The Union Budget for 2010-11 has been announced by the Union Finance Minister, Mr Pranab Mukherjee, in Parliament on February 26, 2010.

India is among the first few countries in the world to implement a broad-based counter-cyclic policy package to respond to the negative fallout of the global slowdown. The Advance Estimate for Gross Domestic Product (GDP) growth for 2009-10 is pegged at 7.2 per cent. The final figure is expected to be higher when the third and fourth quarter GDP estimates for 2009-10 become available. The growth rate in manufacturing sector in December 2009 was 18.5 per cent – the highest in the past two decades.

Budget Highlights:

Infrastructure

• Rs 1,73,552 crore (US$ 37.57 billion) provided for infrastructure development which accounts for over 46 per cent of the total plan allocation.
• Allocation for road transport increased by over 13 per cent from Rs. 17,520 crore (US$ 3.79 billion) to Rs 19,894 crore (US$ 4.31 billion).
• Rs 16,752 crore (US$ 3.79 billion) provided for Railways, which is about Rs. 950 crore (US$ 205.81 million) more than last fiscal.

Energy

Plan allocation for power sector excluding Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) doubled from Rs. 2,230 crore (US$ 483.06 million) in 2009-10 to Rs. 5,130 crore (US$ 1.11 billion) in 2010-11.

Agriculture Growth

• Agricultural production
  
  Rs. 400 crore (US$ 86.66 million) provided to extend the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa.

• Credit support to farmers
  
  Banks have been consistently meeting the targets set for agriculture credit flow in the past few years. For the year 2010-11, the target has been set at Rs. 3,75,000 crore (US$ 81.25 million).

• Impetus to the food processing sector
  
  In addition to the ten mega food park projects already being set up, the Government has decided to set up five more such parks.

Petroleum and Diesel pricing policy

• Expert Group has submitted its recommendations to advise the Government on a viable and sustainable system of pricing of petroleum products.
• Decision on these recommendations will be taken in due course.

Urban Development and Housing

Allocation for urban development increased by more than 75 per cent from Rs. 3,060 crore (US$ 663 million) to Rs. 5,400 crore (US$ 1.17 billion) in 2010-11.

Improving Investment Environment

Foreign Direct Investment

• Number of steps taken to simplify the FDI regime.
• Methodology for calculation of indirect foreign investment in Indian companies has been clearly defined.
• Complete liberalisation of pricing and payment of technology transfer fee and trademark, brand name and royalty payments.

Exports

Extension of existing interest subvention of two per cent for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.

Education

• Plan allocation for school education increased by 16 per cent from Rs. 26,800 crore (US$ 5.81 billion) in 2009-10 to Rs. 31,036 crore (US$ 6.72 billion) in 2010-11.
• In addition, States will have access to Rs. 3,675 crore (US$ 796.1 billion) for elementary education under the Thirteenth Finance Commission grants for 2010-11.

Health

• An Annual Health Survey to prepare the District Health Profile of all Districts shall be conducted in 2010-11.
• Plan allocation to Ministry of Health & Family Welfare increased from Rs 19,534 crore (US$ 4.23 billion) in 2009-10 to Rs 22,300 crore (US$ 4.83 billion) for 2010-11.

Budget Estimates 2010-11

• The Gross Tax Receipts are estimated at Rs. 7,46,651 crore (US$ 161.78 billion) and the Non Tax Revenue Receipts are estimated at Rs. 1,48,118 crore (US$ 32.09 billion). The net tax revenue to the Centre as well as the expenditure provisions in 2010-11 have been estimated with reference to the recommendations of the Thirteenth Finance Commission.
• The total expenditure proposed in the Budget Estimates is Rs. 11,08,749 crore (US$ 240.25 billion), which is an increase of 8.6 per cent over last year.

Please click here for more details on the Union Budget 2010-11

Please click here for the CII Analysis of Budget 2010-11
Please click here for the E&Y Analysis of Budget 2010-11
Please click here for the ICRA Budget Analysis
Please click here for the KPMG Budget Analysis (Direct Tax)
Please click here for the KPMG Budget Analysis (Indirect Tax)