Indian Budget 2003-2004

18. The Prime Minister had on Independence Day, 2002, announced the Government’s commitment to improving national well-being by addressing the ‘life-time concerns’ of our citizens, a noble and holistic objective.

19. Of these, I take housing first. It is a basic necessity. While promoting the all important employment-generating activity of construction, it also stimulates demand for core industries like steel and cement. To maintain its present momentum of growth, it is proposed that interest deductible under income tax up to Rs.1,50,000, for construction or purchase of a self-occupied house property, be continued. In addition, it is proposed that income from housing projects for construction of residential units, of prescribed specification, approved by the local authorities up to March 31, 2005, will now be exempt from income tax. Thus, not only has the limitation with regard to the year of sanction, earlier frozen at March 31, 2001, now been extended, but the benefits of the scheme also made available irrespective of the year of completion. The Finance Ministry is further examining what additional incentives can be given to basic infrastructural developments that must accompany slum upgradation, sewerage system laying and green-field housing projects.

20. Education is the central vein of our ‘life-time concerns’. Therefore, at the level of the citizen taxpayers, as a first step education expenses up to Rs.12,000 per child for two children, will be made eligible for rebate under Section 88 of the Income Tax Act.

21. India is a highly creative, knowledge-based society; but authorship of books has never been sufficiently rewarded, certainly not monetarily. Therefore, royalty income up to Rs.3 lakh per annum, received by authors of literary, artistic and scientific books shall henceforth be fully exempt; as will be royalty received by individuals from exploitation of patents. This is in addition to the other existing exemption benefits.

22. I declare, Mr. Speaker, a possible, personal benefit here as an author of some books, with variable but always modest royalty income. There, however, is no conflict of interest, Sir, because this measure has not been announced with any personal benefit in mind.

23. Games and sports are a necessity, as much for recreation as for developing sound bodies and minds. They must be encouraged. But, for a nation of a billion plus, sports facilities available to our young are woefully inadequate. Therefore, development of sports infrastructure will now be supported through direct funding of public-private joint initiatives. Guidelines in this regard will be issued shortly.

24. With three principal objectives in mind: to contribute to enhanced national health; to promote India as a global health destination; and to enable easier access to health facilities to our disadvantaged citizens, a number of additional measures are now proposed.

25. In order to encourage private hospitals to either establish new or to expand existing medical facilities, it is proposed to extend the benefit of Section 10(23 G) of IT Act to such financial institutions as provide long-term capital to private hospitals with 100 beds or more.

26. In view of the rapid strides made in R&D in medical equipment, there is recognisable need to frequently upgrade and replace the existing equipment with the more ‘state of the art’. It is therefore, proposed to increase the rate of depreciation from the present 25 per cent to 40 per cent in respect of life saving medical equipment.

27. To assist citizens with impaired vision, the basic customs and excise duties on rough ophthalmic blanks shall be reduced from 25 to 5 per cent, and from 16 to 8 per cent, respectively. To help people give up their addiction to tobacco and its products, excise duty on Nicotin Polacrilex gum shall be reduced from 16 to 8 per cent.

28. It is also proposed to reduce the customs duty on specified life saving equipment from 25 per cent to 5 per cent, and also exempt them from CVD (additional duty of customs). In respect of life saving equipment already exempt from CVD, it is proposed to exempt them from excise duty as well, so as to encourage indigenous manufacturers.

29. A large number of life saving drugs are either exempt from customs duty or attract a nominal 5 per cent duty. It is proposed to extend the concessional duty rate of 5 per cent to some more drugs. Life saving drugs currently attracting nil or 5 per cent customs duty will also be exempt from excise duty. Basic customs duty on glucometers and glucometer strips used by diabetics, will be reduced from 10 per cent to 5 per cent; and they will be exempt from excise duty as well. Cyclosporine will be exempted from excise duty. This reduction of excise duty to nil, wherever imports are exempt from CVD, will certainly make our domestic industry more competitive, as also better enable them to face the new intellectual property right regime from 2005.

30. For a large majority of our less advantaged citizens, easy access to good health services is just not there. In order to correct this and offer health protection, of some choice, the public sector general insurance companies have been encouraged to design a community-based universal health insurance scheme during 2003-04. Under this scheme, a premium equivalent to Re.1 per day (or Rs.365 per year) for an individual, Rs.1.50 per day for a family of five, and Rs.2 per day for a family of seven, will entitle eligibility to get reimbursement of medical expenses up to Rs.30,000 towards hospitalisation, a cover for death due to accident for Rs.25,000, and compensation due to loss of earning at the rate of Rs.50 per day up to a maximum of 15 days. To make the scheme affordable to BPL families, the Government has decided to contribute Rs.100 per year towards their annual premium. Full details will be publicized shortly.

31. I request Hon’ble Members to give this scheme the widest possible coverage in their constituencies. The benefits Sir, are real.

32. In the first phase, at least an additional 50 lakh BPL families will be covered during 2003-04.

33. The Government is committed to providing equal opportunities, protection of rights, and all-round development of persons with disabilities. A number of initiatives have already been taken in this regard.

34. Now, for income tax purposes, it is proposed that the physically handicapped or persons with such dependents be entitled to a deduction for permanent physical disability of Rs.50,000, and an enhanced deduction of Rs.75,000 in case of severe disability.

35. I also propose to reduce the customs duty on hearing aids, crutches, wheel chairs, walking frames, tricycles, braillers and artificial limbs to 5 per cent without Special Additional Duty (SAD). They will be exempt from CVD, and the domestic manufacturers will also be exempt from excise duty. I also propose to reduce the customs duty on parts of hearing aids and wheel chairs to 5 per cent without CVD and SAD.

36. The Government will establish a college of rehabilitation sciences at Gwalior, and a national institute for empowerment of persons with multiple disabilities at Chennai.

37. A constant refrain of the salaried has been limited standard deduction for income tax purposes. It is asserted that as a group they consistently demonstrate the best tax compliance. I agree, they do. It is, therefore, proposed that the standard deduction for such employees be raised to 40 per cent of salary, or Rs.30,000, whichever is less, for salary income up to Rs.5 lakh; and allow a deduction of Rs.20,000 for salary income above Rs.5 lakh. It is also proposed that relief be provided to employees opting for voluntary retirement scheme (VRS), by exempting VRS payments up to Rs.5 lakh, even when taken in instalments.

38. The Government will restore the Leave Travel Concession (LTC) facility to its employees. Mr. Speaker, Sir, permit me to hope that the consequential additional outgo from the exchequer on this account, will at least benefit some in our tourism industry.