The budget for the fiscal year 2008-09 is finally out.As expected it was a people centric populist budget drawn out keeping the general election in May 2009 in mind.But however many sections of the economy are not satisfied with this budget.It could not lift the mood of the markets and it declined by 245 points or 1.38%.Well the jittery US and Asian markets pulled the Indian markets down.Different sectors had impacts due to this new budget.Banking and cements might take a hit after the farmers loans were waivered off.

Lets analyse the budget in depth and note some key features.

> The most notable part in the budget was that the taxpayers may now save upto Rs 44,000 per year.Here are the old and new tax slabs.

The old tax slabs were:

Upto Rs 1,10,000 – Nil
Rs 1,10,001 – Rs 1,50,000 – 10%
Rs 1,50,001 – Rs 2,50,000 – 20%
Above Rs. 2,50,000 – 30%

The new tax slabs are:

Upto Rs 1,50,000     – Nil
Rs 1,50,001 – Rs 3,00,000 – 10
Rs 3,00,001 – Rs 5,00,000 – 20%
Above Rs 5,00,000 – 30%

But there is no change in surcharges.
So the taxpayers or the general public is highly ecstatic after huge tax cuts.

> Income tax exemption for womens went up from Rs 1.45lakh previously to Rs 1.80 lakhs now and Rs 2.25 lakh for senior citizens.

> Short term capital gain tax was increased to 15%.Will make investors to invest for long term now for saving tax.

> Commodities Transaction tax to be introduced in near future.

> The worst part as perceived by Indian Inc is that there was no change in corporate income tax.

> Farmers loans waiver of Rs 60,000 crores.Good news for the agriculture sector but may hit the banking sector as said previously.The waiver is 4% of total bank loans as per study which is a big amount in all sense.

> Decision on sixth pay commission deferred as FM awaits the recommendations of the sixth pay commission.

> There is a reduction in excise duties for small cars,two wheelers and medicines.

> There are some reasons to cheer on educational front.There is a 20% hike in educational budget to Rs 34,400 crores.3 new IITs are expected to be set up in Andhra,Bihar and Rajasthan.Rs 100 crore allocated to IT sector for national knowledge centres.Two Indian Institutes of Science Education and Research are to be set up at Bhopal and Thiruvananthapuram.

> Rs 992 crores set aside for national AIDS program.

> Defence allocation up by 10% to Rs 1,05,600 crores.

> Services and manufacturing sectors are expected to grow by 10.7 per cent and 9.4 per cent respectively.

And many more to come due course of time.So keep watching this space.

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