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REGISTERED NO. D. 221

The Gazette of India

EXTRAORDINARY

PART I—Section I

PUBLISHED BY AUTHORITY

No. 11 ] NEW DELHI, MONDAY, FEBRUARY 28, 1966/PHALGUNA 9, 1887

Separate paging is given to this Part in order that it may be filed as a separate compilation.

Budget 1966-67

Finance Minister's Speech

New Delhi, the 28th February 1966

Mr,

I rise to present the Budget of the Government of India for the year 1966-67. But before I do so I must pay homage to our late Prime Minister, Shri Lal Bahadur Shastri. His life was Riven, as indeed it had been Jived, in the cause of our country and our people. With him he had brought, a deathless spirit and in his death he has made a gift of this spirit to the nation. With this heritage we have to proceed in the service of our people, well guided by our beloved Prime Minister and companioned by our esteemed colleagues. With the Honourable Members I share this task.

2. The Budget of the Government of India is a major instrument for imple- menting our plans and policies. It has to be framed, therefore, in response to current economic trends as well as the long-term requirements of the economy. Recent trends in the economy have been outlined in the Economic Survey which

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was presented to Parliament a few days ago. I shall, therefore, refer only to a few major developments which have a bearing on the formulation of the next year's Budget.

3. In many ways, the year that is now drawing to a close has been a very •difficult one. Some of the difficulties such as the inadequate performance of the economy, the sluggishness of the capital market, the pressure on the balance of payments and the rise in the prices of essential commodities have been with mi now for a number of years; and it is imperative that budgetary and, indeed, all economic policies are framed with Q view to reversing these adverse tiends. At the beginning of the current fiscal year, it was our hope that the subsiantiaJ improvement in agricultural production and national income which had taken pluce in 1964-65 would maki? it possible to bring about n corresponding improve- ment in the general economic situation. Thir; expectation, however, has not been realised as a result of a number of unforeseen adverse happenings. Apart from the unprecedented failure of monsoons during the current year, we have had to reckon with hostilities on our borders and a pause in foreign aid,

4. Honourable Members will recall that the Budget for 'the current year at presented in February last had forecast a small overall surplus- In the early part of the year itself, however, it became apparent that supplementary measure! for raising revenues were necessary to keep to oin resolve r.[ avokrni? deficit financing. Accordingly, the supplementary budg?t presented lust August provided lor additional revenue measures vvith a yield of over Rs. 100 cro ed for I'it; rest of the current financial year. Since then, the budgetary outlook has become worse. On present indications, the current year will close with a large deficit of about Rs. 165 crores. As compared with the original Budget estimates, taken together with the effect of the supplementary budget, the revenue account is now likely to show a shortfall of Rs. 53 crores. The maior deterioration of about Rs. 112 crores, however, is likely to be on capital account. I do not propose to burden Honourable Members with details of the variations that ar? likely to occur on the revenue and capital account in relation to our earlier estimates. 1 .shall, therefore, mention only those changes which have some relevance for the future,

3. Under revenue, receipts from Income and Corporation taxes are now expected to show a shortfall of the order of Rs. 73 crores. On the other hand, Customs receipts are likely to be Rs. 31 crorcs more and Excise revenues Rs. 18 crores more; total tax receipts will, therefore, fall short by Rs. 26 crores.

6. As for revenue expenditure, Honourable Members will appreciate that the hostilities on our borders that were started last August have made it necessary to increase the outlay both on defence and border security. Revenue expenditure on defence is expected to show on increase of Rs. 20 crores over earlier estimates, .grants to States for. border security, Rs. 64 crores, and payments for Police Battalions raised by the States for the Central, Rs. 1J crores, making a total increase in expenditure under these three items of Rs. 28 crores, The net result of these and other variations on the revenue account is that the estimated revenue surplus of about Rs. 335 crores will now be reduced to Rs. 282 crores.

7. On capital account, the major developments are a shortfall of Rs. 43 crores to respect of external assistance and an addition of Rs. 100 crores by way of loan assistance to the States which will not be recovered during the current 3'ear iself- In response to the general weakness of the budgetary position of the States as "well as the need to enable the'Statcs to undertake special agricultural programme* on an emergency basis, Central assistance by way of loans to the State Govern- ments for their Plans had to be increased by Rs. 40 crores. In addition, it is estimated that loans of the order of another Rs. 45 crores will be needed over the year to strengthen the budgetary position of some of the States. An ,,ddition"l amount of Rs. 10 crores was given to the States as loans for the purchase an* distribution of fertilizers. Loans to the States in respect of Small Savings will b" larger by Rs, 5 crores. The requirements of the public sector concerns, notably, the Heavy Electricals, the Indian Oil Corporation, National Coal Development Corporation and Neyvell Lignite are also likely to bo higher. On the other hand, some savings in capital expenditure on a number of heads may reasonably b* expected,

8. Honourable Members will note that the net deterioration of Rs. 112 crorw "n capital account is really explained by two major factors, namely, additional loan assistance to the States and the shortfall in external assistance. Tl" decline In Central tax receipts of the ord - of Rs. 26 crores represents less than U per cent of total tax receipts. Further, considering the gravity of the situation

that we had to contend with, the increase in revenue expenditure on defence and border security has been modest. The shortfall in respect of external assistance is naturally a matter which is largely beyond our control. But for the additional liability of Rs. 100 crores by way of loan assistance to the States, not recoverable within the year itself, the overall deficit in the Centre's Budget this year would have been only Rs. 65 crorps. Even so, Honourable Members, I am aure, will agree with me that the developments during the current year nre a matter of concern and call for a greater degree of realism in budget-ma!- ng as well as greater sense of determination In restraining expenditures, whether revenue or capital, whether Plan or non-Plan, whether by the Centre or by the State*.

9. T cannot emphasise too strongly that the weakness of the financial position of the States and the tendency on the part of some of them to resort to unauth- rised overdrafts from the Reserve Bank are matters which have to be remedied. The responsibility which we have assumed so far to clear these overdraft! inevitably strains the Centre's budgetary position. But this strain is bound to be reflected in turn in the Centre's ability to help the States in respect of their Plans. Unauthorised overdrafts and deficit budgeting by some States inevitably have repercussions on other States which are better able or more willing to manage their affairs on a more realistic basis. Both the Centre and the State Governments .taken as a whole, therefore, have to share the responsibility for ensuring that unsatisfactory budgetary practices such as budgeting for deficit and unauthorised overdrafts from the Reserve Bank are avoided in future by adopting common standards of discipline. We propose to devote urgent attention to the problem in consultation with the Planning Commission and the State Governments to ensure that the present unsatisfactory situation in regard to financial management by some States does not continue.

10. The Budget of the Government of India for the year 1966-67 will necessarily have to be framed in the light of the budgetary developments during the current year which I have just outlined. As mentioned at the outset, it must also take into account recent trends in the economy and the continuing requirements of defence and development. The year 1266-67 is the first year of the Fourth Five Year Plan. The Budget for 1966-67, therefore, should give to the Fourth Plan as good a start as is possible consistent with the Immediate ne"d to restore a greater measure ol monetary and price stability. Honourable Member! will also appreciate that while it has always been our policy to restrict expendi- ture on defence to the maximum extent possible so as to conserve all possible Bourcei for securing the well-being of our people, we cannot afford to take any chances with the security of the nation, devoted though we are to the cause of peace.

11. Honourable Mernbers are already familiar with the major strands in the country's economic situation. The substantial improvement in agricultural pro- duction that took place in 1964-65 could not be sustained In the current year on account of adverse weather conditions. Although no precise estimates of agricultural output in the current year are yet available it is clear that there would be a substantial decline in the output of foodgrains as well as a reduction, In varying degrees, in the outturn of commercial crops such as jute, mesta, oilaeedt, tobacco, tea and cotton. Honourable Members would, T am sure, like me to tai" this opportunity to express our gratitude to friendly countries and internatiowd institutions, and particularly to the Government and the people of the United States, for agreeing to supply to us substantial quantities of foodgrains at a time of need. F.von with this help, however, the availability of essential foodgraina and agricultural raw materials during the coming year would be considerably restricted so that it becomes more necessary than ever to restrict the expansionary Impact of Government expenditure in general.

12. The growth in industrial production has also slackened during the current year. During the first six months of 1965-66, industrial production increased by T-3 per cent over the corresponding period of 1964r-65. During the second half ol the current fiscal year, however, Industrial production Is expected to Increas* by only 5 per cent so that over the year as a whole we are likely to have an increase of about fi per cent in industrial production. Our continuing develop- mental efforts arc showing results. Capacity in a number of industries guch as those producing finished steel, aluminium, engineering goods and chemicals ha" been increasing steadily and can be expected to increase further in the coming year. On the other hand, the shortage of domestic raw materials and our inability to compensate this by larger imports has seriously contributed to the sluggishnew •r industrial production In recent months.

13. Superficially, it might appeal- that our balance of payments position has ihown some improvement during the current fiscal year. In 1964-65, for example, our foreign exchange reserves declined by Rs- 72 crores. By contrast, it may well be possible for us to avoid any decline in foreign exchange reserves during 196o-66 with the help of a net drawing from the International Monetary Fund of Rs. 11-9 croies. But we have been able to stem the decline in our already depleted reserves during the current year only on the basis of a highly restrictive import policy. Fresh licensing for imports lor the maintenance of the economy during the current year has been on a very restricted basis; and this is already beginning to affect industrial production despite a substantial decline in the inventories of Imported materials and components within the country.

14. Over the months to come, our needs for inescapable imports of foodgrains and agricultural raw materials will increase as a result of the drought It will also become even more difficult than before to maintain the exports of some of our agricultural products in the face of a decline in production. Difficult as the foreign exchange situation has been and, indeed, is likely to be over the months to come, 1 think it would be self-defeating tm intensify or even to maintain the present severity of our import restrictions. What we need, Indeed, Is a signifi- cantly larger flow of maintenance imports over the coming months so that inventories within the country aro restored to normal levels and capacity already created is utilised, as fully us possible. It is only on the basis of a more liberal import policy that we can hope to give a fresh momentum to industrial production and greater regard for efficiency all round in the immediate future. Situated as we are at present, it is not possible for us to undertake a more liberal licensing of essential imports of raw materials and components without external assistance In suitable forms. But Honourable Members may bo sure that it will be the constant endeavour of this Government to seek the cooperation of international Institutions and friendly foreign governments to reduce the severity of our present import restrictions.

15. Over a period, however, our ability to maintain imports at satisfactory levels and to meet external obligations such as those for the repayments of debt will necessarily have to turn on our own efforts to increase our foreign exchange earnings not only by higher exports but also by way of increase in invisible receipts from tourism, remittances, shipping and the like. During the first three years of the Third Plan period, there was a rapid increase in our exports which was all the more gratifying for the reason that it took place despite the fact thai the growth of production within the country failed to come up to expectations. The same momentum in exports, however, has not been maintained during the past two years; and we are confronted in the immediate future with Ihe potent possibilitv that the drought might affect adversely some of our agricultural exports.

18. Fundamentally, we cannot give a continuing impetus to our export effort without increasing production and productive efficiency all round and without a check on general inflationary pressures within the country. While efforts in these directions are required on a continuing basis in the interest of higher export earnings as, indeed, of development along sound lines, we have not nesitated to adopt a number of measures to give specific incentives for promoting higher exports. The Tax Credit Certificate Schemes introduced during the year and tha import entitlement schemes which have been in operation for some time are examples of the inducements we offer at present to promote higher exports. More recently we introduced the National Defence Remittance Scheme and I am happy to say that the response" to the scheme has been encouraging. It Is in view oi this that the scheme has been extended now by another three months though a second look may have to be taken to lower the rate of benefit inherent in the "chome. We shall continue to review, modify and extend the export promotion measures that we have designed in the light of our needs and experience to make •ure that they continue to provide a strong, stable and comprehensive basis for a Ylgorous export drive.

hopeful that the Consortium organised under the leadership of the World Bank will approach the task of mobilising external assistance for our Fourth Plan la the same constructive way as it has done in the past for our Second and more particularly for our Third Plan. At the same time, Honourable Members will appreciate that the Plan itself and our policies in support of the Plan have to be consistent not only with reasonable developmental goals but also with a greater determination on our part to rely increasingly on our own strength and resources.

18. I would like to refer, in particular, in this connection, to the need to reduce our dependence on assistance under the United States PL 480 programme for tne impoit of foodgrains and other agricultural commodities. Honourable Members will have, I am sure, every opportunity to review the measures that wo have set in motion for achieving a substantial increase in agricultural production during the Fourth Plan period. I have to emphasise in particular the fact that our budgetary position also has come to lean heavily on the import of agricultural commodities under the PL 480 programme. We cannot possibly regard a large accretion of resources to the Budget from PL 480 transactions as anything but a fortuitous counterpart of our difficulties on the agricultural front. The fact that we depend today to such a large extent on the PL 480 programme for supple- menting our budgetary resources emphasises once again the need for caution In regard to governmental expenditure as well as for exploring every available opportunity for raising more internal resources.

19. More and more, the possibility of raising additional internal resources will depend on the growth and dynamism of the Indian economy itself. Whichever way we look at it, therefore, it is of paramount importance to improve the per- formance of the economy by raising productivity both in agriculture and industry. From this point of view, I attach importance to strengthening and maintaining the confidence of the private sector as also to the more efficient working and management of our growing family of public enterprises. It is not necessary for me to dwell at any length on the malaise of the capital market which has continued now for more than three years. While we have endeavoured to meet the genuine requirements of private industry for investment by greater assistance from financial institutions, there cannot be any doubt that thn revival of the capital market and a greater flow of private savings to Industry hi the form of equity investment are desirable hi the larger social interest- A democratic society desiring rapid development both in the public and the private sector but averse to concentration of wealth and economic power has all the more reason to make investments in the private sector as widespread as possible. Growth of private Industry in such circumstances must depend more and more on the equity parti- cipation of a growing number of people drawn from different strata of society. More widespread equity participation would also facilitate stricter control on management in the private sector.

20. In the monetary field, till recently, a great deal of stringency has bee" felt despite the fact that the supply of money has continued to increase at m much foster rate than the suoply of goods and services. Given the developments In the budgetary field to which I referred earlier, it is not surprising that money Bupply has increased at a faster rate than what had been envisaged. But clearly the .combination of monetary stringency and a rapid increase in money supply la an indication of the fact that genuine savings have not increased adequately and that a part of these have been diverted to less desirahle forms of Investment. We cannot relieve monetary stringency by continuing to increase money supply at the same rapid rate as wo have done over the pL-st few years. To do so would only aggravate , the inflationary situation in the country. Honourable Members are well aware that the general price level In the country has shown a significant increase of 7'fi per cent during thd 12 months ending January 1966. While the Reserve Bank will continue to deploy flexibily the instruments of monetary policy in keeping with the genuine requirements of credit for achieving higher levels of production, we shall have to make sure that the expansion of credit for legitimate purposes takes place increasingly on the basis of growth of deposits and at the expense of credit expansion for less desirable social purposes. Indeed, quite apart from these considerations. It is essential to ensure that lend- ing by the banking system is directed towards socially desirable objectives such as greater economic opportunity to a wider spectrum of producers and the pre- vention of undue concentration of wealth and economic influence.

21. I may now sum up the main considerations which have guided me In framing the next year's Budget in the ll?ht of the developments, to which I have referred so far. First and foremost, the Budget has to be production oriented. creating a hoitr¹- psychological climate for a greater regard to savings and efnei- oicy all round Secondly, while investments In progress have to be completed

as speedily as possible in the interest of better performance of the economy and while the claims of national security have to be met, every effort has to be made to restrain Government expenditure, particularly on general administration and on new schemes of development with a long gestation period. With the res- traints just indicated it is proper to state that it is the intention of this Govern- ment to establish progress and press on with such enterprises In the public sector as ara benerioient to the country. The Bokaro Steel Plant made possible with the assistance of the U.S.S.R. to whom we arc grateful is one such project. I have also endeavoured to estimate revenue and capital receipts on as realistic a basis as possible.

22. Coming now to the estimates of next year's revenue expenditure, Honour- able Members would appreciate that certain Increases are almost automatic in the sense that they result from decisions already taken in the past or from Con- stitutional obligations. Transfers to Stated on the basis of the recommendations of the Fourth Finance Commission will, for example,' lead to increase in expendi- ture of Rs, 77 crores under Statutory Grants and Rs. 67 crores under States' share of Union Excise duties. The cost of servicing debt will increase by Rs. 42 crores and export promotion measures and the various tax credit schemes already adopted will result in an Increase in expenditure of another Rs. 24 crores. If these special items and certain self-balancing items such as PL 480 Grants, Emer- gency Risks Insurance Scheme and write back of Capital Grants are excluded, revenue expenditure next year will show an increase of only RE. 46 crores. While Plan expenditure on revenue account is less by Rs. 36 crores, the increases are accounted for by Rs. 29 crores under Defence Services, Rs. 14i crores unaer Police, mainly for requirements of bolder security, Ra. Hi crores under grants for drought relief and Rs. 6 crores to Union Territories to cover their budgetary gaps. Administrative Services proper, excluding Police, would cost Rs. 99 crorea next year as against Rs. 93 crores this year and Rs. 83 crores last year. The ia- erease of Ra. 6 crores next year includes Rs. 2i crores on account of next year's election expenses. The balance of the increase In revenue expenditure after excluding reductions under subsidies and aid, namely, Rs. 18 crores, occurs most- ly under non-Plan developmental heads, and Includes committed expenditure arising out of the completed Third Plan Schemes. Honoura~blo Members would appreciate that the small Increases I have just mentioned represent a considerable effort at economy and restraint. Most of the increases are in respect of obliga- tory expenditure or Items like Defence expenditure and border security which In view of the circumstances that we have to contend with, cannot but be re- garded as absolutely unavoidable.

23. Disregarding certain se^-balancing items, next year's revenues should show an increase of Rs. 191 crorea as compared to the revised estimates for the current year. Customs duties axe estimated to yield Rs. 29 crores more mainly because the increases in duties already made would yield results now over a lull year. Receipts from Excise duties are expected to increase by Rs. 108 crores mainly in response to larger production and clearances of petroleum products from the new refineries as also of cement and Iron and steel. Considering tne experience this year and the fact that the current year's receipts include a cmisi- derable portion of tax from voluntary disclosures, I have assumed that receipts from Corporation and Income taxes next year will be higher by only Rs. 20 crores.

24. Taking Into account the factors that I have mentioned and a number ol other miscellaneous Items, total revenue receipts next year at existing levels of taxation are estimated at Rs. 2017 crores and expenditure on revenue account at Rs. 2407 crores. The revenue surplus of Rs. 210 crores next year will thus be Rs. 72 crores less than the revised estimates for the current year.

25. On capital account, I have assumed external borrowings of Rs. 4flO crnrea as against Rs. 490 crores in the current year. This is exclusive of fresh accre- tion of PL 480 funds of Rs. 230 crores. Market loans have been assumed at Rs. 280 crores, about the same as in the current year. However, since repay- ments next year are substantially higher, the net market borrowing at Rs. 88 crores next year would be Rs. 22 crores less than that during the current year. It is, therefore, my hope that the target for market borrowing next year will be fulfilled without any significant support from the Reserve Bank over the year as a whole. Honourable Members would recall that since last October, we have floated emergency market loans on tap. In view of the consolidated market bor- rowing programme now proposed for the next year, the emergency loans on tap will be discontinued at the end of March.

[PAJTT l-ma. 1] TH" GAltTTE OF INDIA BXTRAOUHNAftY r&^

26. On Small Savings and Annuity Deposits, I have assumed no net increase over the anticipated outcome OL the current year. After taking account ol receipts under repayment o± kau.;, accretions undor miscellaneous debt and depuiit heads ana iii^ rovonu.- surplus of Ra. 2KI crnre'j, the total budgetary resources in sijht for total cM:'jii;:l outlay next year, both Plan and non-Plan, would be ol the order of Rs. 1835 crores.

27. I have considered whether the capital outlay next year could not be res- trained wilhin ttv limits set by resources in sight to which 1 have? just referred. Unfortunately, while total capital outlay ne\t year, excluding the notional adiust- ment of PL 480 loans, and loan disbursements, would show a significant reduc- tion over the current year's level, it has not been possible to restrict the outlay* within the strict limits set by resources in sight. Here again, there are a num- ber ol ILems such as debt repayments where an Increase in outlay is unavoid- able. Debt repayments next year at Rs. 314 ciores would be larger by Rs. 45 crores in relation to the current year. While there Is practically no increase in defence capital outlay next year, an additional provision of Rs. 20 crores is re- quired for giving loans for the purchase and distribution o* !• rtili?ers, seeds and pesticides and of Rs. 12 crores for loans for drought relief. Tho provision for contribution to financial institutions will also be larger by Rs. 7J crores.

28. In regard to Plan schemes also, expenditures on continuing schemes have to be provided for in the interest of speedy implementation, especially whett foreign exchange provision for their import requirements has already been made. Some of the important Increases that have been pronos_-d in the next year relate to the Bokaro Steel Plant and the development of Atomic Energy which hav* been allotted Rs. 13 crores and Rs. 18 crores more respectively. On the other hand, Plan assistance to the States and the Union Territories bv way of loans has been curtailed by Rs. 135 crores and capital outlay on Railways has been, reduced by Rs. 59 crores. On balance, and after taking into account a number of miscellaneous items, total capital outlay including loan disbursement and debt repayment next year will amount to Hs. 10i>2 erores thus showing a reduction ot Rs. 296 crores as compared with the current year.

29. In termg of Plan, outlay, the Centre and the States next year are expected to spend Ra. 2081 crores, that is, Ra, 144 crores less than the current year's budget- ed Plan outlay of Rs. 2225 crores. The State Plans excluding that of Nagaland will account for an outlay of Rs. 926 crores and the Central Plan, an outlay of RE. 1155 crores. Of the States' outlay, Rs, SOS crores will be financed by Central assistance and Rs, 421 crores from the resources of the States concerned. The Centre's Plan will be financed to the extent of Rs. 189 crores from the Internal resources of the Railways, the Posts and Telegraphs Department, the Hindustan Steal, the Indian Oil Corporation, the Oil and Natural Gas Commission and other public sector enterprises. Including the foreign exchange resources tu be mobili-ed by them directly. For the balance ot R.s. 1471 crores, Inclusive of Rs. 505 crere* of Central assistance to the States, Rs. 56 crores for the Union Territories and RE. 4 crores for Nagaland, as also Rs. 143 crores for the Central Plan on Revenue account, provision has been included in the Budget.

30. The distribution of the Plan outlay under different heads takes Into account the higher priority that needs to be Riven at the present stjge to quick; yielding programmes of agricultural development and to the speedy implementation of projects already in hand. To a certain extent, a comparison hotwiea the Plan outlay next year with the Plan provision for the current year is misleading In the sense that a part of the outlay included in the Plan during a Plan period b_>- comes committed and gets treated as non-Plan outlay from the beglnnin { of Ihe next Plan period. Even so. there is no dpnyinfi the fact that the exigencies of the budgetary situation have made it necessary to exercise the utmo i caution In regard to both Plan and non-Plan expenditure durlTg the comins y a-. The gap between resources in sight and total provision for expend'ture in the Centre's- Budget to which I will now turn has to be Judged in the light o* this considera- tion.

31. The overall budgetary position for the next year may now be summarised In conventional terms as follows. The revenue account will yield a surplus of Ra. 210 crores. The total disbursement on ca-jltal account, excluding the notional adjustment of PL 480 Loans, will be Rs. 1952 crores. This wll be met, apart from the revenue surplus, by internal and external borrowi gs of Rs. 744 crorea, collections under Small Savings of Rs. 135 crores, fresh accretl-n to PL 480 Funds of Rs, 230 crores, Annuity Deposits of Rs. 44 crores, repayment of loan* of Ra. 370 enrtea and receipts under miscellaneous debt and deposit heads ol Rs. 102 crores, leaving an overall deficit of Rs. 117 crorw.

32. In the light ot what 1 Lave saut earlier, Honourable Members would have gathered that I would have very much liked to avoid a deficit by the simple method of containing revenue expenditure and capital outlays within the re- sources available. 1 have explored this possibility to the maximum. Revenue expendiime has been hcia iluwu. lu the case of Plan outlays, however, it Is necessary to provide J!or what is required for securing essential and productive •development, partici^arly in regard to agriculture and other continuing schemes. Consistent with this, Plan outlays have also been kept down to the minimum. A further reduction would retard agriculture and jeopardize the growth of the economy

33. It Is, therefore, imperative for me to cover the deficit by raising addi- tional resources. This I have sought to do by methods which cause minimum •disturbance and hardship and ensure maximum simplicity. Honourable Members would recall that in presenting the l^st Budget my predecessor had emphasised the importance of stability and simplicity in the tax structure in the interest of providing a proper climate of expectations for orderly growth. The supplemen- tary budget introduced last August took this process a step further, particularly in regard to the rationalisation of import duties. I have kept these basic objec- tives clearly In view in proposing measures for raising additional resources. Even in so doing, I have sought to carry the process of simplification a step further by proposing a number of changes and reliefs. I shall now explain my proposal* in detail.

34. Starting with indirect taxes, I propose to leave customs duties alone as they were rationalised a'ld raised only a few months ajj;o. I, however, propose to Increase the excise duties on a few commodities, not simply for raising revenue but also for restraining consumption where this can be done without too much hardship and increasing exportable surpluses. Two commodities, namely, optical bleaching agents and synthetic detergents will be subject to duty for the first time.

35. The excise duty on crystal sugar will be raised from Its. 28:85 to Ra. 37 per quintal. Correspondingly, the duty on khandsarl will also be raised. Taken together, these will bring in additional revenue of Rs. 21-93 croreg, Assuming the duty Is passed on fully to the consumer, the incidence will be only 8 to 9 palae per kilogramme of crystal sugar. As supply is expected to be adequate to meet demand, there is some prospect that the whole of the duty may not be parsed on to the consumer.

36. The duty on cigars and cigarettes, as well as on unmanufactured tobacco -tor use in the manufacture of cigarettes and Dipe mixtures, will also be raised bj about 25 to 30 per cent. These increases are expected to yield additional revenue of Rs. 9'01 crores. The incidence of this increase will be about 5 palse per packet of expensive cigqrettes and 1 to 2 palse per packet for the relatively cheaper ones.

37. The exri.se duty on diesel oil not otherwise specified, that Is, light dlesel, Is proposed to be raised by Rs. BO per kilo litre in order to bring it in line with duties on other petroleum products, so as to avoid undesirable mixtures. The additional revenue expected is Rs. 6-35 crores.

38. In order to restrain consumption of finer qualities of cloth which require Imported cotton, I propose to increase duties on cotton yarn and cotton fabrics selectively. There will he no increase in the case of coarser counts of yarn. In the case of fabrics, the Increase will be only in respect of processed products such as mercerised shrink-proof and organdie processed varieties. The additional re- venue from increases in the duty on yarn is expec'.ei to be Rs. 7"23 crorea and on fabrics Rs, 6-3 crores. Correspondingly, the duties on rayon and synthetic yarns are also being slightly raised and the revenue yield will be Rs. 50 lakhs.

39. The excise duties on a few other items, namely, sodium silicate and carbon dioxide are also being raised and the slah concessions on paper boards are being reduced. The additional revenue expected from these three items is Rs. 1-46 crores. The new duties on optical bleaching agents and synthetic detergent* are •expected to bring in Rs. 58 lakhs. In order to give some relief to small establish^ meats which manufacture motor vehicle trailers, the ad valorem duty of S per cent on such trailers as are manufactured In establishments employing not more than five workers will be abolished. Altogether, the additional yield from the change* In excise duties proposed, together with rorres^oniing Increase In cotmttrr- vailhig duties, will be Rs. 52-86 crores of which the States' share wi'l be Rs. 10-07 mires I he Central lesouices, thei-efore, will be augmented by Ha. 42TO crorea.

J"A*r h-m*. i) T Hl GA2XTTS Of INDIA EXTRAORDINARY

I oj

40. I shall now turn to direct taxes. In the field of personal taxation, I pro- pose to Increase the existing limits of total Incomes not chargenble to tax by Rs. 500. Similarly, I propose to raise by Rs. 500 the existing pe. sonal allowances on which tax relief is given to resident individuals and Hindu undivided families. Thus, the exemption limit in the case of individuals will be raised from Rs. 3,000 to Rfl. 3,500, the personal allowance of an unmarried individual, 1rom Hs. 2,000 to Rs. 2.500, and the personal allowance of a married individual with more than one dependent child, from Rs. 4,300 to Rs. 4,800. The effect of these will be a reduc- tion In revenue by Rs. 3 5 crores. The principal reason is to provide a measure of relief to a class of tax payers who merit their burden being lightened. But these measures will also accelerate the performance of the task of the tax authori- ties by eliminating a large number of small assessments and thereby enabling them to devote more aud s>wift attention to tax collections from higher income*

41. For similar reasons, I also propose to raise the exemption limit for an- nuity deposits from Rs. 15,000 to Rs. 25,000. By this measure, the number of people required to make annuity deposits will be reduced sizeebly from 1,78,000 to 80,000, while the reduction In receipts will only be of the order of Rs. 7 croreg, after taking into account the corresponding gain to income-tax of Rs. 2 42 crorea. I have, however, provided that even those in the income range of Ra. 15,000 t* Rs. 25,000, who desire to make annuity deposits, will be enabled to do so and obtain the consequent tax relief on the amounts so deposited. Another am all change which I propose to make is to provide that persons on attaining the age of 70 will hereafter be allowed to opt out of the Annuity Deposit Scheme, irres- pective of whether they were liable to make annuity deposits before or not.

42. Having given these reliefs, I propose to levy a flat special surcharge ot 10 per cent of the amount of income-tax and lurrharge In respect of earned in- come and unearned income, payable by all non-corporate assessecs. The addi- tional revenue from the special surcharge will be Rs. 25-6 crores.

•43. In regard to other personal taxes, I propose to abolish the expenditure tax. I do so far administrative reasons. The yield from this tax is very little, namely, Rs. 00 lakhB or thereabouts which has not been commensurate with the burden It puts on the administration and the inconvenience it causes to the assessees. I recognise that on purely economic grounds, it would be a very sound principle to replace the income-tax Increasingly by a tax on expenditure, so that the maximum Incentive Is provided for savings. Given the substantial contribu- tion made by income-tax to our revenues and the administrative difficulties an* Inconvenience to assessecs involved IT the a=snssment of expenditure, it is, how- over, not possible to attempt this substitution on any signiflrant scale at tb* present stage.

44. I also propose to revise the rates of gift tax in order to bring then more closely in line with the rates of estate duty. In the process, the rates ap- plicable to different slabs of value of gifts are also being reduced- Thus, the exemption limit is being raised from Rs. 5,000 to Rs. 10.000 the rate on the slab from Rs. 10,000 to Rs. 25,000 is being reduced from 8 per cent to 5 per cent and the rates on subsequent slabs, up to Rs. 15,00,000, by varying percentages. The present maximum marginal rate of 50 per cent will, however, remain unchanged, but it will operate on the slab beyond Rs. 15 lakhs. I also propose to deJet* the provision for the aggregation of the value of gift3 to the same donee over a number of years. This provision was designed to prevent avoidance of estate duty as well as gift tax at higher rates. But it is a measure whose practical utility is not established, specially if the time and trouble it involves on tlie part of both the administration and the assessees are taken into account, But to Borne extent to balance this measure. I propose to provide, by amendment of the Estate Duty Act. that gifts made within two years of death will be treated as part of the estate. At present the relevant period is one year. I have also taken this opportunity to raise the rate* of estate duty on certain intermediate slabs, namely, Rs. 1 lakh to Rs. 2 lakhs, from 8 per cent to 10 per cent, Rs. Zi lakhs to R3. 5 lakhs, from 15 per cent, to 25 per cent and from Rs. 5 lakhs to Rg. 10 lakhs, from 25 per cent to 30 per cent. The loss in revenue as a result of changes in the gift tax will bo Rs. 1-71 crorea, whereas the additional revenue from the changes in the estate duty, which will go to the States, win be ap- proximately Ra. 70 lakhs.

45. I propose to make another change In respect of estate duty. Honourable Members will recall that my predecessor had assured this House that the estate* of member* of police forces kill In action in defending the borders of the country would be exempted from estate duty in the same manner as members of the armed forces. I have made a prorUIon for thia. I feel this is a recognition, though small, of the courage and determination of members of this force tit defending our country.

a b l e, Members are aware that at present when an equity shareholder i* H

w h th * >a l l y' X would lltoj to refer to one change In regard to personal taxation Hono^rllP H ™^ a t r a n s l t l on to ™y proposals in rega d to corporate taxation X 'r •Hotted a bonus share, he is hable to pay income-tax on the notional capital gain accruing to him. I propose to discontinue this provision and to provide that liability for tax will arise only when the capital gain is actually realised The toss to revenue from this measure will be only Rs. 7 lakhs.

47. I shall now turn to corporate taxation. Here again, as In the case of per- sonal taxation, I propose to provide certain reliefs which I consider necessary for providing a suitable climate for growth. At the same time, I propose to increase the general rates of tax on corpo ate incomes by approximately 10 per cent I shall now explain these proposals in some detail.

48. The existing tax of 12'5 per cent, levied on domestic companies with reference to the amount of their bonus issues will be discontinued. The loss to revenue will be only Rs. 9 lakhs.

49. At present, the dividend tax of 7-5 per cent on companies to which it la applicable is, ordinarily, leviable on the whole of the dividends declared or dis- tributed during the previous year. 1 propose now to provide that this tax will be leviable only on that part of the equity dividend declared or distributed which is in excess of 10 per cent of the paid-up equity capital. The loss to revenue ou this account is estimated at Rs. 4-8 crores.

50. I also propose to reduce the rate of surtax provided under the Companies (Profits) Surtax Act, 1954, from the existing level of 40 per cent to 35 per c e nt The loss to revenue on this account is estimated at Rs. 2'5 crorea.

51. As already mentioned, I propose, simultaneously, to raise the effective rate* of the basic corporate tax on companies. Thus, the rate of tax on profits from life insurance business will be raised from 47; S per cent to 52-5 per cent. In the case of domestic companies in Which the public are substantially interested with a total income not exceeding Rs. 25,000, the rate of tax is being raised from 42-5 per cent to 45 per cent, and the rate of tax on such companies with higher Incomes, from 50 per cent to 55 per cent In the case of closely-held domestic companies also, the existing general rate is being increased from 60 per cent to 65 per cent, and the concessional rate applicable to industrial companies on the first rupees ten lakhs of their income from 50 per cent to 55 per cent. In the case of foreign companies, royalty and technical service fees under certain approved agreements will bear the same effective rate of 50 per as at present but their other income will be taxed at 70 per cent, as against 65 per cent at p-esent Similarly some fiscal encouragement needs to be given to our Industrie! to en- courage them to provide technical "know-how" and technical services to newly developing countries. I propose, therefore, to provide for a concessional rate of tax on dividends received by an Indian company from a foreign company on sha-es allotted to the Indian company in consideration for supplying technical "know-how" or rendering technical services. This concessional rate will be Z!> Her cent A simi'ar concessional rate of tax of 25 per cent will also be charged on royalties, commissions, fees, etc., received by an Indian company from a foreign company for supply of technical "know-how" and technical services. The net sain to'revenues as a result of the changes in the basic rates of corpo ate taxation fa estimated at Rs. 43:46 crores, after allowing for the consequent reduction of Rs. 56 crores under surtax.

52. Honourable Members are aware that at present we have separate schedules of priority industries, one for equalifying for development rebate at the %K™T rate of 35 per cent £md the other for a concessional treatment In respect of the tw-.iV corporate tax I propose to extend the list of priority industries for the SSfoaeWthl developmerTrebate by inclusion of three more Industrie!, namely Ke manufacture of tea, newsprint and P ? ^* " n t T t oe r Sl 7^ R win iim anolv for purposes of concessional treatment in the rate ol tan. AS • measure of simplification, however, I propose to modify the form of the concession. At Present S p e c i al rebate on income-tax and surtax is granted to camp*™* on their income Fm priority industries. I propose to replace thli by a *™iKht r d u c t i c n of 8 per cent of the profits from priority Industries in computing; th" S taxable income of the companies ~"cerned. Thb £ e rt ™ m er of givmg a rebate should greatly simplify the computation erf the tax liability.

co At o r e Sent 7!5 per cent, of development reb"te actually allowed i* **""}*•*

tfU*r I-&K. 1] JHff OATETTB OF INDIA EXTRAOTLDHTAHY HI

64. In order to provide a further Incentive for the extension and renovation of our tea plantations, I propose to liberalise the existing provisions in the law in regard to the grant of development allowance. Firstly, the rate of develop- ment allowance for new planting will be increased from the existing quantum of 40 per cent, of the actual cost of planting to 50 per cent, thereof and, for replant- ing, from 20 per cent, to '.it> per cent. Secondly, I propose that the allowance may be granted in two stages, first, for the year following the year in which the land is prepared for planting or replanting, with reference to the expenditure incurred up to that year, and, as to the balance, for the fourth year. This will replac* the existing provision under which the whole of the allowance is granted only for the fourth year.

M. Th" rate schedule of depreciation allowable in respect of buildings, furni- ture, plant, machinery, etc., has become highly complicated. It is necessary to review the position In the light of recent developments and to make appropriate changes BO that the schedule may be both rational and simple. I propose, there- fore to Initiate a complate review during the next few months. The recom- mendations of the Worklnjj Group on Plantations Labour Housing will also be taken into account during this review. Meanwhile, I propose to provide that tn" cost of small item* of plant and machinery costing not more than Rs. 750 per unit mav be allowed to be depreciated in full in one year. 1 also propose to allow initial depreciation of 20 per cent on the cost of new buildings erected by em- ployers and occupied or u

88. At present when development rebate is allowed, the plant and machinery concerned is required to be retained in the possession of the assessee for a period ot 8 yean; otherwise, the rebate already allowed is liable to be withdrawn. When Buch plant, however, is transferred in the course of amalgamation, including- merger of a subsidiary company with the parent company, the development rebate ia not withdrawn, This Is however, subject to the qualification that the merged subsidiary company ii an Indian company. I do not see any reason for the exclu- sion of a foreign subsidiary as it comes in the way of merger of such companiea with their parent companies. I, therefore, propose to withdraw this disqualifica- tion.

57. At present, approved financial corporations which are engaged in providing lone term finance for industrial development In India are entitled to deduct, in the computation of their profits, an amount up to 10 per cent, of their total in- come carried to a special reserve account. In order to enable relatively small financial corporations to build up their financial resources at an accelerated pace, I propose to Increase this deduction from If) per cent, to 25 per cent, of the total Income, in cases where the paid-up capital of the corporation doea not exr-^1 Rs 3 crores. This will benefit mainly those financial corporations whlctt are engaged In fostering Industrial development on a regional basis.

5R I propose to make a number of changes relating to clos"ly-held companies.

Firstly in determining whether a company -is to be regarded aa cloMly-held, I nroDose that for such of them as are mainly engaged in certain manu- facturing activities or in shirj-buildinff. the test of the public being substantially interested should be regarded as satisfied if 40 per cent of the equity is held by the Government, public corporations or members of the public, etc., instead of 60 per cent., as at present. Secondly, companies, which are mainly engaged m shirf building will not be compelled to distribute then- profits upto the statutory T>C centage. Companies which are only partly engaged in manufacturing activi- ties wi'l also not be required to make a compulsory distribution of their profits relating to such activities. Finally, certain types of expenditure mcurred by a elosely-held company for earning its income are at present not allowed for pur- poses of determining the tax liability. I see, however no reason why such expen- diture should not be allowed as a deduction In computing the distributable incomer of such a company. I propose to provide for this.

59 Honourable Members are aware that certain fiscal concessions have "lre"dy been announced in respect of the National Defence Remittance Scheme. Thus Si Ra°ns arising on the sa^e of bank certificates obtained under the ^ h e m* would be liable to tax at the concessional rate of tax applicable to long-term

I have made provisions for these concessions m the relevant Acts.

60. With a view to encouraging small savings, the requirement of deduction of tax at source will be waived, subject to certain conditions, in the case of small investments in Government securities. Similarly, the interest on the new series of National Savings Certificates to be issued through the State Bank will bear the same concessional treatment as the existing series of National Savings Certificates. In the case of income from units of the Unit Trust of India, income upto Rs. 1,000 will be excluded from total income for purposes of tax assessment in the rase of all assessees irrespective of the amount of their other income. This should make for simplification as well as greater incentive for investment in the Unit Trust.

61. Finally, I would like to mention some other changes that 1 have proposed essentially in the interest of simplification or better administration. I p.opose that the total income of assessees should be rounded to the nearest multiple of ten rupees and that the amount of tax. penalty, refund, etc., should be rounded to the nearest multiple of one rupee. As a measure of curb on ostentatious con- gumption, I propose that for the calculation of depreciation on motor cars acquired for fhe purposes of a business or profession, purchase price above Rs. 25,000 will be ignored. Those who are responsible under the law for deducting tax at source will be charged, in case of default in fulfilling these obligations, simple interest ot the rate of 6 per cent, per annum for the period of the default. Another amend- ment relates to exemption of the income of charitable trusts and institutions from income-tax. It 13 being provided that a charitable trust or institution will forfeit the right to exemption if any part of its income or property is used or applied direct^ or indirectly for the benefit of those who might be closely associated with the trust or foundation as authors, substantial contributors or their relatives.

62 Before I sum up the effect of the tax proposals which I have exp'ained so far i' would like to make two proposals designed to raise resources for the benefit of the States. The first is to increase from 2 per cent, to 3 per cent, the rate of Central Sale* Tax leviable on inter-State sales. This will come into effect from 1st July 1966. This increase will yield an additional revenue of Rs. 19 crore.s to the States in a full year and Rs. §• 5 crores in the year 1966-67. Since the new rates will become effective from 1st July, 1966 and since collections are carried over from one quarter to the other, the additional yield dunnc the next financial year will accrue only during two quarters of the year. Similarly, collections in the Union Territoies which fo-m part of the Consolidated Fund of India will in- crease by Rs. 1 crore in a full year and Rs. 50 lakha in 1966-67.

63. The second proposal is to raise from 2 per cent to 3 per cent, the ceiling, prescribed in respect of salea tax on goods declared to be of special importance in inter-State trade or commerce. This is a permissive amendment and would enable the States to reflx the rates of local sales tax on coal, cotton, cotton yam, hides and skins, iron and steel, jute, and oil seeds within the ceiling of 3 ^ ^ 5 ? " k ie they so desire. If all the States raise their local sales tax rate to the permissibly ceiling of 3 per cent, from the pescribed date of 1st July 1966, it would give them an additional revenue of Rs. 7- 5 crores in the next financial year. During a f ul year, however, the additional revenue, would be Rs. 15 crnres,

64. 1 shall now sum up the effect of my proposals. The 1additional yield result- ing from the changes in the excise duties proposed will be Ks. 52-86 crores of which the share of the States will be Rs. 1007 crores Thej gain to.the Central budget will, therefore, be Rs. 42-79 crores. The net effect of the changes m.regard to personal taxation would be a gain to revenue of Rs. 22-14 crores. The additional yield from corporate taxation, after taking Into account the concessions in regard to the dividend tax and surtax and the elimination of the tax m b ™ ' l " " " .^ be a eain to revenue of Rfl. 36 07 crores. The changes in the inter-State sales tax which I have referred to will bring In an additional revenue of R s 60 lakh, to the Centre The total revenue effect of my tax proposals is an addition of 101-31 crores On the capital account, there will be a reduction in the yield of annum** d r a s l ts of RB 9 39 crores. The total additional resources thus available for S e i ne the deficit of Rs. 117 crores will, therefore, be Rs. 92 crore.., leaving an -overall gap of Rs. 25 crores.

fl5 Honourable Members will note, however, that the changes I have Proposed will also augment the resources of the States to a sifoificant extent Apart from their share of Rs. 10-07 c r om In union excise and additional yield of Rs. 69 lakhs taSeBpe^oI estate duty, they will get Es 34 crores in a full year from the two t&anges that I have proposed in respect of the sales tax.

"w Tn mnrlusion may I say that I am keenly aware that bv the compulsion

restraint on both Plan and non-Plan expenditure. At the same time, there are minimum claims of defence, development and drought relief which we cannot disregard without peril. In distributing the additional burdens, however, I have endeavoured to make the spread equitable among the different sections of the com- munity and to put the strain where it can best be borne. 1 have also incorporated a number of reliefs and changes which are designed considerably to simplify the tax structure and which. I hope, will provide a better climate for orderly growth. Honourable Members would also appreciate, that, in presenting my budget pro- posals I have kept clearly In view the need to make the economy stable. To thi* end I would have liked to avoid deficit financing altogether and to budget for •om'e surplus If 1 have left a deficit of Rs. 25 crores, it is only because of my firm belief that a greater degree of resource mobilisation would be self defeating ma it would come in the way of the buoyancy of production and revival of con- fidence which are so urgently required. I cannot conclude my presentation of tno Budget without sharing with you, Sir, and the Honourable House a sentiment of optimism in this that we are together and determined to change our fiscal climate for the better. In whatsoever walk of life, in field or farm, factory or workshop, In offices or Parliament, Sir, I earnestly Invite every citizen of our country to •hare with us In this House the task of building a more prosperous and happier India, truly free from fear and from want.

S U M M A RY OF

S T A T E M E NT A R E V E N UE B U D G ET

R e c e i p ts

Budget 1965-66

(In crores of rupees) Budget 1966-67

Revised 1965-66

• C u s t o ms . . . . . . ..

419-50* 531-20

U n i on E x c i se D u t i es . . . . ..

819-19* 861-35

560-00 +0-52** 969-70 .

H

• C o r p o r a t i on T ax . . . . . ..

330-00

37i'6o

T a x es on I n c o me . . . . . ..

•>6o-oo

291-50

-42'27*'t. 340-00 +36-07", 270-00

+24-45** '

E s t a te D u ry

7-oo

7-40

T a x es on W e a l th E x p e n d i t u re T ax

14-00 o-75

+0-70**, 14-00 0-75 \

13-S0 T-5?

G i ft T nx

3-00

3-io

O t h er H e a ds . . . . . ..

23-87

24-76

3-00 \ —1-71 / 26-47;*\ +0-50**/ 360-62 9-45 22-56 0- 12

8-45 64-94 19-07 43-34 30-66 —130-45 D e b t. S e r v i c es . . . . . .. A d m i n i s t r a t i ve S e r v i c es . . . . .. S o c i al a nd D e v e l o p m e n t al S e r v i c es . . .. M u l t i - p u r p o ie R i v er S c h e m es e t c. . . .. P u b l ic W o r ks e t c. T r a n s p o rt a nd C o m m u n i c a t i o ns . . .. C u r r e n cy H nd M i nt . . . . .. M i s c e l l a n e o us . . . . . .. C o n t r i b u t i o ns a nd M i s c e l l a n e o us A d j u s t m e n ts , E x t r a o r d i n a ry I t e ms . . . . .. D e d u c t — S h a re of I n c o me T ax P a y a b le to S t a t es D e d u c t — - S h a re of E s t a te D u ty p a y a b le to S t a t es

316-46 9"36 24-19 o-12 4-22 8-20 62-55 26-69 35-07 80 72 —123-34 —6-79

296-73 yji 23-57 0-13 3-94 6'7S 61-69 25'47 34'8l 60-50 —121-27 —7-17

—7-11 \ —0-69** /

T O T AL

2469-51

2345-87

2617-12 \ r-ioi-51**/

D i s b u r s e m e n ts

C o l l e c t i on of T a x e Sj D u t i eB a nd o t h er P r i n c i p al

R e v e n u es . . . . . .. D e bt S e r v i c ts . . . . . .. A d m i n i s t r a t i ve S e r v i c es . . . . .. S o c i al a nd D e v e l o p m e n t al S e r v i c cn . . .. M u l t i - p u r p o se R i v er S c h e m es e t c. . . .. P u b l ic W o r kB e t c. T r a n s p o rt a nd C o m m u n i c a t i o ns . . .. • C u r r e n cy a nd M i nt . . . . ..

28-88 356-11 91-36 184-66 1-98 22-98 10-62 16-40 116-27

29-64 372-61 92-21 177-73 1-90 21-77 10-94 17-03 127-36

30-84 414*83 IIO-OS 195-57 2-03 23-83 10-94 17-82 15^-35 M i s c e l l a n e o us . . . . . .. C o n t r i b u t i o ns a nd M i s c e l l a n e o us

A d j u s t m e n ts : G r a n ts to S t a t es a nd U n i on T e r r i t o ry G o v e r n m e n ts S t a t e s' S h a re of U n i on E x c i se D u t i es O t h er E x p e n d i t u re . . . . .. E x t r a o r d i n a ry I t e ms . . . . .. D e f e n ce S e r v i c es ( N e t)

334*95 145-92 4-82 81-48 769-06

396-30 212-75 5 -ox 37-38 797-67

327-11 140-84 4-69 65-84 74§-74

2407-41

T O T AL

2116-48 2187-42

D e f i c it ( —)

+229-39* +282-09 +209-71 \ + 101-51**/ Surplus(+)

• n addition the measures introduced through Finance (No. 2) Act, 19651 were expected to yielsrf I Rs. 80-33 crores under Customs and Rs. 25-92 crores under union excise duties making atotfllofRs. 106-25 crorcuj thereby increasing the Revenue Surplus to Rs. 335 -64 crorc*.

•• Effect of Budget proposals,

- • •t E x c l u d es R ". 1 0 - 07 CT.ITTS 1 - - in ' t t i ' i h o -^ *• *

( P A KT I - S E C. I] T HE G A Z E T TE O¥ I N D IA E X T R A O R D I N A RY 1 15

E I N AL E S T I M A T ES

S T A T E M E NT B

C A P I T AL B U D G ET

( In c t o r cs of r u p e e s)

R e c e i p t^

Revised 1965-66

Budget 1966-67

B u d g et 1 9 6 5 - 66

R e v e n ue S u r p l us

282-09

229 39*

209 71 A - l O I - J I * */

P u b l ic D e bt :

270-00

284-00 1-21

286-37 53-57 R a i s ed in I n d ia . . . . .. F l o a t i ng D e hi ( o t h er t h an T r e a s u ry Bills; R a i s ed ah road :

459'85 325-00 L o a ns o t h v r t h ' jn VI. 4 80 L o a ns PL 4 30 L o a ns . . . . ..

588-86 Ko-oo

536-90 8o- 00

R e p a y m e nt ot L o a ns a nd A d v a n c es :

S c i l es and U n i on T e r r i t o r i es O t J . e rs

288-00 82'00 135'CO •iT s8

44'40 V

281-64 6T-00 134't'o 55-05 45-40 S m a ll S a v i n gs ( N e t) P r o v i d e nt F u n ds ( N o t) . . . . .. I n c o me R ax A n n u i ty D e p o s i ts ( N e t)

Z73'<9 (lO'OO 135-00 54-66 65'00

- 9 ' 3 9 * 'J

l Q I ' CO

—119-00 3 4 9 ' TZ 26-57 19-48 D e p o s i ts of PL 4"r> iMinJs ( N e t) . . .. Spect?.l DevelupiiiLiM F u rd ( N e t) . . .. Rnilwnyr.nL, P. & T. F u n i is ( N e t) . . .. • O t h er i ) e b i, D c p. ' . us etc, ( N e t) . . ..

150-00 109-74 37-80 48-40

143-16 48-23 27-25

2162-86 T O T AL

2166-24

2160-50 \ + 9 2 - 1 2 * */

D i s b u r s e m e n ts

•Capital E x p e n d i t u re :

. . . . . ..

C i v il D e f e n ce R a i l w a ys , P. & T

37^-37 H9'33 239-89 29-99

359-73 130-05 240-0 3^-83

301'93 I20-6O 180-60 24-25

R e p a y m e nt of D e bt :

193-60 120-59 R a i s ed in I n d ia R a i s ed a b r o ad

170-00 97-29

173-00 96-44

L o a ns a nd A d v a n c es :

S t a t es a nd U n i on T c n - i t o r i ei . . .. O t h e rs

665-93 345-00

703-46 349'94

823-38 393'4⁶

T O T AL . . ..

2083-30 2247-86 I952'5O

A d d — N a t i o n al t r a n s f er of l o an a s s i s t a n ce to t he

S p e c i al D e v e l o p m e nt F u nd . . ..

Ko-oo

80-co 325-00

T o t al D i s b u r s e m e n ts . . ..

2163-30 2327-86 2277-50

O v e r a ll D e f i c it (—)

—165-00

-i 2'94

• S u r p l u s +)

—117-00 \ + 92M2**/

• This would increase to Rs. 335-64 crores at explained under Statement A

** Effect of Budget proposals.

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I"A" i-fca n THI a u t rn or INDIA sXTftAo*fifNA*r uj

124 TM* Gxam or INDIA ixrRAomnwuw * i"At i-^"t ij

pUn IS** I] Tiff GAZETTE OF INDIA EXTRAORDINARY

I 2T

134 T t tl OAZTTTX OF BtfDIA EtTHAOKBWMtT [Fixr t-""a 1}

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