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Highlights - Direct and Indirect Taxes
• Special excise duty reduced to a single rate of 16 per cent.
• Centre proposes to levy a surcharge of 15 per cent on cigarettes.
• The duty on bidis is being raised to Rs 7 per thousand from Rs 6.
• The total duty on pan masala would be 55 - 60%. Miscellaneous tobacco products like chewing tobacco would be charged to a total duty of 60%.
• Excise duty on motor spirit and high speed diesel oil increased to 16 per cent.
• Government levies an 8% excise duty on Compressed Natural Gas (CNG), which till now was exempt from any duty.
• Liquefied Natural Gas (LNG) exempted from the additional duty of customs (CVD).
• Centre imposes a duty of 16 per cent on garments sold under the registered trade name.
Highlights - Sectors
• Centre proposes to remove inter-state movement of food grains, speeding up of agricultural sector reforms.
• Intensification of infrastructure investment, continued reform in the financial sector and capital markets.
• Better educational opportunities and programmes of social security to be introduced.
• Growth to be accelerated through stringent expenditure control of non-productive expenditure.
• Centre proposes rationalisation of subsidies and improvement in the quality of government expenditure.
• Privatisation process to be accelerated, public enterprises to be restructured.
• Revenue enhancement through widening of the tax base and administration of a fair and equitable tax regime.
Highlights - Customs
• Second hand cars would become freely importable from April this year.
• Government raises basic import duty to 105% taking the total duty to over 180%.
• Centre proposes to reduce the basic customs duty on specified textile machines, including shuttle-less looms, from 15% to 5%.
• Accredited cameramen allowed to import camera worth Rs. 1,00,000 without paying customs duty every 2 years instead of 5 years.
• Government proposes to reduce customs duty on cement, and clinkers to 25% from 35%.
• Gold to be cheaper, duty on it slashed from Rs. 400 per 10 grams to Rs. 250 per 10 grams.
• Customs tariff rationalised, to be brought down to East Asian levels. It is to be achieved progressively within three years. They will be reduced to a minimum, with a peak of 20 per cent.
• A new Manual of Procedures and Instructions on will be brought out by September 1, 2001. Central excise rules to be make simpler and user friendly.
• Central Excise and Customs to be brought out by September 1, 2001.
• The central excise rules are also to be simplified to make them user-friendly
Part A of the Union Budget 2001-2002
• Fiscal deficit contained at 5.1 per cent of the GDP in 2000-01.
• Combined fiscal deficit of Centre and State at 10%.
• Centre targets mopping Rs. 12,000 crore through PSU disinvestment during 2001-02.
• Privatisation to be accelerated.
• Budgetary support for Central, State and Union Territories up by 16% to Rs. 13,862 crore.
• Total expenditure in the budget estimated at Rs. 375,223 crore in 2001-02.
• Gross budgetary support for central plan enhanced to Rs. 59,456 crore in the current fiscal year.
• Postal rates to be revised to contain deficit.
• Facility of LTC to Central Government employees to be suspended for 2 years.
• Administered interest rates to be reduced by 1 to 1.5 per cent from March 1, 2001.
• Interest rates on loans portion of Central assistance to State plans being reduced by 50 basis points.
• NABARD to cut landing rates from 11.5 to 10.5 per cent.
• Limit of investment in a company under the portfolio investment route by FIIs increased to 49%.
• Companies issuing ADRs and GDRs to be allowed to make foreign investments upto 100% of these proceeds.
• Indian companies may now invest abroad upto $50 million annually through the automatic route.
• Indian companies that had issued ADRs and GDRs may acquire shares of foreign companies upto an amount of $100 million or an amount equivalent to 10 times of their exports in a year.
• Foreign investors bringing in a minimum of $50 million FDI in non-banking financial companies need not to be accompanied with a divestment of minimum of 25% of their holdings in the domestic market.
• Banking Service Recruitment Boards to be abolished by July 31, 2001.
• Banks to do all future recruitments themselves.
• RBI to set up an electronic Negotiated Dealing System by June 2001 to facilitate transparent electronic bidding in auctions and dealing in government security on a real time basis.
• Government Security Act to replace Public Debt Act.
• Seven more Debt Recovery Tribunals to be set up during 2001-2002.
• Rs. 4243 crore provided towards Incentive Fund to encourage states to implement monitorable fiscal reforms as a part of state fiscal reforms.
• Devolution of Central taxes to states is expected to go up by about Rs. 9,000 crore in 2001-2002 over the current year.
• Non-plan expenditure of Centre is estimated to go up to Rs. 2,75,123 crore in 2001-2002 as against Rs. 2,49,285 crore in revised estimates for 2000-2001.
• Recommendations of the Expenditure Reforms Commission to be implemented by July 31, 2001.
• Identified surplus staff to be transferred to surplus pool.
• Centre to set up a high level expert group to review the pension system.
• Employees entering Central Government services
after October 1, 2001 to receive pension through a new programme based on defined contributions.
• Standard Licence Fee (Rent) on government accommodation to be enhanced from April 1 this year.
• Centre proposes to remove inter-state movement of food grains.
• Essential Commodities Act, 1995 to be reviewed.
• The number of commodities declared as essential under the Essential Commodities Act to be brought down.
• Financial assistance to be given to state governments to enable them to procure and distribute food grains to BPL families at subsidized rates under PDS.
• Kisan Credit Cards (KCC) to all eligible farmers within three years.
• Holders of KCC to get personal insurance package
to cover them against accidental death or permanent disability on subsidized premia.
• NABARD to reduce interest rates for funding the storage of crops from 10% to 8.5%.
• Centre proposes Rs. 750 crore for rural electrification to be completed within next six years.
• A time bound programme for installation of 100% metering by December 2001.
• Energy audit at all levels.
• Allocation to the accelerated power development programme stepped up to Rs. 1,500 crore from Rs. 1,000 in 2000-2001.
• Commercialization of distribution of power, SEBs restructuring.
• Prior government approval not required for effecting lay-off, retrenchment and closure by industrial establishments employing less than 1000 workers.
• Separation compensation increased to 45 days from 15 days for every completed year of service.
• Government to announce Ashraya Bima Yojana to provide compensation to workers who lose their jobs.
• Pradhan Mantri Gram Sadak Yojana with a fund of Rs. 2,500 crore to provide connectivity of every village with a population of over 1,000 persons by 2003 and with a population of upto 500 persons by 2007.
• In the SSI sector 14 items related to leather goods, shoes and toys to be de-reserved.
• Exemption limit doubled to Rs 1 crore from September 1, 2000.
• Plan allocation for Ministry of Health and Family Welfare steeped up to Rs. 5780 crore from Rs. 4920 crore.
• HIV/AIDS control programme allocated Rs 180 crore.
• New comprehensive commercial bank scheme for educational loans to cover all courses in schools and colleges in India and abroad.
• Rs. 7.5 lakh to be granted for loan for studies in India and Rs. 15 lakh for abroad.
• All existing and on-going schemes on elementary education to converge into an integrated national education programme.
• Integrated schemes for women's empowerment in 650 blocks through women's Self-Help Groups being launched.
• IRDA to look into social security issues of the unorganised sector and provide a road map for pension reforms by October 1, 2001.
• Allocation for welfare schemes for upliftment of SC/ST enhanced.
• Retail price of sugar under PDS being revised to Rs. 13.25 a kg from March 1, 2001.
• The allocation for textiles enhanced by more than 50 per cent to Rs. 650 crore from Rs. 457 crore this year.
• Deadline of March 2002 for dis-mantaling of the APM in the petroleum sector to be adhered to.
Part B of the Union Budget 2001-2002
• All surcharges on income and corporate taxes withdrawn except two per cent levy for calamity contingency fund.
• Income and corporate tax rates remain unchanged.
• Assesses having an income of up to Rs. 60,000 will not besubject to any surcharge.
• Co-operative societies to taxed at 30% from 35% now.
• Direct taxes proposals to result in a revenue loss of Rs. 5,500 crore.
• Loss making companies also to file their returns.
• Salaried persons in the lower income range bracket to Rs one lakh, to get an enhanced tax rebate at the rate of 30% in respect of their eligible investments under section 88 of the Income Tax Act.
• Centre proposes to provide for the taxation of profits from the domestic sales of EOUs and units located in EPZs, free trade zones and Software Technology Parks. 25% of their sales in the domestic market are currently tax exempt.
• Centre reduces three rates of special excise duty to a single rate of 16%.
• A surcharge of 15% on cigarettes and duty on bidis to increase from Rs 6 to 7 per thousand.
• Excise duty on high speed diesel and motor spirit to be increased to 16%, levies 8% duty on CNG.
• Special excise duty on aerated soft drinks, soft drink concentrates for vending machines and motorcars to be reduced to 16%.
• 16 per cent excise duty to be imposed on garments sold under a registered name.
• Excise duty exemption withdrawn on certain SSI products of cotton yarn, ball or roller bearings, arms and ammunition for private use.
• Government proposes to withdraw customs duty surcharge of 10%, due to this peak level of custom duty will decline to 35%.
• Custom duty on tea, coffee, copra and coconut doubles to 70 per cent.
• Custom duty on crude edible oils to be increased to a uniform rate of 75% from the existing range of 35 to 55% and on refined oils to 85% per cent from 45-65%.
• Duty in telecom products and IT to be reduced to 15%.
• Total duty rate on second hand cars will be more than 180%, basic custom duty to be increased to 105%.
• Centre proposes to levy CVD at a suitable rate on imported liquor.
• Basic custom duty on specified textile machinery reduced to 5%.
• Custom duty on silk waste, cotton waste and flax fibre reduced to 15 per cent.
• Custom duty on soda ash to be reduced to 20%.
• Custom duty on polyester chips and nylon chips for manufacture of fibre and yarns to come be reduced to 25%.
• Customs duty on polished coloured gem stones and cut reduced to 15% from 35%.
• Duty on rough diamond to be reduced to five per cent.
• LNG to be exempted from CVD levy.
• Custom duty on cement and clinkers to be reduced to 25 %.
• Duty on gold to be reduced from Rs.400 to Rs 250 per 10 grams.
• Custom tariffs to be brought down to East Asian levels with a peak rate of 20%.
• Proposals on the excise side are estimated to result in a revenue loss of Rs. 4,677 crore in a year
• On the customs side the Centre's proposals are estimated to result in revenue loss of Rs 2,188 crore.
• Total indirect tax revenue pegged at Rs 1,40,992 crore.
• Winnings from lotteries, crossworld puzzles to be taxed at 30% from 40%.
• TV game show winners to taxed at source at the rate of 30%.
• Income tax at source will be deducted at rate of 10% on income by way of commission or brokerage exceeding Rs. 2,500 except on transactions related to shares and securities.
• Tax payable on the distribution of dividends of domestic companies and income in respect of Units of MFs and UTI to be reduced to 10%.
• Ten year tax holiday for core sector of infrastructure.
• In case of airports, ports, inland ports, industrial parks and generation and distribution of power will have a tax-holiday of 10 years.
• Five year tax holiday available to Telecom sector till March 31, this year is being reintroduced for units commencing their operations on or before March 31, 2003.
More Budget 2001 Coverage
• The Newspaper Today - Budget 2001
• The Times of India - Budget 2001
• Rediff.com - Budget 2001
• Sify.com - Budget Special
• Yahoo! India Finance - Budget 2001
• NDTV.com Budget 2001
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