With the UPA chairperson Sonia Gandhi pushing for 25 million families to qualify under the food security plan, Finance Minister P Chidambaram is having a tough time managing other social sector priorities given the mounting fiscal deficit.
A likely casualty this year is the education sector, says a report in Hindustan Times. According to the report, the education sector this year is likely to cut in budget allocation, let alone an increase.
In the last 10 years, the allocation for the sector has has gone up 750 percent to Rs 74,056 crore in 2012 from Rs 9,861 crore in 2002. Following increasing concerns over the quality of India’s education system, Budget 2012 had increased funding allocation towards education by 17 percent. However, this year the ministry can only hope for a non-reduction in budget.
Chidambaram may allocate another Rs 5,000 crore for food security scheme
Meanwhile, the finance ministry has decided to reduce the allocation of ministries like rural development that run world’s largest employment providing scheme MNREGA. However, implementation of the Food Security Act is on the government’s agenda as it can win the rural vote bank in favour of the UPA.
Chidambaram is likely to allocate another Rs 5,000 crore for the implementation of the food security scheme since Sonia Gandhi is adamant that the Food Security Act be rolled out this year, says this DNA report.
Moreover, the beneficiaries could exceed the budgeted 67 percent and go up to 70 percent, says this Hindustan Times report.
Railways may get Rs 34,000 crore lifeline this Budget
And while the rural development, defence and roads and transport are facing a cut in allocation, Indian Railways is betting on its efforts at internal resource generation and stripping down its expenses to work in its favour when it comes to budgetary support from the government. The Hindustan Times quotes sources as saying that the finance ministry was considering a gross budgetary support of R 34,000 crore, which is Rs 10,000 crore more than last year’s allocation.
The railways is planning to raise the remaining amount through market borrowings, extra-budgetary support, internal resources and railway safety fund, the report said. Read more here.
Tax deducted at source may be made mandatory for realty transactions
Under pressure to increase tax collection, the finance ministry is likely to widen the scope for source-based taxation for transactions in realty, foreign tours, and mutual funds among other sectors to curb unaccounted money and bring down cash transactions, says a report in the Business Standard.
Earnings above Rs 50 lakh? You may have to pay a surcharge
And the debate over the super-rich tax continues as the finance ministry is considering imposing a surcharge on those earning between Rs 50 lakh and Rs 1 crore. “For example, if the tax on an income of Rs 1 crore is Rs 30 lakh and a surcharge of 10 percent is levied, the total tax liability on the taxpayer would be Rs 33 lakh,” says another Business Standard report.