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Tuesday, 18 Feb 2014
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Interim Budget 2014-15 provides for Rs 5.5 trillion of plan expenditure


The Union Finance Minister, P. Chidambaram has presented the Interim Budget 2014-15 in the Lok Sabha, which provides for an estimated plan expenditure of Rs 555,322 crore and non-plan expenditure of Rs 12,07,892 crore for the next year.


Interim Budget_ProjectsToday


The current financial year will end with the fiscal deficit at 4.6 per cent of GDPmp, slightly below 4.8 per cent budgeted for the year, whereas the revenue deficit would be at the budgeted level of 3.3 per cent. Budgeted receipt and expenditure for the next year will leave a fiscal deficit of 4.1 per cent and revenue deficit of 3 per cent.


The plan budget allocations for the next include Rs 82,200 crore for Ministry of Rural Development; Rs 67,398 crore for Ministry of Human Resource Development; Rs 33,725 crore for Ministry of Health and Family Welfare; Rs 21,000 crore for the Ministry of Women and Child Development and Rs 15,260 for Ministry of Drinking Water and Sanitation. Further, an allocation of Rs 48,638 crore has been made for the scheduled caste sub- plan and Rs 30,726 crore for the Tribal Sub-Plan. Gender Budget gets Rs 97,533 crore and the child budget Rs 81,024 crore.


Centrally Sponsored Plan Schemes


Additional Central Assistance of Rs 338,562 crore is proposed to be given to States/ UTs Plans for implementation of the Centrally Sponsored Plan Schemes (CSSs). These schemes are also proposed to be restricted to 66 from the 126 currently in vogue under 17 flagship programmes. Accordingly, Rs 34,000 crore is proposed to be given towards State/UTs Plans for Mahatma Gandhi National Rural Employment Guarantee scheme; Rs 27,635 crore for Sarva Siksha Abhiyan; Rs 13,152 crore for National Programme for Mid-Day meals in schools and Rs 4,965 crore for Rashtriya Madhyanik Shiksha Abhiyan.


Further, for the Integrated Child Development Services (ICDS) a central assistance of Rs 18691 crore will be provided to State/UTs Plans; Rs 16,000 crore would be for rural housing, Rs 13,000 crore for Pradhan Mantri Gram Sadak Yojna, Rs 11,000 crore for drinking water supply, Rs 4,260 crore for rural sanitation; Rs 2,200 crore for National Food Security Mission, and Rs 7,060 crore for the Jawaharlal Nehru National Urban Renewal Mission ( JNNURM).


Budgetary support to railways has been increased from Rs 26,000 crore Rs 29,000 crore in the current budget of 2014-15. Defence gets Rs 224,000 crore (Rs 203,672 crore). A modernization plan at a cost of over Rs 11,000 crore has been made to strengthen the capacity of Central Armed Police Forces.


Rs 11,200 crore has been provided for capital infusion in Public Sector Banks.


Tax proposals


To stimulate growth in the capital goods and consumer non-durables, excise duty rate has been reduced from 12 per cent to 10 per cent on all goods falling under Chapter 84 and 85 of the schedule to the Central Excise Tariff Act for the period up to 30 June 2014.


To give relief to the automobile industry which is registering unprecedented negative growth, excise duty brought down for the period up to 30 June 2014:

  • Small cars, motorcycles, scooters and commercial vehicles; from 12% per cent to 8per cent

  • SUVs; from 30 per cent to 24 per cent

  • Large & Mid-segment Cars; from 27/24 per cent to 24/20 per cent


Accordingly, appropriate reductions would be effected in the excise duty on chassis and trailers.


Excise duties for all categories of mobile handsets have been restructured to encourage domestic production of mobile handsets and reduce the dependence on imports. The rates will be 6 per cent with Central Value Added Tax (CENVAT) credit or 1 per cent without CENVAT credit.


Customs duty structure on non-edible grade industrial oils and its fractions, fatty acids and fatty alcohols has been restructured at 7.5 per cent to encourage domestic production of soaps and oleo chemicals.


Exemption from countervailing duty (CVD) is withdrawn on imported machinery to encourage domestic production of specified road construction machinery.


Concessional customs duty of 5 per cent on capital goods imported by the Bank Note Paper Mill India has been proposed to encourage indigenous production of security paper for printing currency notes.


Loading, unloading, packing, storage and warehousing of rice has been exempted from service tax.


Services provided by Cord Blood Banks have been exempted from service tax.


Non-budget initiatives


The Government has taken step to set-up the Cabinet Committee on Investment and the Project Monitoring Group to speed up the implementation of projects in the country. As result, by the end of January, 2014, the way was cleared for completing 296 projects with an estimated project cost of Rs 660,000 crore.


Rs 8 lakh crore for agriculture credit target has been fixed for the next year. Banks will exceed the target of Rs 7 lakh crore of Agriculture credit fixed for the current year. Interest subvention scheme shall continue in the next year. Under this scheme, a subvention of 2 percent and an incentive for 3 per cent for prompt payment is provided.


Public Sector Enterprises will achieve a new record in capital expenditure of Rs 257,641 crore in 2013-14.


Quote of the week:


P. Chidambaram, Minister of Finance_ProjectsToday
“I can confidently assert that the economy is more stable today than what it was two years ago. The fiscal deficit is declining, the current account deficit has been constrained, inflation has moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased and hundreds of projects have been unblocked.”
P. Chidambaram, Minister of Finance

More quotes on budget


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