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Taxation
Direct
Taxes
-
Stability
in tax rates, widening of tax base rationalisation
and simplification of the tax structure.
-
Fiscal
incentives in the form of tax holidays for development
of infrastructure were nationalised and enlarged
for core sector like roads, highways, railway systems,
water treatment, supply, irrigation, sanitation,
solid waste management system, airports, posts,
inland posts and waterways, industrial parks, generation
and distribution of power.
-
10
year Tax Holiday for infrastructure activities for
developers in special economic zones.
-
Tax
holiday for five years and 30 percent deduction
of profits for the next 5 years were provides to
enterprises in the business of handling, transportation
and storage of foodgrains.
-
Income
earned by way of interest, dividends and long term
capital gains from investments in infrastructure
was made fully tax exempt and exemption was extended
to cover guarantee commission and credit enhancement
fees earned from this sector.
Indirect
Taxes
Custom
Duties
- The
peak level of customs tariff was reduced to 35 percent
with abolition of surcharge at 10 percent. More is
towards reducing the customs tariff to the minimum
of 20 percent over a period of three years.
- Custom
Duties reduced on imported inputs for information
technology and telecom sectors.
- Basic
customs duty was raised to 70 percent on tea, coffee,
Copra and Coconut and to 75 and 85 percent on Conde
edible oils and refined oils respectively.
- With
the abolition of quantitative restrictions on imports,
customs duty on import of used cars, multi-utility
vehicles and two wheelers was raised to 105 percent.
Excise
Duties
- The
excise duty structure which was rationalised to a
single rate of 16 percent, CENVAT (Central valve added
Tax) in 2000-01 was further improved by replacing
three special excise duty rates of 8 per cent, 16
per cent and 24 per cent by a single rate of 16 per
cent.
- The
coverage of Service Tax at the rate of 5 per cent
on the value of Taxable Services was expanded by including
15 new services in 2001 and 12 new services in 2002.
Issues
and Priorities
- The
slowdown in Indian Economic Growth has been exacerbated
by the intractability of high fiscal deficits. Despite
the efforts made to curtail expenditure and increase
revenues, it has proved difficult to reduce fiscal
deficit below 5 percent of GDP.
- It is
the time to carry forward further financial sector
reforms so that real economy can benefit from a modernised
financial sector that exhibits high productivity levels,
greater diversification of the financial sector and
provides greater variety of instruments that serve
more efficiently the emerging needs of the economy
and the real sector for investment and production.
- A significant
structural change in the Indian economy is indicated
by the absolute fall in agricultural employment that
has accrued for the first time. Non farm employment
growth has however no compensated adequately for the
lack of growth in agriculture.
- Policy
initiatives and deepening of reforms are needed in
areas such as growth in infrastructure, agriculture
and allied sector, industrial value added, external
sector.
Annual
Budget 2001- 02
For
details of the Annual Budget 2001-02 click as under:
Annual
Budget 2001-02
Dated:
March 12, 2001.
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