Budget Update on Financial Sector, ....
BUDGET ESTIMATES 2006-07
• Plan Expenditure: estimated at Rs. 172,728 crore, up by 20.4%.
• Non-Plan Expenditure: estimated at Rs. 391,263 crore, up by 5.5%
• Revenue Deficit: estimated at Rs. 84,727 crore, 2.1% of the GDP.
• Fiscal Deficit: estimated at Rs. 148,686 crore, 3.8% of the GDP.
FINANCIAL SECTOR
• Banking, Insurance and Pensions: net capital support to banking sector stands to be Rs. 22,808 crore, it has to be restructured; Bill on insurance to be introduced in 2006-07.
• Capital Market: limit on FII investment in Government securities to be increased to $2 billion from $1.75 billion; limit to FII investment in corporate debt to be $1.5 billion from $0.5 billion; ceiling on aggregate investment by mutual funds in overseas instruments is to be raised to $2 billion from $1 billion with removal of requirements of 10% reciprocal share holding.
FISCAL CONSOLIDATION
• Twelfth Finance Commission: Rs. 94,402 crore to be released as states' share in gross tax revenues.
SERVICES SECTOR
• Tourism: development of 15 tourist destinations and circuits to be undertaken; 50 villages with core competency in handicrafts and other related work to be identified and developed; 4 new institutes of hotel management to come up in Uttaranchal, Chhattisgarh, Haryana and Jharkhand; plan allocation is increased to Rs. 830 crore from Rs. 786 crore.
• Foreign Trade: the share in exports to be doubled by 2008-09.
INVESTMENT
• Equity support from the Government of Rs. 16,901 crore and loans of Rs. 2,789 crore to Central PSEs, including Railways; to make india a hub for gems and jewelry.
SERVICE TAX
• Service tax rate increased to 12% from 10%.
• New services to be included like ATM operations, maintenance and management, share transfer agents, sale of space or time (other than print media), sponsorship of events (other than sports events), 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).
• Plan Expenditure: estimated at Rs. 172,728 crore, up by 20.4%.
• Non-Plan Expenditure: estimated at Rs. 391,263 crore, up by 5.5%
• Revenue Deficit: estimated at Rs. 84,727 crore, 2.1% of the GDP.
• Fiscal Deficit: estimated at Rs. 148,686 crore, 3.8% of the GDP.
FINANCIAL SECTOR
• Banking, Insurance and Pensions: net capital support to banking sector stands to be Rs. 22,808 crore, it has to be restructured; Bill on insurance to be introduced in 2006-07.
• Capital Market: limit on FII investment in Government securities to be increased to $2 billion from $1.75 billion; limit to FII investment in corporate debt to be $1.5 billion from $0.5 billion; ceiling on aggregate investment by mutual funds in overseas instruments is to be raised to $2 billion from $1 billion with removal of requirements of 10% reciprocal share holding.
FISCAL CONSOLIDATION
• Twelfth Finance Commission: Rs. 94,402 crore to be released as states' share in gross tax revenues.
SERVICES SECTOR
• Tourism: development of 15 tourist destinations and circuits to be undertaken; 50 villages with core competency in handicrafts and other related work to be identified and developed; 4 new institutes of hotel management to come up in Uttaranchal, Chhattisgarh, Haryana and Jharkhand; plan allocation is increased to Rs. 830 crore from Rs. 786 crore.
• Foreign Trade: the share in exports to be doubled by 2008-09.
INVESTMENT
• Equity support from the Government of Rs. 16,901 crore and loans of Rs. 2,789 crore to Central PSEs, including Railways; to make india a hub for gems and jewelry.
SERVICE TAX
• Service tax rate increased to 12% from 10%.
• New services to be included like ATM operations, maintenance and management, share transfer agents, sale of space or time (other than print media), sponsorship of events (other than sports events), 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).
