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March 1st, 2008

President Patil reaffirms inclusive growth path

Saying that "India is on the move", President Smt. Pratibha Devisingh Patil on February 25 underlined the government's commitment to "inclusive growth" as she unveiled plans to enhance investment in education, agriculture, health and rural development in her maiden address to the Joint Session of Parliament.

"The Parliament convenes at a time when the economy is on the move. My government remains firmly committed to ensuring that the economic growth process is socially inclusive, regionally balanced and environmentally sustainable," Smt. Patil said in her address.

"The measures taken by my government have created the necessary architecture of inclusive growth," she stressed in her address, which serves as a defining policy statement by the government for the year.

Smt. Patil then went on to list a slew of schemes launched by the government to achieve the objective of "socially inclusive and regionally balanced growth", including Bharat Nirman, the National Rural Employment Guarantee Act, Sarva Shiksha Abhiyan (Education for All programme), the National Rural Health Mission and the Jawaharlal Nehru National Urban Renewal Mission. Setting an upbeat tone for robust economic growth, the President stressed on the government's strategy of blending inclusive development with the acceleration of economic growth. "For the first time in history, the Indian economy has grown at close to nine percent per annum for four years in a row," she said. "The historically high investment rate, of over 35 percent of GDP, and savings rate, of over 34 percent of GDP, symbolise a new dynamism in our economy."

The President also emphasised on the government's resolve to continue on the path of economic growth while keeping prices under check.

Holding out high hope for sustained economic growth, she said: "I am confident that the creativity, enterprise and hard work of our young people will be able to sustain these high rates in the years to come."

"India is on the move. There is an air of optimism among our youth and of expectation among the less-privileged sections of society. The challenge before us is to sustain the development process in the face of external and internal threats. The people of India have the potential to fuel the engine of global growth," she said while alluding to the threat of terrorism facing the nation and the world. Inclusive growth, however, remained key to the President's Address. Smt. Patil announced an increase in outlay on education from 7.68 percent of the Central Gross Budgetary Support in the 10th Plan to over 19 percent in the Eleventh Plan.

"The outlays on agriculture, health and rural development have been tripled," she said. "Taken together with education, these sectors account for more than half of the Central Gross Budgetary Support as compared to less than 1/3rd in the Tenth Plan," she added. "This is a major structural shiftin plan priorities, aimed at reducing disparities and empowering people," the President stressed.

Highlights of Union Budget 2008-09

  • Rs. 600 billion agricultural debt relief package; complete loan waiver for small and marginal farmers
  • Rs. 2,800 billion target set for farm credit in 2008-09
  • An Irrigation and Water Resources Finance Corporation to be set up
  • Rs. 39.66 billion for schemes for SCs and STs; Rs. 189.83 billion for schemes earmarking 20 percent funds for SCs and STs
  • A national programme to be launched for the elderly
  • Special mechanism for north-eastern border areas
  • Government to establish 16 central universities, three IITs, two IISERs and two Schools of Planning and Architecture
  • New scholarship scheme for promoting innovations in science
  • Rs. 10 billion provided for Aam Admi Bima Yojana
  • Government to provide Rs. 164.36 billion as equity support and Rs. 30.03 billion as loans to Central public sector enterprises
  • Income tax exemption limit hiked to Rs. 1.5 lakh; 10 percent tax for income between Rs. 1.5 lakh and Rs. 3 lakh; 20 percent between
  • Rs. 3 lakh and Rs. 5 lakh. Income above Rs. 5,00,001 to attract 30 percent income tax
  • Exemption limit for women tax payers increased to Rs. 1,80,000 and for senior citizens to Rs. 2,25,000
  • No change in corporate income tax rates and surcharge
  • Customs duty on project imports slashed from 7.5 percent to 5 percent
  • Duty on steel and aluminium scrap abolished
  • Excise duty on pharmaceutical sector reduced from 16 percent to 8 percent
  • Small cars, two and three wheelers, buses and their chassis to cost less.
  • Non-filter cigarettes to cost more, excise on non-filter cigarettes will be at a par with that on filter cigarettes.
  • Revenue deficit estimated at Rs. 551.84 billion
  • Fiscal deficit pegged at 2.5 percent of GDP.

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Railway Budget highlights

  • Double digit growth in traffic earnings maintained in first nine months
  • Growth in passenger earnings 14 percent
  • Expected growth in goods earnings 14 percent
  • Gross Traffic Revenues 16 percent higher than the previous year and 2 percent higher than the Budget Estimates
  • Return on Capital - an all time high of 21 percent
  • Cash surplus before dividend expected to be a record Rs.250 billion
  • Net revenue expected at Rs. 184.16 billion and surplus after payment of dividend expected at Rs.135.34 billion
  • Freight loading target: 850 million tonnes
  • Revenues in freight earnings to be Rs.527 billion; Passenger earnings to be Rs.216.81 billion
  • Gross traffic receipts to be Rs.819.01 billion - an increase of 12.6 percent over RE
  • 10 new Garib Raths to be introduced
  • 53 pairs of new trains.

Direct tax Collections

Direct tax collections continued to record a growth of over 40 percent for the period between April 1, 2007 to February 15, 2008 in the current fiscal.

Net direct tax collections stood at Rs. 2287.45 billion, up from Rs. 1617.76 billion during the same period last fiscal, registering a growth of 41.40 percent and achieving over 85 percent of budgeted direct tax target of Rs. 2674.90 billion. Corporate tax registered a growth of 38.78 percent at Rs.1380.73 billion, up from Rs. 994.88 billion during the previous fiscal, while personal income tax (including FBT, STT and BCTT) grew by 45.64 percent at Rs. 903.56 billion, up from Rs. 620.40 billion. Growth in Securities Transaction Tax (STT) was 84.64 percent (Rs. 78.78 billion against Rs. 42.67 billion) and Fringe Benefit Tax (FBT) was 29.75 percent (Rs. 52.16 billion against Rs. 40.20 billion).

India tests ballistic missile

India on February 26 test-fired an indigenously developed nuclear-capable submarine-launched ballistic missile (SLBM) from an undersea location off the Orissa coast, an official source said. The missile was launched around 1 P.M. and it was the sixth test of the 700-km range Sagarika missile.

Since the Indian Navy does not have a submarine capable of firing an SLBM, the test firing was conducted from an underwater launcher positioned 50 metres under the surface of the sea and 8 km off the Orissa coast.

8.74 mn more telecom users

India, the world's fastest growing telecom market with the lowest call tariffs, added a whopping 8.74 million subscribers in January, official data released on February 22 said. With this, the total number of telephone connections stood at 281.62 million at the end of January 2008, compared to 272.88 million in December 2007, the Telecom Regulatory Authority of India (TRAI) said. The overall tele-density rose to 24.63 percent in January 2008.

The wireless segment saw a surge of 8.77 million subscribers last month compared to 8.17 million in December. "This is the highest ever addition in a month till date," TRAI said.

Submersible capsule developed

The National Institute of Ocean Technology (NIOT), Chennai, an autonomous institute under Ministry of Earth Sciences (MoES), has designed and developed a remotely operated unmanned submersible capsule, which is 2.53 m long, 1.80 m wide with height of 1.70 m. The capsule can carry a payload of 150 kg. All hardware and software for the instrumentation and control system was developed by Indian scientists. This was stated by Union Minister for Science & Technology and Earth Sciences, Kapil Sibal, in the Lok Sabha on February 26.

On the other pages

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