Interim Initiatives

The individual

• DA to be merged with basic pay for govt employees
• Free baggage allowance raised to Rs 25,000, 40% duty on excess baggage
• Standard deduction and income tax exemption limits under study
• Tax exemption on long-term capital gains lapses on March 1
• Central govt's stamp duty halved
• No capital gains tax on farmers selling land to govt

Industry

• BPO: Status quo; no tax on outsourcing of peripheral services
• Tea: Special five-year term loan
• Power: Fiscal sops extended by six years
• Shipping: Tonnage tax regime on the anvil
• Capital goods: Deemed export status for items exempt from countervailing duties
• Sugar: Revitalisation package
• SSIs: Credit limit hiked to Rs 10 lakh

New schemes

• Rs 15,000 cr scheme to revitalise cooperative credit structure
• Rs 25,000 cr defence modernisation fund
• Farm income insurance scheme will be extended to 100 districts

FM SHINING: 2003-04

Macro-economy

• 13% nominal GDP growth
• 4.8% inflation rate

Revenue

• 36% corporation tax growth boosts tax revenue
• Disinvestment target to be exceeded by Rs 1,300 crore

Expenditure

• Subsidies cut by Rs 5,200 crore
• Interest payment reduced by Rs 2,700 crore
• Defence expense squeezed by Rs 5,000 crore

The bottom line

• Fiscal deficit down to 4.8% of GDP