• Taking the reform movement into its second generation for the current millenium.
• Bringing about reforms in the agricultural sector.
• Intensifying investment into the infrastructure sector
• Continuing financial sector reforms
• Human development through providing better educational opportunities
• Accelerating privatisation process and rationalising subsidies
• Reduction in non-productive expenditure and widening tax base.

Infrastructure

• Energy audit at all levels, with a specific program for reduction, and eventual elimination, of power theft
• Acceleration of reforms, including restructuring, in state electricity boards in partnership with the States
• Commercialisation of distribution with tariff determination by SERC and compliance thereof.
• Electricity bill 2001 to be introduced

Financial sector and capital markets

• Creation of a clearing corporation for orderly development of the debt market and forex settlement
• Setting up of an electronic negotiated dealing system by June 2001, to facilitate transparent electronic dealing in auctions of government securities
• Setting up of electronic funds transfer system within the next year
• Public Debt Act to be replaced by Government Securities Act.

Banking sector

• 7 more Debt Recovery Tribunals to be set up during 2001-02.
• Legislation to facilitate foreclosure and enforcement of securities in cases of default to be introduced.
• Banking Services Recruitment Boards to be abolished by July 31, 2001 or earlier. Banks to o all future recruitment themselves.

Foreign Investment

• The 40 per cent limit of investment in a company under the portfolio investment route by FIIs being increased to 49 per cent.
• Relaxing the 25 per cent dilution of holding in non-banking finance companies by foreign companies, provided they bring in a minimum of US $50 million.

Education

• All existing and ongoing schemes on elementary education to converge into an integrated National Education Program to cover all districts in the country by March next year.
• The base of IITs to be expanded, regional engineering colleges to be strengthened and new institutes to be set up with public private partnership.
• A new centrally sponsored scheme for computer literacy and studies in schools.
• 100 per cent deduction will be available for payments to engineering institutions also.
• New comprehensive bank scheme for educational loans to cover all courses in schools and colleges in India and abroad. Loans to be made available up to Rs. 7.5 lakh for studies in India, and Rs. 15 lakh for studies abroad.

Interest Rates

• Administered interest rates being reduced by 1 to 1.5 per cent points as of March 1, 2001. Government guarantees and tax incentives for these schemes to continue.
• The benefit of reduction in interest rates on Small Savings Deposits will be fully passed on to the States.
• Interest rate on loans portion of central assistance to state plans being reduced by 50 basis points.

Indirect taxes – excise

• Few items that currently attract CENVAT of 8 per cent will henceforth be charged at the normal rate of 16% except cotton yarn including sewing thread, LPG, kerosene and diesel engines up to 10 HP, which are being left at 8 per cent.
• Major rationalization in excise duty structure: about 80% of the revenue in respect of ad valorem duties will come from the single rate of 16% and about 17% from the combined rate of 32%.
• Food preparations based on fruits and vegetables being completely exempt from excise duty.
• Special surcharge on cigarettes and all tobacco products for funding of the National Calamity Contingency Fund.
• Increase in Excise duty on High Speed Diesel and motor spirit not proposed to be passed on to the consumers except for any technical corrections.
• Increasing the list of services brought under the service tax bracket.

Indirect taxes - customs duties

• Customs tariff would be brought progressively within three years and number of rates to be reduced to the minimum with a peak rate of 20 per cent.
• The surcharge of 10 per cent to lapse on 31 March 2001. Peak level of customs duty consequently declines from 38.5 per cent to 35 per cent.
• Increased duty on crude edible oils to a uniform rate of 75 per cent and on refined oils to 85 per cent.
• Customs duty on tea, coffee, copra, and coconut and desiccated coconut increased from the present 35 per cent to 70 per cent.
• Duty on import of second hand cars, old multi utility vehicles, scooters and motor cycles enhanced.
• Reduction in duty on IT and telecom.
• Customs duty on cinematographic cameras, projectors and certain other related equipment used by the film industry reduced from 25 per cent to 15 per cent.
• Customs duty on gold reduced from Rs. 400 per 10 grams to Rs. 250 per 10 grams.
• CVD on the imported consumer products to be charged on the basis of maximum retail price.
• Budget proposals are estimated to result in a revenue loss of Rs 2,128 crore.

Direct taxes

• Direct Taxes proposals to result in a revenue loss of Rs. 5,500 crore, which would be made up with tax buoyancy and increased voluntary compliance.
• Same rates as last year. Co-operative Societies, however, will henceforth pay 30% tax instead of 35 per cent.
• All surcharges payable by corporates and non-corporates removed except surcharge of 2 % for financing National Calamity Contingency Fund. Assessees having an income of up to Rs. 60,000/- will not be subject to any surcharge.
• 100 per cent deduction for donations to the National Trust for welfare of persons with autism, cerebral palsy, mental retardation and multiple disabilities.
• Even loss making companies to file their returns.
• Income tax deduction at source at the rate of 10% on income by way of commission or brokerage exceeding Rs. 2,500, except on transactions relating to shares and securities.
• Winnings from lotteries, crossword puzzles etc. will now be taxed at 30%. Income tax at the rate of 30% will be deducted at source from the winnings of television game shows and all similar game shows.
• Limit on income interest on time deposits for tax deduction at source being lowered from Rs. 10,000 to Rs. 2,500.
• Salaried persons in the lower income range having income up to Rupees one lakh will get an enhanced tax rebate at the rate of 30% in respect of their eligible investments under section 88 of the Income Tax Act, as against 20% at present.
• Tax exemption in respect of interest paid on External Commercial Borrowings withdrawn for such borrowings made on or after the first day of June 2001.
• The maximum limit of the deduction on certain interest income under section 80L being reduced to Rs. 9,000.
• The tax payable on the distribution of dividends of domestic companies and income in respect of Units of Mutual Funds and UTI being reduced to 10 per cent.
• In an effort to give a boost to primary capital market - long-term capital gains arising from the sale of securities and Units if such gains are reinvested in primary issues of shares of public companies exempted.
• Ten-year tax holiday for the core sectors of infrastructure
• The five-year tax holiday and 30 per cent deduction for next five years available to the telecommunication sector till 31 March 2000 being retrospectively reintroduced for the units commencing their operations on or before 31 March 2003. These concessions will also be extended to Internet service providers and broadband networks.
• The weighted deduction of 150% of the expenditure on in-house research and development in certain areas being extended to biotechnology as well for clinical trials, filing patents and obtaining regulatory approvals.
• Tax holiday for five years and 30% deduction of profits for the next five years to the enterprises engaged in the business of integrated handling, transportation and storage of food-grains provided.
• The development allowance available for tea increased from 20% to 40%. This additional allowance will be used only for re-plantation, rejuvenation, and modernization of tea plantations and processing facilities.
• The maximum amount of deduction available for interest payable on housing loans for self-occupied houses increased from rupees one lakh to rupees one and a half lakhs.
• Necessary legislative changes for transfer pricing being made.
• Foreign telecasting channels will henceforth be taxed in India.
• The time limits for issue of refunds, reassessment and reopening of assessments by the Income-tax Department reduced. Power to withhold the refund due to an assessee with-drawn.
• Similarly, there will be no requirement to obtain a Tax Clearance Certificate under section 230A from the Assessing Officer before transfer of immovable property. A fixed amount of penalty will be leviable for most of the defaults.

General

• NABARD to reduce rate of interest for funding the storage of crops, from 10 per cent to 8.5 per cent.
• Rs. 750 crore earmarked for rural electrification
• Essential Commodities Act, 1955 to be reviewed and restrictions on the free inter-State movement of foodgrains to be removed. The number of commodities declared as essential under the Act to be brought down.
• Phase I of the National Highway Development Programme to be completed by December 2003.
• Indian companies may now invest abroad up to $50 million annually through the automatic route without being subject to the three year profitability condition.
• Companies which have issued ADRs/GDRs may henceforth make foreign investments up to 100 per cent of these proceeds; up from the current ceiling of 50 per cent.
• Indian companies that have issued ADRs/GDRs, may acquire shares of foreign companies up to an amount of US $100 million or an amount equivalent to ten times of their exports in a year, whichever is higher.
• The deadline of March 2002 for dismantling of the Administered Pricing Mechanism (APM) in the petroleum sector to be adhered to.
• Phased programme of complete decontrol of urea by April 1, 2006 as recommended by the expenditure reforms commission.
• As a first step towards full decontrol of Sugar futures/forward trading in sugar to be introduced.
• Span of price control to be reduced substantially but Government will retain the power to intervene comprehensively in cases where prices behave abnormally.
• SICA to be repealed. The Companies Act to be amended in order to set up a National Company Law Tribunal.
• Prior Government approval for effecting lay-off, retrenchment and closure required by industrial establishments employing not less than 100 workers to be revised to those employing not less than 1000 workers. The separation compensation will be increased from 15 days to 45 days for every completed year of service.
• Contract Labour Act to be amended to facilitate outsourcing of activities and contract appointments. It would provide protection to labour engaged in outsourced activities in terms of their health, safety, welfare, social security, etc.
• All requirements of recruitment will be scrutinized to ensure that fresh recruitment is limited to 1 per cent of total civilian staff strength.
• Postal rates will be revised moderately to contain the rising postal deficit.
• Privatisation to be accelerated.
• An amount of Rs. 7,000 crore out of the expected receipt of Rs. 12000 crore from disinvestment will be used for providing restructuring assistance to PSUs, safety net to workers and reduction of debt burden.