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Union Budget 1999-2000
 

Agriculture
  • Watershed Development Fund, with Central Government’s matching assistance, with National Bank for Agriculture and Rural Development to cover 100 priority districts within 3 years. Enhanced Central contribution under the Accelerated Irrigation Benefit Programme to States, which rationalise water rates to cover at least operations and maintenance costs.
  • A new credit-linked capital subsidy scheme for construction of cold storages and godowns to create additional cold storage capacity of 12 lakh tonnes and to rehabilitate and modernise 8 lakh tonnes of existing units. 
  • Tax holiday benefit for cold chain/storage facilities.
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Major Tax Initiatives

  • Special customs duty of 5 per cent abolished.
    Customs duty structure rationalised into only 5 rates.
  • Peak protective customs duty rate down from 45 per cent to 40 per cent.
  • Surcharge at rate of 10 per cent on basic customs duties imposed for revenue.
  • Petroleum products exempted from this new surcharge.
  • 10 per cent surcharge on individuals, Hindu undivided family (HUF) etc. for those with income above Rs.60,000. This means individual in 20 per cent slab will now pay 22 per cent and person at the top 30 per cent slab will now pay 33 per cent 10 per cent surcharge on companies to meet revenue needs.

Capital Market and Finance
  • Income from Unit Trust of India (UTI) and other Mutual Funds to be exempted in hands of unit holder; instead 10 per cent tax to be paid by mutual funds on income distributed.
  • To strengthen UTI income distributed under US 64 scheme and other equity oriented schemes will be exempt from the above 10 per cent levy for 3 years.
  • Joint mechanism set up between SEBI and Department of Company Affairs for stringent action against unscrupulous promoters.
  • Stamp duty on transfer of debt instruments within the depository mode to be abolished.

Expenditure Management

  • Fiscal deficit and Revenue deficit targeted to be decreased by 0.5 per cent and 0.7 per cent of GDP respectively.
  • Priority allocation for agriculture (plan outlay 35 per cent up) and social services (plan outlay 22 per cent up).
  • The process of downsizing of Government being initiated by abolishing four Secretary-level posts, with effect from 1 April 1999 through a process of merger and rationalisation of Central Government departments.
  • An Expenditure Reforms Commission to be constituted to reduce the role and the administrative structure of the Government.
  • System of zero base budgeting to be initiated for preparation for the next budget.
  • Guarantee Redemption Fund created.

Industry and Infrastructure

  • Major overhaul of excise with present 11 rates going to only 3 with central rate of 16 per cent, merit rate of 8 per cent and demerit rate of 24 per cent.
  • Restoration of 100 per cent MODVAT availment.
  • Major direct tax initiative to facilitate industry restructuring through mergers and amalgamations.
  • Boost to capital goods industry through removal of customs duty anomaly on steel
  • New Competition Law promised to replace Monopolies and Trade Restrictive Practices Act.
  • To level playing field for domestic industry, minimum 5 per cent customs duty introduced on some products and principle of countervailing duties extended in capital project sectors.
  • Infrastructure sector tax holiday extended to power transmission.
  • Massive thrust for road construction financed by diesel surcharge.

Small Scale Sector

  • Excise exemption scheme extended to cotton yarn.
  • Excise exemption schemes for manufacture of cosmetics and refrigeration liberalised.
  • Excise duty exemption to be allowed for goods made by small-scale units in rural areas and sold under brand name of another person.
  • Eligibility limit for availing the exemption is being enhanced from Rs.50 lakh to Rs.100 lakh.
  • Small-scale units allowed facility to pay excise duty on monthly basis.
  • Limit for composite loans is being raised from Rs.2 lakh to Rs.5 lakh.
  • Annual turnover limit of small-scale units raised from Rs.4 crore to Rs.5 crore for computation of working capital limits.
  • Lending by banks to non-banking finance companies or other financial intermediaries for purposes of on lending to the tiny sector to be part of priority sector lending.
  • New credit insurance scheme for small-scale units.

External Sector

  • Export credit scheme in foreign currency revamped to provide credit at competitive rates.
  • New Foreign Investment Implementation Authority (FIIA) for expediting foreign direct Investment (FDI) approvals into projects.
  • List of industries for automatic approval of FDI expanded.
  • New Gold Deposit Scheme supported by tax incentives to mobilise idle gold and thus reduce gold imports.

Non-Resident Indians (NRIs)

  • Facility of automatic approval for 100 per cent investment by NRIs/OCBs for all items, with some exceptions.
  • Major Stock Exchanges to open screen-based automated trading terminals abroad to facilitate the participation of NRIs.

PSU Reform/Disinvestment
  • Government support through interest subsidy/guarantees to profit earning PSUs to encourage them to raise bank loans for voluntary retirement scheme.
  • Disinvestment target for 1999-2000 at Rs.10,000 crore.

Housing

  • Golden Jubilee Rural Housing Finance Scheme of National Housing Bank (NHB) to target 1.25 lakh units in 1999-2000.
  • Raising tax deduction on interest on house loans for self-occupied houses from Rs.30,000 to Rs.75,000.
  • Strengthen housing finance companies through liberal tax treatment of income on non-performing assets.
  • Increased depreciation allowed for businesses building houses for employees.
  • Changes in foreclosure laws etc. to promote housing mortgages.
  • Commercial banks to lend up to 3 per cent of incremental deposits for housing.
  • New NHB scheme for interest rate concessions for small borrowers.

Courtesy :  http://business.webindia.com