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HIGHLIGHTS OF UNION

BUDGET OF INDIA 2006-


2007

Presented By :
Mehak Oberoi
Nirmal Maloo
Prasanjit Goswami
Rashi Jain
Sushma Pareek
INDEX
 Significance of Budget
 What is Union Budget?

 Main components of Indian Budget

 Important Factors of Budget

 Budget Estimates 2006-07

 Effect on Various Sectors of Indian Economy

 Tax Proposal
SIGNIFICANCE OF PERSONAL BUDGET
 Controls your money
 What you are spending

 Where you are spending

 Frees up money for you

 Helps you get out of debt

 Improves the quality of life


UNION BUDGET INCLUDES
 The expenditure & revenue of every year
 Capital receipts from within India or from
foreign governments and multilateral
organizations
 Plan and non-plan expenditure

 Policy announcements

 Short-term and long-term effects on finances


(Taxes)
Receipts

Revenue Capital
Receipt Receipts

Corporation Tax, Income Tax, Market Loans, Long Term


Wealth Tax, Customs, Service Borrowings
Tax State Provident Funds
BUDGET ESTIMATES 2006-07

 Plan Expenditure: up
by 20.4%.
 Non-Plan
Expenditure: up by
5.5%
 Revenue Deficit:
2.1% of the GDP.
 Fiscal Deficit: 3.8%
of the GDP.
UNION BUDGET INCLUDES
• Developments in • Central Public Sector
– Agriculture Enterprises,
– Farm credit, • Budgetary resources,
– Irrigation, • Outstanding credit,
– Transport,
– Railways,
• Foreign Trade and
– Subsidies, Merchandise exports,
– Banking system, Insurance, • Differential rate of
Agricultural Insurance, interest.
National Bank for
Agriculture and Rural
Development, Regional
Rural Banks, Housing loans,
Exclusive health insurance,
Capital market,
– Urban and Rural
Infrastructure
Development,
– Industry,
– SMEs,
BUDGET ESTIMATES 2006-07

 Plan Expenditure: up
by 20.4%.
 Non-Plan
Expenditure: up by
5.5%
 Revenue Deficit:
2.1% of the GDP.
 Fiscal Deficit: 3.8%
of the GDP.
EFFECT ON VARIOUS SECTORS OF
INDIAN ECONOMY
 Agricultural development
 Promoting employment

 Increasing investment

 Augmenting infrastructure

 Flagship Programs
AGRICULTURAL DEVELOPMENT
 Investments in Water resources - Larger
share for irrigation management of lands. :
Rs.4,500 crore
 Increase Farm Credit – Employ new farmers
in credit scheme : Rs.175,000 crore
 Banks ordered to help Self-employed groups

 Relief for farmers who took crop loans

 New Horticulture Institutes : Rs.150 crore

 National Insurance Scheme to continue


PROMOTING EMPLOYMENT
Govt
Industry changes
 Textiles: • New developments &
investments to be made in
technology as jute, & fibre
Rs.535 crore technology. : Rs.189 crore
• Institutes to be setup which
 Food will enhance investments
through banks
processing : • Task force is setup to setup
new units in the industry,
Rs.1,000 crore three new regions would be
established.
• Tourism, small scale
 Petroleum industries and handicraft
industries to be recognized
that would increase foreign
 Service sector : trade share in exports.

Rs.830 crore.
INCREASING INVESTMENT
 Equity support to central PSE : Rs.16,901
crore
 Net capital support to banking sector :
Rs.22,808 crore
 New bill on insurance

 Limit on FII raised to $ 2 billion & corporate


investments increased to $ 1.5 billion
 Ceiling on aggregate investments on mutual
funds to be raised to $ 2 billion
AUGMENTING INFRASTRUCTURE
 Telecommunication: to reach 250 million
connections allocated Rs.1,500 crore
 Power: five ultra mega power projects of
4,000 MW
 Petroleum: investment of Rs.22,000 crore

 Transport: Approval of new Road


development projects : Rs.9,945 crore
FLAGSHIP PROGRAMS
 Sarva Shiksha Abhiyan : Rs.10,041
crore
 National rural Health Mission :
Rs.8,207 crore
 Integrated Child Development Services
: Rs.4,087 crore
 National rural Employment Guarantee
Scheme : Rs.3000 crore
 Jawaharlal Nehru National Urban
Renewal Mission : Rs.4,595 crore
 National Social Assistance Programme
TAX PROPOSAL
 Direct
 Indirect
DIRECT TAX
• Personal income tax and Corporate income
tax
• Long-term capital gains
• Contribution of certain pension
• Open-ended and close-ended equity-oriented
schemes
• Cooperative banks are excluded.
• Donations to wholly charitable institutions
• Fringe Benefit Tax (FBT)
INDIRECT TAX
 Customs
 Excise

 Service Tax

 VAT and CST


INDIRECT TAX
 Customs
 Non-agricultural products peak rate reduced to
12.5% from 15%;
 The duty on mineral products reduced to 5%.
 Duty on ores and concentrates reduced to 2% from
5%.
 On 10 anti-AIDS and 14 anti-cancer drugs customs
duty has been reduced to 5%;
 On packaging machines, duty reduced to 5% from
15%.
INDIRECT TAX
 Excise
 Reduction of excise duty on all man-made
fibre yarn and filament yarn to 8% from
16%.
 Duty on aerated drinks and small cars to
be reduced to 16%.
 Customised software and software
packages to be fully exempted from excise
duty but 8% duty to be imposed on
packaged software sold over the counter.
 To all LPG stoves, concessional rate of 8%
to be extended.
 Increase in excise duty on cigarettes by
INDIRECT TAX
 Service Tax
 Service tax rate increased to 12% from
10%.
 New services like ATM operations,
maintenance and management, share
transfer agents, sale of space or time, ship
management, etc.
 Leasing and hire purchase to be treated as
loan transactions.
 Proposal to set April 1, 2010 as the date for
introducing Goods and Service Tax (GST).
 VAT and CST
 LPG has been included in the list of
'declared goods' under the CST Act.
REVENUES
 
A CLEAR CASE OF SOFTWARE
PIRACY

 Microsoft Corporation, Washington, USA, is a


leading manufacturer of software .
 Microsoft gets all of its works registered in
USA.
 Microsoft is facing a problem of software
piracy.
 Products of Microsoft are sold by illegal
methods of copying and counterfeiting.
 Microsoft found one company,Deepak

Raval and Company.


o Used to sell pirated copies of the softwares of

Microsoft.
CONTINUED…..
 Microsoft filed a suit against the company in
High Court on account of piracy.
 Microsoft collected serious proofs against the
company for confirment of infringement.
 Microsoft sent a letter to Deepak Raval &
Company.
 Prayed for permanent injunction against the
company.
 The Court gave decision in favour of
Microsoft.
CONCLUSION
 As Microsoft is a very large player in market of
software and IT products, it has a major advantage of
having all the products registered. In India the
scenario seems to be quite different.
 This causes serious damage to our economy as all the
pirated softwares are traded undercover and no taxes
are paid to the government, so the government
earnings are reduced to a very large extent.
 This would not let any new foreign investments in
India and also the market here would remain
backward.
 The individual spending on the software purchasing
expense would be reduced and new technological
developments can also get hindered.
THANK
YOU!!!!