Union Finance Minister Pranab Mukherjee says the Indian economy is in a far better position than a year ago. He cautioned that there are challenges that face the Indian economy even today.

The first challenge is to return to the high GDP growth path and to attain double digit growth in the next few years. The second challenge is to harness the economic growth and make development more inclusive. The third challenge is to improve the well being of the rural people andbroad based the economic recovery.

FY10was a challenging year for India. The deceleration in the economic activity in the second half of 2008-09 led to a GDP growth of 6.7%versus an average 9% in the previous three years.

The Finance Minister also said that the economic recovery is encouraging.There is momentum in manufacturing and signs of a turnaround are also visible in merchandise exports. But he went on to add that inflation has to be contained and the Government should ensure better management of the food economy.

The finance ministry will bring out a status paper and a road map on curtailing the overall public debt, as suggested by the 13th Finance Commission. This will be followed by an annual report, the Finance Minister said.

The Government will endeavour to introduce the GST and Direct Tax Code inApril 2011 while proceeds from the PSU disinvestment will be increase din FY11.

The following are some of the key highlights on Union Budget 2010-2011.

• The Finance Minister Shri PranabMukherjee  lays emphasis on consolidated growth, improving investmentenvironment, inclusive development and strengthening  transparency andpublic accountability in budget 2010-11.
• The total expenditure proposed in the budget estimates is rs.11,08,749 crore , an increase of 8.6% over last year.
• The plan and non-plan expenditureestimated at rs.3,73,092 crore and rs.7,35,657 crore respectively, anincrease of 15 percent in plan expenditure and 6% in non-planexpenditure over the be of previous year.
• Fiscal deficit  at  5.5% of gdp works out to be rs. 3,81,408 crore.
• Rolling targets for fiscal deficit  pegged at 4.8% and 4.1%  for 2011-12 and 2012-13.
• Net market borrowing would be of the order of rs. 3,45,010 crore  leaving enough space to meet credit  needs of private sector.
• Against a fiscal deficit of 7.8% in2008-09 , inclusive of oil and  fertilizer bonds, the comparable fiscaldeficit is 6.9%  as per re 2009-10.
• Gross tax receipts estimated at rs.7,46,651 crore and non-tax receipt estimated at rs. 1,48,118  crore.
• Status paper giving road map for curtailing  the overall public debt  to be brought out within 6 months.
• About rs. 25,000 crores to be raised  through disinvestmet programme
• To simplify the fdi regime,  for the first time both ownership & control recognised as central to the fdi policy.
• Rs. 16,500 crore  to be provided  to public sector banks  to achieve a minimum 8% tier-i
• Growth of 127%  recorded in exports from sezs till December, 2009.
• A four-pronged strategy to spur the growth in agriculture sector envisaged. which includes agricultural production, reduction in wastage of produce , credit support  tofarmers and thrust to the food processing sector.
• Agriculture credit flow target  raised to rs. 3,75,000 crore  from  rs.3,25,000 crore
• Subvention  for timely  repayment of crop loan  increased from 1% to 2%.
• Infrastructure development  gets an allocation of rs. 1,73,552 crore, 46 % of total plan allocation , an increase of 13%  in road  transport sector.
• India infrastructure  finance company limited’s  disbursements to reach rs. 20,000 crore by march 2011.
• Allocation for power sector increased  by more than doubled to rs. 5,130 crore.
• New tax incentives  announced for infrastructure sector.
• National clear energy fund for funding research and innovative projects  in clean energy technologies  to be set up.
• Spending on social sector  to account for 37% of  total plan outlay  at rs.1,37,674 crore
• Allocation for rural development enhanced to rs.66,100  crores. allocation for nrega  stepped up to 40,100 crore.
• Rs. 48,000 crore allocated for Bharat Nirman  Programme
• Backward region grant fund  allocation enhanced to rs. 7,300 crore.
• Rajiv Awas Yojna for slum dwellers and urban poor to get rs. 1,270 crore , an increase of over 700%
• National social security fund for unorganized sector workers to be  set up with  an initial amount of rs. 1,000 crore.
• Mahila Kisan Sashaktikaran Pariyojna  with  a provision of rs.100 crore launched
• 80% increase in the allocation  for ministry of social justice & empowerment  at rs 4,500 crore.
• Minority affairs to get  rs.2,600 crore, an increase of 50%. 
• To rewrite and clean up the financial sector laws, financial sector legislative reforms commission  to be set up.
• Unique identification authority of India to  get an allocation of rs. 1,900 crore. a technology advisory group for unique protect to be   set up.
• Allocation  for defense increased to  rs.1,47,344 crore
• National mission for delivery of justice and legal reforms to be set up  to provide timely justice to all.
• Income Tax slabs broadened  -  10% on income above  rs 1.6 lakh to 5.00 lakh, 20%   on income above 5.00 lakh  to 8.00 lakh , 30% on above rs. 8.00 lakh
• Additional deduction of rs. 20,000 for investment in infrastructure bonds
• Surcharge of 10% on domestic companies reduced to  7.5%
• MAT increased  from 15% to 18%
• Wighted deduction  non expenditure incurred on in-house  r&d from 150% to 200%
• Limit of turnover for presumptive taxation of small business enhanced to rs. 60 lakh.
• Limits of turnover needing audit enhanced to 60 lakh for businesses and rs. 15 lakh for professions.
• Proposal of direct tax to result in revenue loss of rs. 26,000 crore where as indirect taxes  to result  ina revenue gain of rs. 46,500 crore.
• Service tax proposals to  result in net revenue gain of rs.3,000 crore.
• Accredited news agencies  which provides news feed online exempted from service tax
• Saral –II  for individual salary  taxpayers ready for notification
• Service tax retained at 10%.
• Certain new services  to be brought  within service tax purview..
• Micro-wave ovens, pre-packaged imported goods,  mobile phones, watches, ready made garments, toy baloons, long pepper, replaceable household water filter  to be cheaper.
• Infotainmet sector to benefit from concessional custom duty
• Indian rupee to get a symbol, join the select club of currencies
• Special duty concessions to promote clean environment clean energy cess @ rs. 50 per tonne on coal
• Rate reduction in central excise duties partially rolled back ad valorem on non petro products & cars increased by 2%
• Uniform basic duty of 5% and cvd of 4% on import of medical equipmnet.
• Scientified inputs for orthopaedic implants exempted from import duty
• Central excise on petrol & diesel raised by rs. one per litre.
• Major tax relief to agriculture & related sectors
• Project import status for the setting up of cold storages
• Full exemption from excise duty to trailers & semi –trailers.