Highlights: Union Budget 2013-2014 of India

UNION FINANCE BUDGET OF INDIA 2013-14 

• Rs 14,000 crore capital infusion into public sector banks in 2013-14
• Rs 5,80,000 crore to states and Union Territories
• Rashtriya Swasthya Bima Yojana (RSBY) scheme to include rickshaw pullers, taxi drivers and rag-pickers.
• National Institute of Sports Coaching to be set up in Patiala at a cost of Rs 253 crore.
• Rs 6,000 Crore to be allocated for rural housing fund in 2013-14.
• Standing Council of Experts in Ministry of Finance to examine transaction cost of doing business in India
• Financial Sector Legislative Reforms Commission (FSLRC) to submit its report in a month.
• Rs 5400 crore to department of space and Rs 5600 crore to department of atomic energy.
• Defence to get Rs 2,20,000 crore, 86721 crore for capital expenditure.
• National Skill Development Corporation to train 5 crore people in current plan period.
• Rs 11500 crore for backward areas
• All towns of India with a population of over 10000 to have an LIC office. 
  
  DEVELOPMENTS
  
• 17 per cent hike in education, 22 per cent in agriculture, 46 per cent for rural development.
• All public sector bank branches will have an ATM
• Coal imports during Apr-Dec 2012 crossed 100 million tonnes and expected to go up by 185 million tonnes in 2016-17
• Policy on exploration of shale gas on the anvil; natural gas pricing policy will be reviewed and uncertainty removed. 
• Govt to set up India's first women's bank as a public sector bank by October. 
• Rs 80194 crore for rural development projects
• Green revolution in east India significant. Rice output increased in Assam, Odisha, Jharkhand and West Bengal; Rs 1,000 crore allocated for eastern states.
• Rs 5,387 crore to be allocated for integrated water-shed programme for farmers in 2013-14, an increase from Rs 3,050 crore in the current fiscal.
  
  
  Planning
  
• Tax free bonds issue to be allowed up to Rs 50,000 crore in 2013-14 strictly on capacity to raise funds from the market.
• Rs 5,000 crore will be made available to NABARD to finance construction of godowns and warehouses.
• PPP project with Coal India in the pipeline to stem the outflow of forex.
• Rs 500 crore allocated for programme on crop diversification.
• Eastern Indian states to get Rs 1,000 crore allocation for improving agricultural production.
• Rs 7 lakh crore target fixed for agri credit for 2013-14 compared to Rs 5.75 lakh crore in the current year.
• Coal imports to rise to 185 million tonnes from 100 million in four years.
• Inflation indexed bonds and NSCs to be introduced
• Zero custom duty for electrical machinery
• Income level for Rajiv Gandhi Equity Scheme raised by Rs 2 lakh
• First home loan up to Rs 25 lakh will get an additional Rs 1 lakh interest deduction
• Battle against inflation must be fought at all fronts.
• Faced with huge fiscal deficit, I have no choice but to rationalise expenditure: FM
• Plan expenditure in 12th Five Year Plan revised to Rs 14,30,825 crore or 96 per cent of budgeted expenditure
• Budget expenditure is Rs 16,65,297 crore and Plan expenditure Rs 5,55, 322 crore.
• The revised expenditure target is Rs 14,30,825 crore or 96 per cent of Budget estimate for this fiscal. In 2013-14, the budget estimate is Rs 16,65,297 crore
  
  Allocations
  
• Allocates Rs 41,561 crore for SC sub-plan; Rs 24,598 crore for tribal sub plan
• Rs 3511 crore allocated to Minority Affairs Ministry which is 60 per cent of the revised estimates.
• Rs 110 crore to be allocated to the department of disability affairs.
• Rs 1069 crore allocated to Department of Aryush
• Rs 13,215 crore to be provided for mid-day meal scheme
• Rs 5,284 crore to various Ministries for scholarships for SC/ST, OBC and minority students
• Medical colleges in six more AIIMS-like institutions to start functioning this year; Rs 1650 crore allocated for the purpose.
  
  
• Need $75 bn to bridge current account deficit
• Average economic growth rate in 11th Plan period is 8 per cent, highest ever in any Plan period: FM. 
• Current account deficit is a bigger worry; fuel and gold imports responsible
• Foreign investments must be encouraged.
• Accelerating growth is the main goal.
• Core inflation is down to 4.2 percent, Food inflation remains a worry.
• Global economic growth slowed from 3.9% in 2011 to 3.2% in 2012
• Only China and Malayasia are the major countries that grew faster than India last year.
  
  TAXES
• No revision in tax slabs
• Surcharge of 10% for taxable incomes above Rs.1 crore
• Tax credits of Rs.2000 to every person who has total income up to Rs.5 lakh
• Education cess continues at 3%
• Duty for Imported SUV cars and Imported Bikes hiked    
  
  
  

Global Recession and India

Global recession is a period of economic slowdown. Global recession can be defined by taking many factors into account. It creates a great depression in the global economy in terms of money and employment.

The financial crisis of 2007–2009 has been called by leading economists the worst financial since the one related to the Great depression of the 1930s. Several company bailouts, company failures etc...


It had a great impact on high-tech industries in India, which based on US markets. This was bad news. The Indian tech and business process outsourcing (BPO) services industry is strongly dependent on North America, and specifically on the sector that we call 'BSFI' - banking, financial services, and insurance.


There is increasing pressure on companies to minimize their 'bench' or the currently idle employees. Several cost-cuts etc. There went tough competition among companies to maintain the quality measures.


Lehman Brothers went bankrupt September 15 2008. A day earlier, Merrill Lynch had announced that Bank of America was acquiring it.



Based on survey of IMF on recession and financial crisis. Recessions associated with financial crises are typically severe, long lasting. There is a chance of recovery in the fourth quarter.

Indian Economy

Indian Economy

India’s mixed economy combines features of both capitalist market economy and the socialist planned economy, but has shifted more towards the former over the past decade. The public sector generally covers areas which are deemed too important or not profitable enough to leave to the market, including such services as the railways and postal system.

The economy of India is based on Agriculture, handicrafts, textile, manufacturing, and a multitude of services. Two-third of Indian workforce still earning their livelihood directly or indirectly through agricultural services, this is a very well-known fact. The economy of India, measured in USD exchange-rate terms. Due to increase in number of educated populace the country became one of the outsourcing hubs. So the Information technology in India is playing a pivotal role in Indian economy.

The government was strict in control over private sector participation, foreign trade, and foreign direct investment. Early in 1990, India has gradually opened its markets through economic reforms by reducing government controls on foreign trade and investment.

The economy if India is based in part on planning through its five-year plans. It is developed, executed and monitored by the planning commission. The tenth five-year plan completed its term in March 2007 and the eleventh plan is currently underway.

First plan – 1951-1956
Second plan – 1956-1961
Third plan – 1961-1966
Fourth plan – 1969-1974
Fifth plan – 1974-1979
Sixth plan – 1980-1985
Seventh plan – 1985-1989
Between period– 1989-1991
Eight plan – 1992-1997
Ninth plan – 1997-2002
Tenth plan – 2002-2007
Eleventh plan – 2007-2012

The higher growth rates are resulted in sectors like, manufacturing, pharmaceuticals, biotechnology, nanotechnology, telecommunications, shipbuilding, aviations, tourism, and retailing. India faces a fast-growing population and the challenge of reducing economic and social inequality. Poverty plays a serious and problematic role.