The Indian Budget 1996-97 The Indian Economy Overview

INDIAN FISCAL BUDGET ONLINE


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Taxation [5]




  1. Our power plants face a shortage of coal on account of growing demand and better utilisation of installed capacity. I propose to reduce the rate of duty on non-coking coal from 35% to 20%. I also propose reduction of duty on coke from the existing level of 25% to 20%.

  2. Our plastics industry is coming of age. I propose a reduction of duty on plastics from 40% to 30%. Further, on articles of plastics I propose a reduction from the existing level of 50% to 40%.

  3. In regard to rates of duties on drugs and pharmaceuticals, I propose to retain the zero rate of duty on life saving drugs. I also propose to reduce the rate of duty on all other allopathic medicines from 50% to 40%. In order to make available veterinary drugs commonly used I propose to reduce the rate on specified veterinary drugs from 15% to 10%.

  4. There has been a persistent complaint from industry that customs duty on metals is very high and this makes it difficult for downstream industry, especially capital goods, to be competitive. Industry has been demanding that the rate of duty on metals should be brought down drastically. However, realising the need to provide adequate time to our metals industry to adjust itself to global competition, I propose a modest reduction from 35% or 40% at present to a peak rate of 30% on all metals except nickel and aluminium. On unwrought aluminium and unwrought nickel I propose to retain the current level of 10% and 20% respectively. On wrought aluminium I propose to reduce the duty from 25% to 20% and on wrought nickel from 30% to 20%.

  5. While I do not wish to tamper with the rate of duty on machinery which stands at 25%, I propose a reduction of duty on signaling and safety equipment for railways, airports, sea ports etc. from the current level of 50% to 25%.

  6. The last three years have witnessed a tremendous growth in our electronic industry which has been the result of enterprise as well as the stimulation provided by sharp reduction in customs duties. In order to maintain this trend, I propose the following changes:

  7. With a view to encourage sports in the country, I also propose to reduce import duty on sports goods from 50% to 30%.

  8. In order to give relief to professional press photographers I propose to allow them to import free of duty photographic equipment upto Rs.1 lakh. A similar concession is also being extended to accredited journalists for import of personal computer, typewriter and fax machine.

  9. Telecommunication is a growing sector and will turn out to be the life-line of our economy. The existence of an efficient telecommunication net work is a pre-requisite for accelerated economic growth. In order to give a boost to the efforts being made by the Department of Telecommunications, I propose that the duty on parts and sub-assemblies of telecommunication equipment be reduced from 35% to 30% and on finished equipment from 50% to 40%. In order to avoid the temptation to smuggle cellular phones, pagers and trunking handsets, I propose to reduce the customs duty on them to 30%.

  10. Upgradation of medical standards in the country is extremely important. I, therefore, propose to reduce the rate of duty on specified equipment, not generally made in India, and their parts from 15% to 10% and on other medical equipment from 40% to 30%.

  11. Edible oils now carry a rate of duty of 30%. This is an important item of daily food for the masses and we have a chronic shortage of edible oils in the country. I propose to reduce the import duty on edible oils from 30% to 20%.

  12. Mr. Speaker, Sir, earlier in my speech I dwelt on the dire need to step up investment in infrastructure. I had also detailed the sectors to which I propose to make large allocations. I have to raise resources to meet these requirements. I intend to ask importers to share the burden of building the infrastructure in this country because, ultimately, it will help raise production and enhance competitiveness. I, therefore, propose a levy of 2% as special customs duty on all imports except those that carry nil rate of duty or are imported at nil rate of customs duty for export production under the various duty free licences. This levy will not apply to gold and silver imported by eligible passengers or under special import licences. This is likely to yield about Rs.1600 crore in the current year.
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