Budget 2008-9: Key Highlights & Revised Tax Structure

Investment:


There is a clear boom in investment. The saving rate and the investment rate have gone up to 35.6% and 36.3% respectively by the end of 2007-08 against 29.8% and 28.2% in 2003-04. Even the foreign investment points to this boom during April-December 2007. The Direct Foreign Investment amounted to $12.7 billion and the Foreign Institutional Investment stood at $18 billion.

Power:


The XIth five-year plan (2007-2012) targets an additional power generation capacity of 78,577MW, which is more than the total capacity added in the previous three five-year plans. Commercial operations for 10,000MW is expected to be achieved by March 2008. The FM has provided Rs 800 crore in 2008-09 for the accelerated Power & Development and Reforms Project. However since the real drag on the sector is the poor state of transmission & distribution (T&D) the FM proposes to create a national fund for reforms in T&D sector.

Oil & Gas:


The bidding process under the New Exploration Licensing Policy had invited bids for 57 blocks in December 2007. It is estimated that investment of $3.5 billion to $8 billion will be attracted for exploration and discovery.

Biggest Gainers of the Budget 2008-9


Automobiles

  • Maruti, Tata Motors, Bajaj Auto, Hero Honda, Ashok Leyland

Banking

  • PSU Banks, ICICI, HDFC

Infrastructure

  • L&T, BHEL, Punj Lloyd, Power Grid, Crompton Greaves

FMCG

  • Nestle, HUL, Tata Tea, Heritage Foods

Hotels

  • Indian Hotels, Taj GVK, Hotel Leela

Healthcare

  • MNC Pharma Companies, Cipla, Apollo Hospitals, Fortis, Panacea Biotech
Biggest Losers of the Budget 2008-9


Cement

  • Shree Cement, Madras Cement, ACC, India Cement

Information Technology (IT)

  • Negative for the sector as the benefits under Sections 10-A and 10-B were not extended
Revised Tax Slabs of the Budget 2008-9



Old slab
(FY2007-8)
Tax Rate
(%)
New Slab
(FY2008-9)
Tax Rate
(%)
Upto Rs 1,10,000NilUpto Rs 1,50,000Nil
Rs 1,10,001 to Rs 1,50,00010Rs 1,50,001 to Rs 3,00,00010
Rs 1,50,001 to Rs 2,50,00020Rs 3,00,001 to Rs 5,00,00020
above Rs 2,50,00030above Rs 5,00,00030


Note: # There is a levy of 3% education cess over the tax calculated as per above slabs.

Other articles on Budget 2008-9:
 

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