Positive & Negative Of Budget 2007

Finance Minister P Chidambaram presented a mixed bag of proposals for the capital markets today.

Positives:

1) PAN to be made sole identification number for all participants in securities market with an alpha-numeric prefix or suffix to

distinguish a particular kind of account;


2) Idea of Self Regulating Organisations (SRO) to be taken forward for different market participants under regulations to be made by Sebi;


3) Mutual funds to be permitted to launch and operate dedicated infrastructure funds;


4) Individuals to be permitted to invest in overseas securities through Indian mutual funds;


5) Short-selling settled by delivery, and securities lending and borrowing to facilitate delivery, by institutions to be allowed;


6) Enabling mechanism to be put in place to permit Indian companies to unlock a part of their holdings in group companies for meeting their financing requirements by issue of exchangeable bonds.


Negatives :


1) Rate of dividend distribution tax to be raised from 12.5% to 15% on dividends distributed by companies....


2) ..and to 25% on dividends paid by money market mutual funds and liquid mutual funds to all investors.

BENEFITS FOR CONSUMERS (DUTIES AND CESS)

Water purification devices, including ROs and filters, fully exempted from excise.

Excise duty on plywood reduced from 16% to 8%.

Duty on sunflower oil reduced by 15%.

3% import duty on import of private aircraft and helicopters.

Full excise exemption for cooking coal.

Ad valorem duty on petrol and diesel to be brought down from 8% to 6%.

No excise on instant food mixes.

Watch, umbrella duties cut to five per cent.

Duty on mouth freshners cut to 45 per cent.

Excise duty raised to five per cent on cigarettes, tobacco.

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PERSONAL TAXES

Income tax exemption limit hiked by Rs 10,000 to Rs 1.1 lakh.

Income tax exemption limit for women raised to Rs 1.45 lakh.

Income tax exemption limit for senior citizens raised to Rs 1.95 lakh.

Exemption limit on medical insurance premium increased to Rs 15,000.

Exemption limit on medical insurance premium for senior citizens increased to Rs 20,000.

No change in corporate income tax.

ESOPS to be brought under Fringe Benefit Tax.

EDUCATION
Allocation for education up 34.2 per cent.

Education cess on all taxes hiked to 3%.

Education spending at Rs 32,352 crore, up 44.2 per cent.

Rs 750 crore allocated for National Scholarship Scheme.

Scholarships for Class 8th-12th students to arrest dropouts.

Rs 3,794 crore outlay for primary education.

500,000 classrooms to be added in FY 07.

200,000 teachers to be appointed in 2007-08.

Rs 73.24 billion allocated for mid-day meal scheme.

To allocate Rs 750 crore for setting up ITIs.

300 ITIs to be upgraded to institutions of excellence by 2009.

A total of 1,396 ITIs to be upgraded.

Interest-free loans to be provided to each ITI.

INDUSTRY
Import duty of 15 specified machinery to be reduced from 7.5% to 5%

Export duty on iron ore and concentrate at the rate of Rs 300 per tonne.

Custom duty on man-made yarn cut to 7.5 per cent.

Cut import duty on medical equipments to 7.5 per cent.

Social security scheme for unorganised workers.

Effective corporate tax rate at 19.2 per cent.

One per cent cut in Central Sales Tax.

Gross tax revenue has increased by 19.9%, 20% and 27.8% in first three years of UPA.

AGRICULTURE
Agricultural growth to be raised from 2.3% of GDP at present to 4%.

Agriculture to be accorded priority in all policy decisions.

Grant of Rs 50 crore each for Pant Nagar Agricultural University and Tamil Nadu Agricultural University.

Weather-based crop insurance scheme to be launched with Rs 100 crore corpus.

100% subsidy to small farmers and 50% for others for water harvesting techniques.

Rs 100 crore allocated for development of rainfed areas.

NABARD allocated Rs 1,800 crore for ground water recharge schemes.

Rs 22,452 crore allocated for fertilizer subsidy.

NABARD to issue Rs 5,000 crore tax-free rural bonds

Rs 11,000 crore earmarked for irrigation projects.

Production of certified seeds to be scaled up.

Farm credit growth doubled in two years.

Special funds for coffee, rubber and spices.

TEXTILES
Allocation for textile parks raised from 189 crore to 425 crore.

Rs 911 crore allocated to the handloom sector for technology upgradation.

Rs 321 crore allocated towards health insurance scheme for weavers.

Rs 22.5 crore allocated for modernisation of coir industry.

HEALTH
National AIDS Control Programme III to be launched from 2008.

Rs 969 crore allocated for AIDS control

Allocation to health hiked by 21.9 per cent.

Rs 15,291 crore earmarked for health.

Total service tax exemption for clinical trial of new drugs.

BANKING & FINANCE
Rs 40,000 crore allocated for acquisition of RBI stake in State Bank of India.

Regional Rural Banks (RRBs) to extend branchs in a big way.

RRBs to accept NRE deposits.

National Housing Bank to start reverse mortgage scheme for senior citizens.

Cash withdrawal limit from banks raised to Rs 50,000 crore.

PAN to be sole identification number for all market transactions.

Lending to SMEs by banks to be incentivised.

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Isnt short selling allowed only for institutions not individuals Unfair????

Institutions provide more money as tax to teh "SARKAR" than individuals.

yes: