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i.Income Tax Concessions to Cost Rs 26,000 crore
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The proposals in respect of direct taxes include the lowering of rates of personal income tax over certain income slabs, a reduction in surcharge on corporate income tax from 10 per cent to 7 per cent, and concessions for corporate business entities in various forms. All these taken together are estimated by the Finance Minister to result in a revenue loss of Rs.26,000 crore.
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ii.Modest Allocation to Agriculture
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The Central Plan outlay for rural development in 2010-11 is Rs.55,190 crore as against the B.E. of Rs.51,769 crore in 2009-10.
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| The outlay for agriculture, irrigation and flood control taken together has been enhanced from Rs.11,068 crore in B.E. 2009-10 to Rs.12,834 crore in 2010-11, a modest increase in real terms. Considering the persistence of an agrarian crisis across the country for over a decade now (though the intensity varies across States and regions and different social classes in the agrarian population), this is a very inadequate response. |
Note: |
Instead of giving income tax concessions to the rich to the tune of Rs 26,000 crore, the same amount could have been invested in development of rural infra and improving yields in the Eastern States & to improve yields of pulses in dry land agriculture. |
| iii.Tax Subsidies cross Rs 5 lakh crore mark |
Tax revenue forgone on account of exemptions under corporate income tax amounted to more than Rs.1,31,000 crore between 2007 and 2009 while the corresponding figure in respect of exemptions under personal income tax was nearly Rs.68,000 crore.
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| Corresponding figures for revenue forgone on account of exemptions under excise and customs duties taken together amounted to more than Rs.2,41,000 crore in 2007-08 and Rs.3,54,000 crore in 2008-09. |
During 2009-10, the tax revenues forgone on account of exemptions provided in last year’s Budget amount to (nearly) Rs.80,000 crore in respect of corporate income tax, Rs.41,000 crore in respect of personal income tax, and Rs.4,20,000 crore in respect of excise and customs duties taken together.
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Note: |
Instead of giving tax subsidies to corporates, at least half the amount of the tax subsidies could as well have been invested in power generation & infra development, crying need of the hour.
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iv. Make MSPs reach Small Farmers
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When the economic survey discusses the issue of minimum support prices, it refers to the inability of small and marginal farmers to access markets, and uses this argument to question the efficacy of higher MSPs! One would have thought that policymakers would worry about how to ensure that the benefits of MSPs reach small and marginal farmers rather than to suggest that MSP increases are undesirable or necessarily ineffective as a means of benefiting these sections.
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| v. Focus on Agri Research |
| The Survey expresses concern over the relative stagnation in farm productivity and argues for a greater policy focus on agricultural research. At the same time, it laments the decline in private sector investment in agriculture and wants this trend “…to be reversed through the creation of a favourable policy environment and availability of credit at reasonable rates on time for the private sector to invest in agriculture”. |
| 2.
Pulses Production in India |
India is largest producer of pulses in the world with 25 per cent share in global production. Chickpea, pigeon pea, moong, urad, lentil are important pulses crop contributing 39 per cent, 21 per cent, 11 per cent, 10 per cent, 7 per cent to the total production of pulses in the country. The total production was estimated 14.56 million tonnes and an area of 23.63 million hectares with average productivity 625 kg/ha. |
| 3.
Cotton ruling above minimum support price |
The area under white gold has swelled to 101 lakh hectares in 2009-10 from 94.06 lakh hectares a year ago. The Cotton Advisory Board has estimated the output at 295 lakh bales this season. Indian cotton is witnessing steep increase in demand this cotton year (from October 2009), due to crop failure in the US and China. Shankar 6 for instance is currently quoting between Rs 3,400 and Rs 3,600 a quintal against Rs 2850 in 2008-09. |
| Also cotton exports during the current marketing year (from October 2009) are estimated to touch 55 lakh bales compared with 35 lakh bales last year. BL 190310 |
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4. RBI-Working Group Report Credit Guarantee Scheme of the Credit Guarantee Fund Trust for MSEs |
| The limit for collateral free loans to the MSE sector to be increased from the present level of Rs. 5 lakh to Rs.10 lakh and be made mandatory for banks. The guarantee fee for collateral free loans up to Rs.10 lakh to Micro Enterprises to be borne/ absorbed by the CGTMSE. The guarantee cover up to 85% of the amount in default to be made applicable to credit facilities to Micro Enterprises up to Rs 10 lakh. |
| Note: |
| As recommended by Arjun Sengupta Commission, similar scheme should be put in place to cover Agricultural loans also. The limit of collateral free agri loans should be increased from Rs 50,000 to Rs 5 lakhs and 10% of the total credit of banks should be extended to small and marginal farmers. |
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5. Bank credit grows around 16% year-on-year |
| Bank credit as on February 26 increased by Rs 4,21,395 crore to Rs 30,98,323 crore, from Rs 26,67,928 crore last year. |
| During the fortnight deposits also increased by Rs 63,487 crore to Rs 43,63,330 crore from Rs 42,98,843 crore. Investments decreased by Rs 14,896 crore to Rs 13,79,296 crore from Rs 13,94,192 crore. |
| KRSR/150310 |
