Textile industry related budget policies at a glance

26 Feb '10

10 min read

The first challenge before the government is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the 'double digit growth barrier'. Therefore, the second challenge is to harness economic growth to consolidate the recent gains in making development more inclusive. The thrust imparted to the development of infrastructure in rural areas has to be pursued to achieve the desired objectives within a fixed time frame.

He was happy to inform the Honourable Members that the process for building a simple tax system with minimum exemptions and low rates designed to promote voluntary compliance, is now nearing completion. On the Direct Tax Code the wide-ranging discussions with stakeholders have been concluded and confident that the Government will be in a position to implement the Direct Tax Code from April 1, 2011.

On Goods and Services Tax, the govt has been focusing on generating a wide consensus on its design. In November, 2009 the Empowered Committee of the State Finance Ministers placed the first discussion paper on GST in the public domain. The Thirteenth Finance Commission has also made a number of significant recommendations relating to GST, which will contribute to the ongoing discussions and the govt is actively engaged with the Empowered Committee to finalise the structure of GST as well as the modalities of its expeditious implementation and will be his earnest endeavour to introduce GST along with the DTC in April, 2011.

Accelerated development of high quality physical infrastructure, such as roads, ports, airports and railways is essential to sustain economic growth. While addressing the policy gaps in this sector, he proposed to maintain the thrust for upgrading infrastructure in both rural and urban areas. In the Budget for 2010-11, he has provided Rs.1,73,552 crore, which accounts for over 46 per cent of the total plan allocations, for infrastructure development in the country.

He has more than doubled the plan allocation for power sector from Rs.2,230 crore in 2009-10 to Rs.5,130 crore in 2010-11. This does not include allocations for RGGVY, which is a part of Bharat Nirman.

In the words of Mahatma Gandhi "Just as the universe is contained in the self, so is India contained in the villages". For UPA Government, development of rural infrastructure remains a high priority area. For the year 2010-11, he proposed to provide Rs.66,100 crore for rural development.

An effective tax administration and financial governance system calls for creation of IT projects which are reliable, secure and efficient. IT projects like Tax Information Network, New Pension Scheme, National Treasury Management Agency, Expenditure Information Network, Goods and Service Tax, are in different stages of roll out. To look into various technological and systemic issues, he proposed to set up a Technology Advisory Group for Unique Projects under the Chairmanship of Shri Nandan Nilekani.

The President, in her address to the Parliament in June 2009, had declared this decade as the Decade of Innovation. Last year, he extended the scope of weighted deduction on expenditure incurred on in-house research and development (R&D) to all manufacturing businesses except for a small negative list. To further encourage R&D across all sectors of the economy, he now proposes to enhance the weighted deduction on expenditure incurred on in-house R&D from 150 per cent to 200 per cent. He also propose to enhance the weighted deduction on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research from 125 per cent to 175 per cent.

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