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Budget 2001: What to expect

The following measures are among those expected to be announced by Indian Finance Minister Yashwant Sinha in the 2001-2002 (April-March) Union Budget due to be released on February 28.

The expectations are compiled from industry officials, financial analysts and newspaper reports.

Fiscal measures

• Steps to manage spending more efficiently.
• Move to boost tax revenues by bringing more services under the service tax net.
• A move to peg the fiscal deficit target above its current level of 5.1 percent to boost spending in the infrastructure sector and spur economic growth.
• Tax concessions for private life insurers.
• Move to allow private firms to manage pension and savings funds of government employees.
• A 15-to-20 year tax holiday for infrastructure investments to boost economic growth.
• A 10-year tax holiday for all tourism, civil aviation and hospitality projects.
• Tax breaks for the agriculture sector to double its growth from the present 2 per cent.

Petroleum

• Dismantling of price controls or administered price mechanism (APM) in 2001 ahead of next year's deadline.
• Kerosene to remain under the APM.

Infotech and telecom

• Five-year tax moratorium on all e-commerce transactions.
• Tax incentives for hardware manufacturing in special economic zones (SEZs).
• Cut in custom duties on hardware sector components.
• Cut to 8 per cent in uniform excise duty on all IT products from 16 per cent.

Commodities

• Higher import duty on edible oil.
• Amnesty to encourage householders to deposit gold in banks under the Gold Bond Scheme aimed at bringing privately held gold stocks into circulation.
• An end to uniform customs duties for finished copper products and the raw materials used to make them.

Automobiles

• Cut in excise duty on passenger cars to 32 per cent from 40 per cent and on multi-utility vehicles to 24 per cent from 32 per cent.
• Licensing policy obliging new car manufacturers to invest a minimum $250 million and guarantee a minimum 100,000-unit capacity.
• Extend allocation from proceeds of a special tax on automobile sales -- otherwise known as the cess fund -- to R&D projects.

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