Indian Budget - 2010

An Overview
Budget 2009 was a platform wherein we came to know how money was spent and how it
was used through various flawa and loopholes. Budget 2010, led by the Hon. Finance
Minister of India, Mr Pranaab Mukherjee has given a numerous good directions for a
comman man and made an impact which will sustain for a while to come. It has
impacted the things which we use and consume in daily lives which are directly
proportional to the Budget alone.

Points taken under consideration

 Increase in excise duties from 8.2% to 10.3% - The rollback of 2% in excise
duty, will not be inflationary but aid in growth in the long run.
 Exise duties at 4% on CD ROM, HD Drive - This may give rise in the prices
of assembled computers which are sold.
 Exise duty on Petrol and Diesel by 1% - Increase in petrol and diesel prices
will increase inflation in short term.
 Exise duty on large cars by 20% to 22% (MUVs and SUVs) – The capacity
of cars anyways which are penetrated are small cars in India. SUVs and MUVs
are sold very less in India.
 Domestic Flights to be expensive – It might affect the aviation sector as they
are already facing deficits at a long-term high.
 Increase in Cement Prices – Will put more fuel in the increase of the Realty
sector making a rise in the land prices.
 Excise duty on Steel, making it more expensive
 Increase in infraustruture cost -
 Government has enhanced fund allocation to Micro, Small and Medium
enterprise – This will better the chances of the people living in the rural areas
with the starting more business opportunities and
 Government will sell its stake in PSUs 5% concession on custom study
and also on Solar Energy – Another great step for encapsulating and
forwarding towards the green technology to tackle with the problem of limited
natural resources and global warming.

 Income upto Rs 1.6 lakh Nil

 Income above Rs 1.6 lakh and upto Rs. 5 lakh 10 per cent

 Income above Rs.5 lakh and upto Rs. 8 lakh 20 per cent
  Income above Rs. 8 lakh 30 per cent

It remains to be seen what would be the relative reliance placed by the Government
on direct and indirect tax revenues respectively in order to sustain the economic
growth of the country, while simultaneously pitching for accelerating Government
revenues, to continue with the large scale spending on the social and educational
sector.

Analysis
The budget document considers the high growth rates India has achieved as a ‘gain’,
which needs to be consolidated so that there can be ‘inclusive’ growth. Economics,
during its course has divorced rate of growth of output (of commodities and services)
from the question of employment. Hence, we need to use terms like ‘jobless growth’,
‘inclusive growth’ and so on. Unfortunately, a weak form of trickle down theory is
assumed in most cases. Therefore, having a high growth rate becomes a necessary
pre-requisite.
It is comforting to see that the need for good institutions have been emphasised in the
document. As one of the challenges is “to address the weaknesses in government
systems, structures and institutions at different levels of governance. ”