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Borrowing up by nearly 2.5 times; expense on defence goes up

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Press Trust of India New Delhi
Last Updated : Jan 20 2013 | 10:14 PM IST

The government will rely heavily on borrowings to finance its various flagship schemes as the target for this head has been increased to 34 paise of every rupee from 14 paise projected in the last Budget.     

On the expenditure side, the major head of expense is central plan which would take away 20 paise of every rupee earned followed by interest payment of 19 paise.     

Defence allocation has also been increased to 12 paise for the current fiscal from 11 paise in 2008-09. The increase is mainly on account of implementation of the Sixth Pay Commission and higher provisioning for pensions.     

As the single largest source of income, the collection from corporate tax has been pegged at 22 paise, lower from 24 paise in the previous fiscal, according to the Budget for 2009-10 tabled in Parliament today.     

In the wake of slowdown, collection from income tax has also been lowered to 9 paise from 15 paise estimated by 2008-09 Budget.     

At the same time, indirect tax, including service tax and other, would contribute 22 paise against 35 paises collected in the previous fiscal.    

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As a part of the contra-cyclical measure to boost economy, the government will spend 10 paise on subsidies compared to 8 paise last fiscal. 

Other non-plan expenditure has also been increased by 40 per cent to 14 paise for the current fiscal while the states' share of taxes and duties would take away 14 paise of every rupee earned compared to 10 paise in the last fiscal.     

On the earning side, non-tax revenue will contribute 12 paise to a rupee earned, while one paise would come from non-debt capital receipts.     

As part of the indirect taxes, customs and excise would garner 17 paise each, while service tax and other taxes would be 5 paise of every rupee earned.     

Of this, excise will contribute 9 paise compared to 15 paise projected in the last fiscal due to a slowdown in the industrial productions.     

At the same time, customs has also been moderated substantially to 8 paise vis-a-vis 13 paise projected in last year's Budget.     

On the expenditure side, non-plan assistance to state and union territories has been pruned to 4 paise against 5 paise in the last Budget while the plan assistance to state and union territories has been kept unchanged at 7 paise for each rupee spent.

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First Published: Jul 06 2009 | 2:20 PM IST

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