Budget 2014: As it happened
Excise duty on consumer durables has been reduced to 10 pc, small cars to 8 pc, SUVs to 24 pc, medium cars to 20 pc and 2-wheelers to 8 per cent.
New Delhi: 12:07 pm: Towards the end of his speech, Chidambaram says, "140 million moved out of poverty during UPA-I and UPA-II regime and we are legitimately proud of it."
12:05 pm: Excise duty on mobile handset will be 6 pc on CENVAT credit to encourage domestic production.
12:02 pm: Excise duty has been reduced from 12 per cent to 10 per cent for capital goods and consumer durables. Excise duty cut for small cars is down to 8 per cent from 12 per cent. Excise duty on SUVs down by 6 per cent from 30 to 24 per cent. Excise duty on two-wheelers is also down to 8 per cent. Excise duty on medium cars down from 24 per cent to 20 per cent.
11:59 am: Chidambaram has appealed to all political parties to pass GST and DTC.
11:58 am: Chidambaram has announced a moratorium on interest on student loans taken before March 31, 2009. He says it will benefit 9 lakh borrowers.
11:57 am: Chidambaram says that the government is ready with public debt management agency plan.
11:54 am: "FY15 capital infusion in PSU banks will be Rs 11,200 crore," says Chidambaram. "Banks will lend Rs 8 lakh crore to the agricultural sector in FY15," he adds.
11:46 am: The defence budget has also been increased by 10 per cent to Rs 2.24 lakh crore.
11:46 am: Chidambaram says the government has accepted the one rank one pension scheme for the defence forces. "Rs 500 crore will be transferred in 2014-15 for implementing the 'one rank one pay' decision," Chidambaram says.
11:44 am: Chidambaram says that the UPA government remains fully committed to the Aadhaar scheme. "In course of time the critics of Aadhar will realise that this is a tool for empowerment. 57 crore UID numbers have been created so far," he says. FY15 plan expenditure has been kept at Rs 5.55 lakh crore.
11:40 am: Chidambaram has proposed three more industrial corridors - Chennai-Bangalore, Bangalore-Mumbai, Amritsar-Kolkata.
11:38 am: P Chidambaram has announced Rs 200 crore Venture Capital fund for Scheduled Caste entrepreneurs. He has also proposed to contribute another Rs 1,000 crore for Nirbhaya fund for women safety.
11:35 am: Talking about the achievements of the UPA-II, Chidambaram said, "All this was a result of hard work. My mother and Harvard taught me the value of hard work."
11:34 am: "I reject the argument of policy paralysis. UPA I and II have delivered above the trend. History will judge our achievements of past 10 years," Chidambaram said.
11:30 am: Finance Minister P Chidambaram has pegged growth rate for FY 2014-15 at 5 per cent. Report to follow.
11:28 am: P Chidambaram has pegged investment rate at 34.8 per cent and the saving rate at 30.1 per cent.
11:20 am: Talking about the foreign exchange reserves, Chidambaram said, "Expect to add $ 15 billion to foreign exchange reserve in this fiscal."
11:17 am: At the beginning of his speech, Chidambaram says India's challenges are common to all emerging economies. He says the UPA government has put fiscal deficit on top of its agenda. "Food inflation remains the main worry, although it has declined," Chidambaram says. He says fiscal deficit has been contained at 4.6 per cent.
11:15 am: P Chidambaram has begun his interim Budget speech in the Lok Sabha while Seemandhra MPs continue to protest inside the House.
11:01 am: Finance Minister P Chidambaram has tabled the interim Budget 2014 in the Lok Sabha, but is unlikely deliver the speech in the House as Seemandhra MPs continue to disrupt proceedings.
10:53 am: "If House is disrupted, Chidambaram can make statement on any TV," said Parliamentary Affairs Minister Kamal Nath
10:22 am: Finance Minister P Chidambaram has reached Parliament. There are reports that if the Lok Sabha is disrupted, Chidambaram may deliver the budget speech from the Lok Sabha TV studio.
10:10 am: The suspended Andhra Pradesh MPs have said that the Andhra ministers will protest inside Parliament during Finance Minister P Chidambaram's budget speech. "Union ministers will lead the protests in Parliament, they will be in the well of the House," said suspended MP L Rajagopal.
Finance Minister P Chidambaram will present the last interim budget of the UPA-II on Monday in Parliament. Chidambaram will present the vote on account on Monday, giving an estimate of funds required to meet expenditure until a new government is in place.
Chidambaram will give a report card on the economy for the past five years and elaborate on tax collection. No major tax announcements are likely. But the government is likely to announce some incentives to woo voters ahead of elections.
However, the government is also worried about the Telangana-triggered interruption in the House. While the Railway Budget was reduced to a mere 14-minute show, people across the country await Congress-led UPA's last minute attempts to woo the voters ahead of polls.
By tradition, the interim budget does not contain proposals seeking to tinker with direct taxes, nor are there any policy announcements, although there may be some sops for the common man and sectors that need help.
Earlier, Chidambaram had indicated he may tweak excise duties and service tax rates in the interim budget in an apparent bid to boost the economy, but he may not pursue key reform legislation due to lack of political consensus.
"In 2004, Mr Jaswant Singh made a 12-page speech. In 2009, Mr Mukherjee made an 18-page speech. So I have two numbers to choose from between 12 to 18. We can make any proposal short of amending any law," Chidambaram said.
"We cannot propose amendments to the Income Tax Act, Customs Act or the Excise Act. But any proposal short of amending a law can be made. We can also outline a vision for the future," he had said.
It would be interesting to see if Chidambaram continues with the super-rich tax in 2014-15 as well, but indications are he may choose not to since it would need amendment of the law.
In the last Budget, the government imposed a 10 per cent surcharge for a year (2013-14 fiscal) on people earning income above Rs 1 crore. It covered 42,800 individuals and entities.
The minister is expected to use the opportunity to highlight the achievements of the UPA-II government and focus on how the government has been able to contain the fiscal deficit and the current account deficit (CAD), notwithstanding the difficult global situation.
What to expect from the interim Budget
- The interim Budget essentially an economic report card of UPA-II
- Chidambaram will set the fiscal deficit target for FY15 and a roadmap for fiscal discipline
- A possible cut in indirect taxes for troubled sectors is indicated.
- An excise duty cut to revive manufacturing, specially the auto sector is also expected.
- In an election year, there could be more sops for health, food and rural jobs.
- Interest subsidy on bank loans to farmers and exporters could also be extended
- Tax concessions could be offered for some of the poorer regions in the country.
- The government could also defer oil, fertiliser and other subsidies to next year
- Revenues could include proceeds from the recently concluded spectrum auction.