The Hindu Business Line : Exemption limits raised; agri loans waived

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The Finance Minister, Mr P. Chidambaram presented what is likely to be the last full Budget of the UPA Government in Parliament on Thursday. Bank stocks tumbled as the Finance Minister announced waiver of agricultural loans to the tune of Rs 60,000 crore .

At 1 pm, the Sensex was down 382 points or 2.14 per cent at 17,442, and the Nifty also was down 112.15 points or 2.12 per cent at 5172.95.

He raised the income tax exemption threshold to Rs 1,50,000 and slashed customs and excise duties on variety of goods.

Under the income-tax proposals that will give a minimum relief of Rs 4,000 to all assessees, incomes between Rs 1,50,001 and Rs 3,00,000 will be taxed at 10 per cent, those between Rs 3,00,001 and Rs 5,00,000 at 20 per cent and above Rs 5,00,001 at 30 pe r cent. Senior citizens will pay no tax up to Rs 2,25,000 and women up to Rs 1,80,000.

Mr Chidambaram also withdrew the controversial banking cash transaction tax, but introduced a Commodities Transaction Tax on the lines of Securities Transaction Tax on options and futures. The Central Sales Tax was reduced from three to two per cent.

There will be no change in the corporate tax or the surcharge rate. While Chidambaram's direct tax proposals are revenue neutral, those on the indirect taxes side are estimated to result in a loss of Rs 5,900 crore.

Raising the Defence budget by 10 per cent from Rs 95,000 crore to Rs 1,05,600 crore in the coming year, the estimates of Plan expenditure have been fixed at Rs 2,43,386 crore which will be Rs 32.4 per cent of the total expenditure.

Non-Plan expenditure has been estimated at Rs 5,07,498 crore. The revenue deficit for the current year will be 1.4 per cent against the budget estimates of 1.5 per cent and the fiscal deficit will be 3.1 per cent against an estimate of 3.3 per cent.

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