customs duty. Some additional items are being added to the list of exemption.

13. Electrical Energy
1. At present, Electrical energy is fully exempt from customs duty.
2. Electrical energy supplied from a Special Economic Zone to the Domestic Tariff Area and non – processing areas of SEZ would now attract duty of 16% ad valorem + Nil Special CVD.
3. This change is being made retrospectively w.e.f. 26th June, 2009.
4. Exemption on supplies or imports of electrical energy, other than the above, would continue.

15. COMMODITIES TO BE CHEAPER & COSTLIER: BUDGET 2010-11

Costlier	Cheaper
Jewellery	Gaming softwares
Gold and Platinum	Toys
Refrigerators	CDs
Televisions	CFLs
Cement	Mobile Phones
Air Conditioners
Cigarettes
SUVs

16. MSMES

1. Extension of existing interest subvention of 2% for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.
2. High Level Council on Micro and Small Enterprises to monitor the implementation of the recommendations of High-Level Task Force constituted by Prime Minister.
1. Increase sub-limit to 6 percent from 4.9 percent
2. Shortage of credit
3. Need for a focused procurement policy
4. Prompt payment of MSME dues
5. Additional finances from SIDBI
6. Simplification of labour laws to prevent inspector raj
7. Formulation of a one-time settlement policy to strengthen the MSME industries
8. Remove bottlenecks in their development.
3. The corpus for Micro-Finance Development and Equity Fund doubled to Rs. 400 crore in 2010-11.
4. National Social Security Fund for unorganized sector workers to be set up with an initial allocation of Rs. 1000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc.
5. Limits for turnover over which accounts need to be audited enhanced to Rs. 60 lakh for businesses and to Rs. 15 lakh for professions.
6. Limit of turnover for the purse of presumptive taxation of small businesses enhanced to Rs. 60 lakh.
7. To facilitate the conversion of small companies into Limited Liability Partnerships, transfer of assets as a result of such conversion not to be subject to capital gains tax.
8. To ease the cash flow position for small-scale manufacturers, they would be permitted to take full credit of Central Excise duty paid on capital goods in a single installment in the year of their receipt. Secondly, they would be permitted to pay Central Excise duty on a quarterly, rather than monthly basis.
9. Reduction in central excise duty on corrugated boxes and cartons from 8% to 4%.
10. Enhancement of weighted deduction on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research from 125% to 175%.

Budget 2010 hopes ...

1. FDI reforms
2. GST announcements
3. DST progress
4. Individual tax peak rate reduction from 30 to 25%
5. Divestment directions and announcements
6. Banking sector permissions to issue new instruments for infrastructure finance
7. DDT abolition
8. STT reduction
9. Increased allocation under infrastructure schemes
10. Health sector allocation increases
11. Service tax on rentals paid on immovable property removed
12. Remove customs duty and CVD on anti-cancer & HIV drugs, pass benefits to patients
13. Power single window clearance system
14. Lower and make uniform stamp duty rates for real estate
15. STPI extension by another year to allow for economic recovery
16. Telecom make uniform rate of licence fees
17. MSME incentives
18. Increased allocation for Maharashtra, Mumbai and North East India 8 states.

An impacting day ... in terms of media cover

An impacting day, in terms of media cover. The Railway Budget, found to be visionary by some, and potentially likely to lack in effective implementation by others. The killing of a Hamas leader in Dubai. Toyota's acceleration problem and related vehicle recall and fall of grace. The rhetoric in prelude to the proposed peace talks between India and Pakistan "India has the Maoists, Shiv Sena, Bajrang Dal tada tada tada" comparing domestic Indian Political issues with state promoted cross border terror from Pakistan. And then the scintillating ODI knock of 200 runs by Sachin Tendulkar. Well done Sachin, first saw you in 1987 at the Brabourne when you were a junior cricketer, barely higher than the stumps but thumped every possible delivery to cause a big score.

Sachin studied for a while at the Kirti M Doongursee college where his father the late Prof. Ramesh Tendulkar taught. I will be visiting the college on 26-Feb-10 and propose to reiterate this to the BMM students.

And then I read the following, very apt in the present context of the way things are; the globalisation of the ideology & justification of murder.

"Obviously the present crisis throughout the world is exceptional, without precedent. There have been crises of varying types at different periods throughout history- social, national, political. Crises come and go; economic recessions, depressions, come, get modified, and continue in a different form. We know that; we are familiar with that process. Surely the present crisis is different, is it not? It is different first because we are dealing not with money nor with tangible things but with ideas. The crisis is exceptional because it is in the field of ideation. We are quarrelling with ideas, we are justifying murder; everywhere in the world we are justifying murder as a means to a righteous end, which in itself is unprecedented. Before, evil was recognised to be evil, murder was recognised to be murder, but now murder is a means to achieve a noble result. Murder, whether of one person or of a group of people, is justified, because the murderer, or the group that the murderer represent, justifies it as a means of achieving a result that will be beneficial to man. That is we sacrifice the present for the future -and it does not matter what means we employ as long as our declared purpose is to produce a result that we say will be beneficial to man. Therefore, the implication is that a wrong means will produce a right end and you justify the wrong means through ideation.... We have a magnificent structure of ideas to justify evil and surely that is unprecedented. Evil is evil; it cannot bring about good. War is not a means to peace." ~Taken from 'The Book of Life', daily meditations with J. Krishnamurti.~

Can we have `Give Peace A Chance' replace `We are the world', as the effective mantra?

"Excellence is not a skill. It is an attitude." ~Ralph Marston~

I set this blog up in 2005. The first and only post for all this time was good. It was well appreciated and stood for my beliefs. Busy with other urgencies, I did not make new posts as blogs must have regularly. I wondered what would prompt me to move forward with the blog. I wondered when the `important' would over ride the `urgencies'.

I have found a reason today.

To have an attitude of appreciation for all that I otherwise, grumble about every day. The people who surround me every day and I hackle at every opportunity with a view to enhancing their work efficiency.

One of them pointed out "Attitudes are contagious. Are yours worth catching?" ~Dennis and Wendy Mannering~

I have decided to change mine. That's because "Excellence is not a skill. It is an attitude." ~Ralph Marston~

I would like to appreciate my staff and my family and their inputs to where we are all heading. "We must be willing to get rid of the life we've planned, so as to have the life that is waiting for us." ~Joseph Campbell~