Rail Budget 2013: Slow train or fast train?
Key expenditure measures
* Level of overall public spending increased only 3-4% in nominal terms from 2012-13, implying a sizeable real terms cut. Defence and development projects to be hard hit. Modest increase in existing welfare benefits.
* Fertiliser subsidy likely to be cut, saving 0.1-0.2% of GDP. Diesel subsidies to be phased out by mid-2014.
* Provision for introduction of the Food Security Bill—roughly 1% of GDP in a full fiscal year.
* Additional capital to public sector banks to help them meet Basel III requirements – 0.2% of GDP.
* Payment to states for loss of central sales tax revenues prior to the introduction of GST, possibly in December 2013 – about 0.1% of GDP
Key revenue measures
* No change in income or headline corporate tax rates. Tax slabs likely to be increased in line with inflation. Promises to clamp down on tax evasion and extend the tax net.
* An increase in the breadth of excise duties and the service tax.
* Government to target divestment receipts of R400bn, up from R300bn in 2012-13. Equivalent to 0.4% of GDP. Sale of additional telecom