The 2-minute Budget

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Home > Business > Budget 2003-2004 > Report

The 2-minute Budget

BS Bureau | March 01, 2003 10:06 IST

Cap on foreign direct investment in the banking companies under the automatic route raised from 49 per cent to 74 per cent. Private banks also allowed to invite investment.
Overseas investment under the automatic route to be permitted to corporates with a proven track record even where the investment is not in the same core activity. The limit for this purpose raised from the current 50 per cent of the net worth of the Indian company to 100 per cent.
Prepayment of external commercial borrowing dues under the automatic route to be permitted by removing the current ceiling of $100 million.
Procedure for registration of foreign institutional investors to be streamlined to facilitate their easy entry into stock markets.
The Banking Regulation Act, 1949, to be amended to remove provision for limiting voting rights of a person holding shares of a banking company to 10 per cent irrespective of his shareholding.
The benefits of Section 72A of Income Tax Act to be extended to nationalised banks. Any company can now merge with a nationalised bank with consequential tax benefit.
Stock exchanges opting for corporatisation or demutualisation to be exempted from capital gains tax.
75 items deleted from the reservation list for small scale industrial sector. These include laboratory chemicals and reagents, leather and leather products, plastic products, chemicals and chemical products and paper products.
Three-tier excise duty structure of 8 per cent, 16 per cent and 24 per cent proposed.
Peak Customs duty reduced from 30 per cent to 25 per cent. Agricultural and dairy products excluded from this cut.
Excise duty reduced on a range of garments and fabrics.
Additional Excise Duty Act to be amended to facilitate introduction of Value Added Tax (VAT).
States to be allowed to levy sales tax on textiles, sugar and tobacco products at a rate not exceeding 4 per cent to augment their resources and integrate this tax with VAT.
The ceiling rate of Central Sales Tax for inter-state sale between registered dealers to be reduced to 2 per cent; The Centre to compensate the states for revenue loss on this account.
Interest rates on public provident fund and small savings schemes to be reduced by one percentage point with immediate effect. Interest on relief and savings bonds also to be reset accordingly.
Interest-free period for warehoused goods increased from 30 to 90 days and the rate of interest for the period beyond 90 days reduced to reflect the market rate of interest.
Customs clearance procedures to be brought at par with international standards. A self-assessment scheme for importers and exporters to be introduced for this purpose.
Non-resident Indians' deposit schemes to be brought under full convertibility.
Corporate debt restructuring mechanism to be streamlined; an experts group set up to suggest measures for the purpose.
A separate corporation to be set under the existing public sector general insurance companies to provide agricultural insurance.
Milk and Milk Products Control Order to be liberalised to encourage capacity addition.
Small-scale industry reservation list pruned by 50 items, including farm equipment.
Limit for composite loans for small-scale sector raised from Rs 2 lakh to Rs 5 lakh.
Exemption limit for collateral security for small-scale sector raised from Rs 25,000 to Rs 5 lakh; project cost limit under National Equity Fund also raised from Rs 25 lakh to Rs 50 lakh.
A separate corporation to be set under the existing public sector general insurance companies to provide agricultural insurance.
Milk and Milk Products Control Order to be liberalised to encourage capacity addition.
Small-scale industry reservation list pruned by 50 items, including farm equipment Limit for composite loans for small-scale sector raised from Rs 2 lakh to Rs 5 lakh.
Exemption limit for collateral security for small-scale sector raised from Rs 25,000 to Rs 5 lakh; project cost limit under National Equity Fund also raised from Rs 25 lakh to Rs 50 lakh.

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