Union Budget 2010: An Overview

The revised Union Budget was announced by the Finance Minister, Pranab Mukherjee at the end of February, 2010. The budget has bought with it several reasons to celebrate as well as lament. While the budget, like the previous ones, is aimed at empowering the ‘aam admi’ (common man), its outcome on the average individual’s pocket is debatable.

Union Budget 2010: Allocation of Budget for Public Development Sectors

Overall, the budget allocation across various public development sectors has been higher than the previous budget.

While Defence continues to be the major investment avenue in the new budget, allocation in the following sectors has been given greater attention:

Union Budget 2010: Pros and Cons

The most important (and unexpected) revision to the previous budget has been the widening of tax slabs. During the previous assessment year, salaried employees with an annual income of Rs.5,00,000 were liable to pay a 30% tax. This income limit has been raised to Rs.8,00,000, enabling to save as much as Rs.50,000.

While savings from the new budget appears to be significant, higher indirect taxes could shrink its overall impact. The rate of excise duty has been increased to 10.3% from 8.24%. Major products that have become dearer due to the budget revision are:

• Imported gold bars and coins
• Petrol and diesel
• Cigarettes
• Large cars and multi-utility vehicles
• Health and hygiene products
• Domestic flights

According to chief economic advisor, Kaushik Basu, the budgetary revisions are non-inflationary. Basu clarified that the impact of indirect taxes is likely to be short-term, but will help to reach a desired GDP rate of 9%.