1. UNION BUDGET 2013-14
-AN ANALYSIS
Manuel M.Mathew
III DC Economics
ST.Thomas College Pala.

2. BACKDROP OF THE BUDGET
 SLOWING GLOBAL ECONOMY
 INCREASING FISCAL DEFICIT & CAD
 DARK SHADOW OF INFLATION
 TIGHTENING MONETARY POLICY
 QUEST FOR SUSTAINABLE
AND INCLUSIVE DEVELOPMENT
 IMPENDING GENERAL ELECTION

3. FOCUS AREAS
 Additional Resource Mobilization
 Expenditure Compression
 Measures to Promote Socio-economic
Growth
 Relief and Welfare Measures
 Widening of Tax Base and Anti Tax
Avoidance Measures
 Rationalization Measures
 Fiscal Consolidation

4. FISCAL DEFICIT
 STABILITY IN THE MACRO ECONOMIC
POLICIES
 ENHANCING THE CREDIBILITY OF THE
ECONOMY

5. CURRENT ACCOUNT DEFICIT
CONTINUES TO BE HIGH………
Excessive dependence on oil
Coal and gold imports
Slowdown in exports
MEASURES TO CONTAIN CAD……..
FII
FDI
ECB

6. TWO SURPRISING ELEMENTS…….
1. Proposed borrowing is mild.
2. Increase in Expenditure.

7. THUMPS UP……
Fuel subsidy comes down to the third
priority

8. THREE PROMISES……
TO
WOMEN- NIRBHAYA, Women’s Bank
YOUTH –Skill Development Mission
THE POOR-Direct Benefit
Transfer(DBT)

9. MAJOR EMPHASIS ON…….
 RURAL DEVELOPMENT
 AGRICULTURE
 FOOD SECURITY

10. TAX PROPOSALS
 SUR CHRGE IN INCOME TAX
Particulars Existing Proposed
Individual /HUF/ Firm/ Co-op NA 10% If TI > 1 Cr.
Soc./ Local Auth.
Domestic Company 5% 10% If TI > 10 Cr
5% If TI > 1Cr
Other than Domestic Co. 2% 5% If TI > 10 Cr
2% If TI > 1Cr
Non-Resident Person NA 10% if TI > 1Cr
 Rebate of Rs. 2000 for individuals having total
income up to Rs 5 lakh

11. SOME APPREHENTIONS…..
 Is food security allocation adequate??
 Is Disinvestment target of 55814
achievable??
 Foreign funded Infrastructural Development
 Neglected Higher Education

12. KEY RISKS TO INDIA'S MACRO STORY
US policy: sequestration
Euro-zone issues
• Realization of Fiscal Union
• support of the ECB
Global oil prices
• the correlation with Current Account Deficit (CAD) remains high.
• Geo-political tensions can push oil prices higher.

13. Domestic issues
• Politics outweighs economics; General elections
in 2014 can create uncertainty
• Reform progress to address India’s triple deficits
(Fiscal, current account, governance)
• Key constraints for infrastructure build-out: land,
coal and declining domestic financial savings rate
• Rising CAD and high gold imports weighing on
external finances

14. WHAT THE BUDGET MISS……
 An amnesty scheme allowing disclosure of
illegal money…..of course with a penalty…..
EXPERIENCE OF 1996
 Scope of injecting Rs.75000 crores into the
economy and to survive fiscally.

15. TO SUM UP…..
 FINANCIAL DISCIPLINE
 FORWARD LOOKING
 REASONABLE AND REALISTIC