Indian Budget 2003-2004

Capital goods and infrastructure

180. Considering higher usage levels of Liquified Natural Gas (LNG),

181. There is need to support cleaner and environment-friendly technologies. With this end in view, I propose to reduce the customs duty on components of membrane cell technology used in the caustic soda industry from 15 per cent to 5 per cent.

182. Safety and modernisation are key issues before Indian Railways. I propose, therefore, to reduce customs duty on spares for diesel locomotives, parts for conversion of locomotives from DC to AC from 25 per cent to 15 per cent, and loco simulators for training of drivers from 25 per cent to 5 per cent.

183. Given the importance of promoting food-processing and transporting agricultural products, I propose to reduce the customs duty on refrigerated trucks from 25 per cent to 20 per cent.

184. I assure Hon’ble Members of faster clearance hereafter of cargo and fewer procedures, by reducing the transaction cost, thus facilitating exports and imports. For this, a number of measures have been taken to simplify and modernize the customs clearance procedures, with the main emphasis being on cutting down contact of trade with the officers, to the extent possible, and introducing computerisation in customs clearances. While these efforts will continue, as a further trade facilitation measure, I propose to increase the interest-free period for warehoused goods from 30 to 90 days and to reduce the rate of interest for the period beyond 90 days to reflect the market rate of interest.

185. To bring our customs clearance procedures at par with best international practices, I propose to introduce, this year itself, a self-assessment scheme for importers and exporters. Briefly stated, under the self-assessment scheme, the importer himself/herself will determine the classification of goods, including claim for any exemption benefit, and the system will calculate the duty based on his/her declaration. Physical inspection of imported goods will be done by using risk-assessment and management techniques on a computer-based system and not on the orders of customs examining staff. Further, the existing system of concurrent audit of import documents will be replaced by post-clearance audit, as prevalent in developed countries.

186. Sir, my proposals made in this budget on the Direct Taxes will result in a revenue loss of Rs.2,955 crore while the proposals relating to indirect taxes will result in a gain of Rs.3294 crore.

187. The revised estimates for the current fiscal year show a decrease in expenditure of Rs.6,296 crore as compared to the Budget estimates. This reduction in overall expenditure has been achieved despite additional expenditure on drought relief, food subsidy, and the Delhi Metro Rail Project.

188. Net tax revenues for the Centre are estimated to be Rs.164,177 crore compared to the Budget estimate of Rs.172,965 crore, thereby reflecting a shortfall of Rs.8,788 crore. Non tax revenue is estimated at Rs.72,759 crore, Rs.619 crore more than the estimated level of Rs.72,140 crore. However, disinvestment receipts, at Rs.3,360 crore are lower than the Budget estimate of Rs.12,000 crore.

189. In the budget estimates for 2003-2004, the total expenditure is estimated at Rs.438,795 crore, of which Rs.120,974 crore is for Plan and Rs.317,821 crore for non-Plan.

191. In order to strike the right balance between the developmental needs on one hand and fiscal stability on the other, the Gross Budgetary Support (GBS) for Plan 2003-04 has been fixed at Rs.120,974 crore. This is Rs.7,474 crore more than last year, indicating an increase of 6.6 per cent. Out of this, an amount of Rs.72,152 crore is being provided as Budget support for Central Plan. This is an increase of Rs.5,281 crore, or 7.9 per cent, over the last year. Similarly, the Central Assistance for State Plans has been pegged at Rs.48,822 crore, which is Rs.2,193 crore more than last year.

191. Non-Plan expenditure in 2003-2004 is estimated to be Rs.317,821 crore compared to Rs.289,924 crore in Revised estimates for 2002-2003. The increase in non-plan expenditure is mainly in interest payments (Rs.7,560 crore), subsidies (Rs.7,162 crore), and defence (Rs.9,300 crore). Government is fully committed to modernizing the armed forces, and equipping them with the best available. This is non-negotiable. Therefore, during the next year, any additional requirement that may emerge on account of modernisation needs of the three defence services, or on account of the Married Accommodation Project, will be fully met. There will be no shortage of funds for defence.

192. Mr. Speaker, Sir, with these proposals I estimate total revenue receipts of the Centre at Rs.253,935 crore and the fiscal deficit at Rs.153,637 crore, which is 5.6 per cent of the estimated GDP.

193. Sir, in formulating the Budget for 2003-04, the Government has had to carefully and delicately balance the need for accelerating growth, while simultaneously making progress on the front of fiscal consolidation. I know that what Government has done is the most judicious under the circumstances.

194. This budget is about addressing the problem of poverty and life-time concerns of our citizens; of giving a major boost to infrastructure; and laying the foundations for balanced, accelerated growth of agriculture and industry, plus tax reform. I have tried to address the ‘Panch Priorities’, and I hope, that after this year of drought, our economy will respond favourably to the Budget package and demonstrate impressive growth in 2003-04.

195. Let me end, Mr. Speaker, by reiterating that this Budget is of an "India that is on the move." An India, that now rapidly advances to prosperity. It is about an India that banishes poverty, and builds on its great resource base, the strength of its human capital and the immense reservoir of its knowledge.

196. Sir, I commend the Budget to the House.