Budget 2008

Budget 2008-09

Union Finance Minister Mr. P. Chidambaram on Friday (29-feb, 2008) presented the "Budget 2008" in the Parliament. The various initiatives taken by the government were outlined in the finance minister's speech.

The key highlights from the Budget speech relating to urban sector are depicted below:

Jawaharlal Nehru Urban Renewal Mission (JNNURM) is the main vehicle for improving urban infrastructure. It has also succeeded in driving reforms in urban governance and urban related laws. It is proposed that the Mission avails Rs 6,865 Crore this year(2008-09) in comparison to Rs 5,482 Crore in 2007-08.
The budget has significant benefits for the health sector. India will spend 15 percent more on health with special emphasis on HIV/AIDS, polio and healthcare for the rural and urban poor. The budget has allocated Rs.165.34 billion for the sector. The outlay will also be utilised to strengthen and upgrade the country's medical and public health system.

Centre will soon launch National Urban Health Mission (NUHM) in the next three to four months, which will focus on the urban poor. 429 towns and cities in the country, having a population of more than one lakh, would be covered under the scheme.

The Rashtriya Swasthya Bima Yojana will be functional from April 1, 2008. Initially it will start in states of Delhi and neighbouring Haryana.

The Minister also announced a five-year tax holiday for setting up hospitals in Tier-II and Tier-III cities. This is essential for spread of hospitals across the country and would mean more hospitals, less travel and congestion. This will also encourage big players to move into smaller cities while encouraging smaller players to start new facilities.
The budget proposes establishment of two Schools of Architecture and Planning in Bhopal as well as Vijaywada. Additional institutes of higher education to be set up in the Eleventh Plan period.
Revision of Dividend Distribution Tax (DDT) clause will reduce tax outflow of real estate companies, which launch Special Purpose Vehicles (SPVs) for their projects and the earnings from these SPVs are considered as dividends to the parent company.

The budget sees higher investments and allocations for ongoing schemes, especially towards roads, water, power, urban and rural infrastructure, which is positive. Budget 2008-09 is about raising our sights and doing more and doing better.