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Part II - FM's SPEECH on UNION BUDGET 2001-2002 Thursday, March 1, 2001
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BUDGET estimates
Revised Estimates for 2000-2001
We have been able to adhere to
the Budget target of fiscal deficit despite pressures on public finances
on account of deceleration in disinvestment programme, natural
calamities and the relief to consumers of petroleum products. The
revised estimates for the current fiscal year show a marginal decrease
in expenditure of Rs 2,965 crore as compared to the Budget
estimates.
Net tax revenues for the Centre
are estimated to be Rs 1,44,403 crore compared to the Budget estimates
of Rs 1,46,209 crore, thereby reflecting a shortfall of Rs 1806 crore.
The shortfall is mainly due to lower collection of Customs and Union
Excise duties which were reduced to provide relief to POL consumers. Non
tax revenue is estimated at Rs 61,763 crore, Rs 4299 crore more than the
estimated level of Rs 57,464 crore. However, disinvestment receipts are
expected to be lower at Rs 2500 crore against the Budget target of Rs
10,000 crore.
The fiscal deficit as a percentage
of the GDP is expected to be on target at 5.1 per
cent.
Budget Estimates for 2001-2002
In the budget estimates for
2001-2002, the total expenditure is estimated at Rs 3,75,223 crore, of
which Rs 100,100 crore is for plan and
Rs 275,123 crore for
non-plan.
Plan Expenditure
The budget support for
Central, State and UT Plans has been placed at Rs 100,100 crore, an
increase of Rs 13,862 crore over revised estimates 2000-2001. This
amounts to an increase of 16 per cent. Gross budgetary support for the
Central Plan is being enhanced from Rs 48,269 crore in the revised
estimates 2000-2001 to Rs 59,456 crore in 2001-2002. Central Plan
assistance to States and Union Territories in 2001-2002 is also proposed
to be increased to Rs 40,644 crore from Rs 37,969 crore in the revised
estimates 2000-2001.
Non Plan Expenditure
Non-plan expenditure in
2001-2002 is estimated to be Rs 2,75,123 crore compared to Rs 2,49,284
crore in Revised estimates for 2000-2001. The increase in non-plan
expenditure is mainly in interest payments (Rs 11,633 crores), defence
(Rs 7,539 crore) and Grants to State Governments (Rs 2,221
crore).
In order to practice greater
accountability and transparency, I am attaching with the budget papers
this year a new report on "Implementation of Budget Announcements,
1999-2000 and 2000-01".
Sir, I now present my tax
proposals, indirect taxes first.
In my earlier budgets, I have
endeavoured to ensure a continuity of approach in framing my revenue
proposals. The principles that have guided me have been the need for
growth in revenues, simplification and rationalization of the tax
regime, and effective tax compliance through measures, which are
friendly for the honest taxpayer, and a deterrent to the evader. I have
reduced the number of rates in both customs and excise duties,
simplified procedures and introduced measures to improve tax compliance.
I have given up my discretionary power to grant excise and customs duty
exemptions in individual cases thus saving hundreds of crore of revenue
for Government. The policy of penalties against tax evaders has also
been made non-discretionary. With all these steps I have sought to put
an end to a system that pressure groups or lobbies could influence. My
attempt this year is to take this process to its logical
conclusion.
In my last budget, I had
introduced the rate of 16% as the rate of Central Value Added Tax
(CENVAT). I had also rationalized the rates of special excise duty to
three, namely, 8%, 16% and 24%. The single rate of CENVAT now
contributes about 68% of the total excise revenues from ad valorem
duties.
I now propose to reduce the three
rates of special excise duty to a single rate of 16%. As a consequence,
I propose to abolish the 8% special excise duty on the following
items:
(1) Glazed tiles
(2) Mattresses and articles of
bedding
(3) Carpets and floor
coverings
(4) Painted canvas, studio
back cloth, etc
(5) Linoleum and textile wall
coverings etc.
(6) Scooters and motorcycles,
and
(7)
Taxis
These items will now be charged to
CENVAT only at the rate of 16%.
White cement and other special
cements, yachts and pleasure boats, arms and ammunition for private use
and articles of fur skins, will attract SED of 16% and a total duty of
32%.
The special excise duty on aerated
soft drinks, soft drink concentrates supplied to vending machines, and
motorcars will be reduced to 16%, thus putting an end to the rate of 24%
special excise duty. These items also will now bear a total duty of 32%.
There will be no change in respect of products, which already attract
this rate of 32%.
There are a few items that
currently attract CENVAT at half the rate, namely, 8%. All these items
will henceforth be charged to the normal rate of 16% except cotton yarn
including sewing thread, LPG, kerosene and diesel engines up to 10 HP,
which I am leaving at 8% for the present in the larger public
interest.
After these rationalization
measures about 80% of the revenue in respect of ad valorem duties will
come from the single rate of 16% and about 17% from the combined rate of
32%.
India is the world’s second
largest producer of fruits and vegetables. However, most of these are
wasted in the absence of proper storage and processing facilities.
Food-processing industry dealing in perishable fruits and vegetables
needs special support. I, therefore, propose to exempt food preparations
based on fruits and vegetables completely from excise duty. This will
include a very wide range of products of common use like pickles,
sauces, ketchup and juices, etc. This, along with the support I have
given to creation of better storage facilities will give a fillip to the
food processing industry and will go a long way in improving the rural
economy of our country.
The Eleventh Finance Commission
has recommended a special levy for the replenishment of the National
Calamity Contingency Fund. As an ad hoc measure, this was provided for
in the current year through a special surcharge on corporate taxes. I
propose to establish this funding on a regular basis through a special
surcharge of excise on a range of products the use of which should be
discouraged on health grounds. I propose to levy a surcharge of 15% on
cigarettes. The duty on biris would increase from Rs 6 to Rs 7 per
thousand biris. 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 High Speed Diesel
was reduced from 16% to 12% in September last year. I propose to restore
it to the normal CENVAT rate of 16%. I also propose to restore special
excise duty on motor spirit to the previous rate of 16%. The burden of
increase in duty is not proposed to be passed on to the consumers except
for any technical corrections.
LPG is charged to excise duty at
8%. I propose to apply the same rate of duty to Compressed Natural Gas,
which is exempt at present.
A special scheme of charging
excise duty from independent textile processors on compounding basis was
introduced in December 1998. The working of this scheme has resulted in
serious distortions. I have therefore decided to revert to the ad
valorem duty structure for independent textile processors with effect
from 1, March 2001. Independent processors would be allowed to take
CENVAT credit of the duty paid on inputs on a deemed basis.
- There is no economic logic to continue with
excise duty exemption on garments sold under a registered trade name. I
propose to impose a duty of 16% on such garments.
Products of SSI units are exempt
from excise duty up to Rs one crore. This exemption is intended to
provide fiscal support to the genuinely small producers. I propose to
withdraw this exemption in respect of the following items, in which
misuse of the exemption is more than likely:
« Cotton yarn
« Ball or roller
bearings
« Arms and ammunition for
private use
- The excise duty structure on matches
comprises rates of duty ranging from 25 paise to Rs 2.40 per hundred
boxes of 50 sticks each. I propose to rationalise the existing rates to
a more rational structure with a duty rate of 50 paise for the handmade
sector, Re.1 for the middle sector, Rs 2 for the semi-mechanized sector
and Rs 3 for the mechanized sector.
Mr. Speaker, Sir, in the matter of
rates of duties of excise I have almost achieved the ultimate with only
one basic rate of CENVAT and one rate of special excise duty. The
procedures in excise have also been made modern. I can humbly claim that
excise duty is now a model of value added tax up to the manufacturing
stage.
The only issue, which remains to
be tackled now, is the issue of individual exemptions. The regime of
exemptions is incompatible with a simple, equitable and rational tax
structure that has now been put in place. I am not doing away with the
exemptions altogether, realizing that this may come as a sudden shock to
those who are accustomed to exemptions. However, I will like to give
notice to them to be prepared to pay duties like anyone else. For the
present, I am making a modest beginning by imposing a nominal duty of 4%
on some items like goggles, imitation jewellery, rubberized mattresses
etc. which in four equal annual installments will be taken to 16%. More
and more items will be put on this escalator every year.
Structural changes have taken
place in the economy with the service sector growing faster than other
sectors. I am expanding the net of service tax and I propose to add the
following services to the list of taxable services:
l Specified Banking and
Financial Services
l Authorized Service Stations
for servicing of vehicles including two wheelers
l Port Services
l Broadcasting
Services
l Photographic
Services
l Convention
Services
l Sound Recording
Services
l Scientific and Technical
Consulting Services
l Telex Services
l Telegraph
Services
l Facsimile
Services
l On-line Information &
Data Base Retrieval services
l Video Tape Production
Services
l Services auxiliary to
Insurance
I propose to bring the service
provided to lease circuit line holders also in the tax net.
I now turn to my proposals
relating to customs duties.
In my previous budgets, I have
reduced the total number of major customs duty rates to four, that is,
35%, 25%, 15% and 5%. I do not wish to propose any further reduction in
the number of customs duty rates this year. However, I propose to
discontinue the surcharge of 10%. With this, peak level of customs duty
will decline marginally from 38.5% to 35%.
All agricultural produce already
attracts the peak rate of duty of 35% or more. Current tariffs on major
cereals are: Wheat (50%), Rice (70%/80%) and Maize (50%). I now propose
to increase the customs duty on tea, coffee, copra, and coconut and
desiccated coconut from the present 35% to 70%.
Similarly, I propose to increase
the rate of duty on crude edible oils ranging from 35% to 55% at present
to a uniform rate of 75% and on refined oils from 45%/65% to 85%. A
lower rate of 45% would apply to soyabean oil on account of WTO binding.
I also propose to enhance the rate of customs duty on the import of
crude palm oil by vanaspati manufacturers from 25% to 55% and restrict
this concession to sick vanaspati units only. The others will pay 75%. I
wish to assure the House that in order to safeguard the interest of our
farmers we shall move swiftly whenever any perceptible threat on account
of imports is noticed.
The House is aware that Government
has committed itself to abolish customs duty on IT and telecom products
and their inputs and components under the ITA 1 Schedule by 2003. The
customs duty on these products is proposed to be reduced to 15% from 1,
March 2001 from current levels.
Mr. Speaker, Sir, with the
abolition of the remaining Quantitative Restrictions in April this year
second hand cars will also become freely importable. To allay the fears
of surge in import of second hand cars, the rate of basic customs duty
on their import will be raised to 105%, which is three times the peak
rate. The total duty now applicable to second hand cars will be more
than 180%. I propose a similar structure of duty for the import of old
multi utility vehicles, scooters and motor cycles.
In order to provide a level
playing field for domestic liquor producers, I propose to levy CVD at a
suitable rate on imported liquor, taking into account the levies of
state excise on domestic production.
Our textile industry has to
modernize itself and acquire the latest technology in order to face
global competition and attain high quality of production. I propose to
reduce the basic customs duty on specified textile machines, including
shuttle-less looms, from 15% to 5%. As a measure of further relief to
the textile sector, I propose, to reduce the customs duty on silk waste,
cotton waste and flax fibre from 35% /25% to 15%.
There are some cases of anomaly in
customs duty between raw materials and intermediate goods on the one
hand, and intermediate goods and final products on the other. DMT, PTA,
MEG and Caprolactum are raw materials for production of man-made fibers
and yarns. However, the customs duty on these materials is higher than
the rate applicable to fibers and yarn. I propose to reduce the customs
duty on DMT, PTA, MEG and Caprolactum from 25% to 20%, which is the WTO
bound rate for synthetic fibers and yarns. Similarly, soda ash is an
input for the production of glassware, detergents etc. and currently
attracts the peak customs duty of 35% along with the final products. I
propose to reduce it to 20%. I also propose to reduce the customs duty
on polyester chips and nylon chips for the manufacture of fibers and
yarns from 35% to 25%.
- On the same analogy, the customs duty on
high quality DBM, seawater magnesia and fused magnesia is being reduced
from 25% to 15%.
Gems and jewellery have
considerable potential for export. I propose to reduce the customs duty
on cut and polished coloured gem stones from 35% to 15%. I also propose
to reduce the customs duty on specified equipment when imported by
training institutes sponsored by the Gem and Jewellery Export Promotion
Council from 25% to 15%. The rate of customs duty on rough diamonds
would now be 5%.
CNG kits and their parts attract
low duty at 5%. I propose to extend the same treatment to LPG conversion
kits and their parts.
LNG is not produced in India. The
burden of CVD on the import of LNG adds to the cost of LNG projects. I
therefore propose to exempt LNG from CVD.
For the same reason, I also
propose to exempt wattle extract from the application of CVD.
I propose to reduce the customs
duty on cement, and clinkers from 35% to 25%. I am confident that this
reduction would help softening of domestic prices of cement for the
benefit of consumers.
Mr. Speaker, Sir, accredited
pressmen and cameramen are allowed to import cameras, computers, fax
machine etc. up to a value of one lakh rupees for their professional use
without payment of customs duty once in five years. In view of many good
photographs they have taken of use, I propose to reduce this long
waiting period from five years to two years.
In order to encourage better
quality of cinematography I propose to reduce the customs duty on
cinematographic cameras, projectors and certain other related equipment
used by the film industry from 25% to 15%.
In order to discourage smuggling I
propose to reduce the duty on gold from Rs 400 per 10 grams to Rs 250
per 10 grams.
Several industry associations have
pointed out that the CVD on the imported consumer products should also
be charged on the basis of maximum retail price; otherwise it does not
provide a level playing field. I accept the logic of their argument. The
Finance Bill contains the enabling provision to implement this
decision.
I propose to withdraw the
exemption from customs duty on a few items and impose on them a nominal
duty of 5%.
- I have already promised that our customs
tariff would be brought down to East Asian levels. I will like to move
progressively within three years to reduce the number of rates to the
minimum with a peak rate of 20%. The modalities for this will be worked
out in time for the next budget.
- Sir, a number of steps are also being taken
for greater procedural and administrative efficiency.
A new Manual of Procedures and
Instructions on Central Excise and Customs would be brought out by 1,
September 2001. The emphasis would be on simplicity, brevity and
transparency. I also propose to simplify the central excise rules to
make them user friendly.
My proposals on the excise side
are estimated to result in a revenue gain of Rs 4677 crore in a year. On
the customs side my proposals are estimated to result in a revenue loss
of Rs 2128 crore. I estimate that the indirect tax revenue next year
would be Rs 1,40,992 crore.
Copies of the notifications issued
to give effect to the changes in excise and customs duties shall be laid
on the Table of the House in due course.
In Direct Taxes, my thrust during
the last three years has been on providing stability of tax rates,
widening the tax base, rationalizing and simplifying the tax laws and
giving impetus to economic growth. These efforts have resulted in
increasing the direct tax revenue from Rs 46,428 crore in 1998-99 to an
estimated Rs 74,467 crore this year. In addition, the number of
assessees has increased significantly from a little over one crore in
March 1998 to 2.3 crore at the beginning of this year. I, therefore,
propose to continue with the same rates this year also. Co-operative
Societies, however, will henceforth pay 30% tax instead of
35%.
While imposing the surcharge of 10
% on corporates and non-corporates in my budget of 1999-2000, I had
promised that this would be a temporary levy. However, I was constrained
to increase the surcharge on non-corporate tax payers at the higher
income levels to 15% due to the unexpected expenditure burden of Kargil.
During the course of this financial year I had further levied a surchage
of 1% on corporates towards the National Calamity Contingency Fund and
an additional 2% on all tax payers for the Gujarat Earthquake relief. I
now propose to remove all surcharges payable by corporates and
non-corporates except the surcharge of 2 % for relief to quake hit areas
of Gujarat. Individuals having an income of up to Rs 60,000/- will not
be subject to this surcharge.
As a welfare measure, Sir, I
propose to allow 100% deduction for donations to the National Trust for
welfare of persons with autism, cerebral palsy, mental retardation and
multiple disabilities.
Hon’ble Members are aware that the
modified one-by-six scheme, which I introduced in the Finance Act, 1998
to identify potential income-tax assessees and to bring them into the
tax net, has paid rich dividends. I, therefore, propose to extend the
one-by-six scheme to all urban areas in the country as defined by the
1991 Census. Changes arising out of the 2001 census will be incorporated
subsequently.
Certain companies are not filing
their returns of income, presumably on the plea that they are not having
any taxable income. These companies go out of fiscal discipline and
their financial transactions during the initial years escape scrutiny. I
therefore, propose that all companies should file their returns even if
they incur a loss.
Sir, another effective measure of
widening the tax base is to further enlarge the scope of deduction of
tax at source. Income tax at source will henceforth be deductible at the
rate of 10 % on income by way of commission or brokerage exceeding Rs
2,500/-, except on transactions relating to shares and
securities.
Winnings from lotteries, crossword
puzzles etc. are currently taxed at 40%. As the marginal personal income
tax rates have now stabilized at 30%, this income will also now be taxed
at 30%. Television game shows are very popular these days. I wish the
winners well. At the same time, I propose that income tax at the rate of
30% will be deducted at source from the winnings of these and all
similar game shows.
At present, tax is deducted at
source on income from interest on time deposits only if such income
exceeds Rs 10,000/- in respect of deposits with a Bank or Housing
Finance Company and Rs 5,000/- in other cases. These threshold limits
have led to the erosion of tax base and under-reporting of taxable
income due to splitting up of deposits. I, therefore, propose to lower
this limit to Rs 2,500/- in all cases.
With economic liberalization, the
pay package of salaried class is undergoing many changes. It is being
divided into various components and the forms of perquisites and
benefits or amenities provided by the employers are assuming new
dimensions. To align our tax system with the present structure of pay
packages, I propose that the value of perquisites, benefits or amenities
shall be determined on the basis of their cost to the employer, except
in respect of houses and cars where different criteria will be adopted
for simplicity.
Sir, I also propose to provide
relief to salaried persons in the lower income range having income up to
rupees one lakh. Such persons will get an enhanced tax rebate at the
rate of 30% in respect of their eligible investments under section 88 of
the Income Tax Act, as against 20% at present.
In the case of Export Oriented
Units, and units located in Export Processing Zones, Free Trade Zones
and Software Technology Parks 25% of their sales in the domestic market
are currently tax exempt. I propose to provide for the taxation of
profits from these domestic sales of such units.
I.T. Sector continues to do well
and should be encouraged to do better. I, therefore, propose that
profits derived by the units located in the software technology parks
from the export of "on-site" services will be eligible for deduction
like their other export income. Units located outside these zones will
also get the benefit of tax exemption on such export earnings. I further
propose that the condition relating to transfer of ownership of
companies in sections 10A and 10B of the Income-tax Act shall not apply
in respect of companies in which public are substantially
interested.
The income of NABARD, National
Housing Bank and Small Industries Development Bank of India (SIDBI) was
exempted from tax in order to provide fiscal support in the initial
years of their functioning. Now these institutions have come of age and
are working on commercial lines. I, therefore, propose to withdraw the
tax exemption available to these institutions.
The interest payable on certain
External Commercial Borrowings (ECBs) is currently exempt from tax.
Having regard to the fact that interest received by the lender is
taxable in the country of his residence and he would get a credit for
any tax paid by him in India, any exemption from tax liability in the
host country does not benefit the lender but only results in reducing
our tax revenues. I, therefore, propose that the tax exemption in
respect of interest paid on such External Commercial Borrowings will not
be available for such borrowings made on or after the first day of June
2001.
Certain interest income up to a
limit of Rs 12,000 is deductible at present under section 80L. In
addition, income from Government securities is also deductible up to Rs
3,000. I propose to reduce the maximum limit of this deduction to Rs
9,000.
The tax payable on the
distribution of dividends of domestic companies and income in respect of
Units of Mutual Funds and UTI was increased from 10% to 20% last year.
To provide a stimulus to the growth of capital market, I propose to
reduce this tax to 10%.
To help revive investor-interest
in primary issues I propose to exempt long-term capital gains arising
from the sale of securities and Units if such gains are reinvested in
primary issues of shares of public companies.
Sir, the tax incentives in the
form of tax holidays for infrastructure facilities are proposed to be
further rationalized and enlarged. For the core sectors of
infrastructure namely, roads, highways, rail system, water treatment and
supply, irrigation, sanitation and solid waste management systems, I now
propose a ten-year tax holiday which may be availed of during the
initial twenty years. In the case of airports, ports, inland ports and
waterways, industrial parks and generation and distribution of power,
which also become commercially viable only in the long run, a tax
holiday of ten years is being proposed to be availed of during the
initial fifteen years. The period of commencement of business for power
and industrial parks is also being extended up to 31, March
2006.
The five-year tax holiday and 30 %
deduction for next five years was available to the telecommunications
sector till 31, March 2000. I propose to reintroduce this concession
retrospectively for the units commencing their operations on or before
31, March 2003. These concessions will also be extended to internet
service providers and broadband networks.
Sir, in addition to the tax
holiday proposed for development of infrastructure, tax incentives have
also been provided for the investors providing long-term finance or
investing in the equity capital of the enterprises engaged in
infrastructure facility. Any income by way of interest, dividends or
long-term capital gains from such investments is fully exempt. I propose
to extend this concession to guarantee commissions and credit
enhancement fees earned by financial institutions from infrastructure
enterprises. Co-operative Banks will also be eligible for exemption of
their income from investments in approved infrastructure
facilities.
To be globally competitive, our
companies need to increase their investment and expenditure for Research
and Development. Currently, a weighted deduction of 150% of the
expenditure on in-house research and development in certain areas is
allowed to companies. Sir, I propose to extend this weighted deduction
to biotechnology as well for clinical trials, filing patents and
obtaining regulatory approvals. I also propose that the entire amount
paid to specified projects under the India Millennium Mission, 2020 will
be eligible for 125 % weighted deduction.
To encourage development of
industrial infrastructure, I had provided 100% deduction of export
profits for a period of ten years to units operating in the Special
Economic Zones last year. I now propose to give further tax incentives
for the development of these zones. The concessions available for
infrastructure by way of a 10-year tax holiday will be available to the
developers of Special Economic Zones on the same lines as developers of
industrial parks. The income of investors making long term investment
for the development of SEZs will also be exempt.
The storage of food grains and
their transportation are our major concern. Sir, I propose to provide a
tax holiday for five years and 30% deduction of profits for the next
five years to the enterprises engaged in the integrated business of
handling, transportation and storage of food-grains.
Sir, for promoting the industry
that provides the cup that cheers, I propose to increase the development
allowance available for tea from 20% to 40%. This additional allowance
will be used only for re-plantation, rejuvenation, and modernization of
tea plantations and processing facilities.
There has been a long-standing
demand from the Shipping Industry that the rate of depreciation
available in respect of ships and inland water vessels may be increased.
I propose to increase this rate of depreciation to 25%.
To encourage investments in
weaving, processing and garment sectors of the textile industry, I
propose to allow accelerated depreciation at the rate of 50% on plants
and machinery purchased under the Technology Up-gradation Fund
Scheme.
In order to give a boost to the
commercial vehicles sector presently facing recession, I propose to
allow accelerated depreciation at the rate of 50% on new commercial
vehicles for one year.
Each of my past three budgets has
provided for increasing tax incentives for the housing sector. Sir,
continuing with this practice, I propose to further increase the maximum
amount of deduction available for interest payable on housing loans for
self-occupied houses from rupees one lakh to rupees one and a half
lakhs.
For persons having income from
house property, the present deduction of 25 % of annual value for
repairs etc. is proposed to be enhanced to 30%. However, there will be
no further deductions, except for the expenditure incurred by way of
interest payment on housing loans.
I propose to extend the tax
incentives allowed by way of deduction or rebate on payments of LIC
premium to all insurance companies that have been approved by the
Insurance Regulatory and Development Authority.
The presence of multinational
enterprises in India and their ability to allocate profits in different
jurisdictions by controlling prices in intra-group transactions has made
the issue of transfer pricing a matter of serious concern. I had set up
an Expert Group in November 1999 to examine the issues relating to
transfer pricing. Their report has been received, proposing a detailed
structure for transfer pricing legislation. Necessary legislative
changes are being made in the Finance Bill based on these
recommendations.
The foreign telecasting channels
will henceforth be taxed in India, on their income computed in
accordance with the provisions of the Income-tax Act.
Sir, I propose to bring about a
number of measures that will be friendly to the taxpayer. The time
limits for issue of refunds, reassessment and reopening of assessments
by the Income-tax Department are proposed to be reduced. The Department
will also no longer have power to withhold the refund due to an
assessee. Similarly, there will be no requirement to obtain a Tax
Clearance Certificate under section 230A from the Assessing Officer
before transfer of immovable property. I also propose to remove the
discretion presently available in deciding the quantum of penalties.
Henceforth, a fixed amount of penalty will be leviable for most of the
defaults.
Certain educational and medical
institutions are required to be approved for claiming tax exemption. At
present, these institutions have to file their application for approval
to the Central Board of Direct Taxes. Sir, I propose to delegate this
power to Chief Commissioners of Income-tax.
To sum up, Sir, my proposals made
in this Budget on the Direct Taxes will result in a revenue loss of Rs
5,500 crore, which I propose to make up with tax buoyancy and increased
voluntary compliance. I estimate that the direct tax revenue in
2001-2002 would be Rs 84,800 crore.
Mr. Speaker, Sir, with these
proposals I estimate total tax revenue receipts for the Centre at Rs
163031 crore and the fiscal deficit at Rs 116314 crore or 4.7% of GDP. I
could have managed a lesser fiscal deficit but that would have been
possible only at the cost of growth, which was unacceptable.
This is a budget for carrying
forward the second generation of economic reforms. This is a budget for
growth. This is a budget for equity with efficiency. This is a budget
for a new deal to the people of India in the new millennium.
Mr. Speaker, Sir, with these
words, I commend the budget to this august house.
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