Economy and Business  

What is India News Service, July 9, 2004, 1700 hrs IST

The Indian Corporates and Industry have acknowledged the Union Budget 2004-05 with its focus on agriculture and infrastructure. The industry feels that given the short notice to come up with a balanced budget, the Finance Minister has 
at least addressed several issues although some sectors seemed ignored.

The news of the turnover tax sent the BSE Sensex crashing by 2.3 per cent or 112 points, to close at 4,844. The new tax has proved costly, as the budget reduced investor wealth by Rs 36,000 crore, to Rs 10,28,588 crore. Imposition of a 0.15 per cent turnover tax on buyers was the biggest hit for the market, while lack of any positive measures added to the bearish trend further.

The Budget Highlights: Exemption limit on Income Tax doubled to Rs 1 lakh, 14 million people off the hook. Small savings interest rate stays at 8 per cent, senior citizens still get 9 per cent. Long term capital gains goes (but taxes slapped on securities deals).2 per cent education cess across all taxes - direct, indirect, service. Service tax rate hiked by 2 per cent to 10 per cent, net widened to 13 more. To stop misuse, gifts from unrelated persons over Rs 25k to be taxed as income. Telecom, insurance, aviation FDI limit hiked, FII debt cap up. Defence budget hiked 28 per cent, the sharpest in over 25 years. 85 more items out of SSI list, loans and subsidies cheaper. Excise on computers goes, and has reduced by half on meat, poultry and fish products. Big incentives for agri-businesses from cheap tractors to soft loans. Students can take loans upto Rs 7 lakhs without any security.