Modest hikes in Central Plan outlays
New Delhi: The Budget has proposed a modest increase of barely 5 per cent in the Central Plan outlay for the current fiscal, after deflating the prevailing inflation rate, which is close to 6 per cent on an annualised basis. The Central Plan outlay for the current fiscal has been pegged at Rs 1,63,720 crore, against the budgeted Rs 1,47,893 crore. Among the major heads of Central Plan outlays, the outlay on the communications sector has been scaled down from Rs 12,860 crore (revised) in 2003-04 to Rs 11,730 crore budgeted for the current fiscal. In other important sectors, the outlay for 2004-05 showed increases ranging from modest to moderate as compared to the budgeted outlays of the previous year.

Thus, in agriculture and allied activities, the Plan outlay is Rs 4,643 crore against budgeted Rs 3,866 crore in 2003-04, in rural development at Rs 9,239 crore against Rs 8,181 crore; in energy from Rs 43,379 crore last year to Rs 46,788 crore; in industry and minerals from Rs 7,598 crore to Rs 8,349 crore; science and technology and environment from Rs 4,696 crore to Rs 5,644 crore, and in transport from Rs 28,784 crore to Rs 30,696 crore.
The Central Plan under social services has accorded higher priority to human resource development. Thus, a total Plan allocation of Rs 6,000 crore has been made in 2004-05 for elementary education and literacy.

While the total budgetary support for the Central Plan for the current fiscal is pegged at Rs 87,886 crore as against budgeted Rs 72,152 crore and the revised estimate of Rs 72,847 crore in 2003-04, the total Central Assistance for State and Union Territories Plans is estimated to be at Rs 57,704 crore, as against budgeted Rs 48,822 crore and revised estimate of Rs 48,660 crore.
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Hike in service tax and net widened
New Delhi: The UPA Government has expanded the service tax net to include 13 more services besides enhancing the taxation rate from eight per cent to 10 per cent. Currently, 58 services are taxable. The new services are business exhibition services, airport services, transport of goods by road (by goods transport agencies), transport of goods by air, survey and exploration of minerals, opinion poll services, intellectual property services other than copyrights, forward contract service, outdoor catering, pandal or shamiana service, TV or radio programme production, travel agents (other than air/rail travel agents) and construction services with respect to commercial or industrial buildings or civil structures.

The Government has budgeted a target of Rs 14,150 crore towards service tax for 2004-05 on the back of the enhanced rate and expanded net. The revised estimate of service tax for 2003-04 is at Rs 8,300 crore. Besides, existing service tax exemptions have been removed, with immediate effect, on a host of services. These include services on safe deposit lockers and vaults, broadcasting services provided by cable operators; maintenance or repair of computers under maintenance contract or by the manufacturer, mandap keeper services provided by hotels (40 per cent abatement to be allowed if catering is also provided), and commission agents. Further, the scope of service tax is being widened in several services including financial services. Commission and installation of plants, machinery or equipment would include erection thereof, stockbrokers would include sub-brokers, and cable operator service would include multi-system operators.
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Cap for SSI loans raised to Rs 1 crore
New Delhi: The Union Budget for 2004-05 has proposed to raise the ceiling for loans under the Capital Subsidy scheme from Rs 40 lakh to Rs 1 crore. Also, as many as 85 items, hitherto in the reserved list for the small sector have now been dereserved. The Finance Minister has also proposed that the rate of subsidy be raised from 12 per cent to 15 per cent. The Finance Minister's announcement encouraging SSI units to obtain credit ratings is likely to help them ensure credibility from third parties apart from the lenders and creditors.
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FIPB to fly with clipped wings
New Delhi: The Finance Minister P.Chidambaram has curtailed many of the present functions of the FIPB, which will now go to the automatic approval route for foreign direct investments (FDI) offered by the Reserve Bank of India (RBI). The FIPB, though, will continue to function as a one-stop service centre and facilitator for foreign investors and as a one-stop centre for securing the nod of all the Central Ministries.

The Finance Minister indicated that the proposed new Investment Commission would take up a major role in FDI policy decisions in the days to come. The Commission would be authorised by the Government to engage, discuss with and invite domestic and foreign businesses to invest in India and will be chaired by an eminent person.
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