Union Budget 1998-99  

Key features of the Budget

Ministry of Finance, Govt. of India


Agriculture and Rural Development

Plan allocation to Ministry of Agriculture, increased by 58%.

Rs. 1627 crore for Rural Water Supply to benefit one lakh habitations.

Allocation for Watershed Development Prorgramme increased by 31%.

Allocation for Accelerated Irrigation Benefit Prorgramme increased by 58%.

Marginal increase in the price of urea to protect long term soil health by restoring the balance in the use of nitrogenous, phosphatic and potassic fertilisers.

New model law for agricultural cooperatives to replace the Multi-State Cooperative Societies Act , 1984.

Multi-pronged boost to Rural Credit

Rs.3000 crore for Rural Infrastructure Development Fund - IV.

Rs.500 crore increase in share capital of NABARD, Rs 100 crore from budget

NABARD to extend micro credit to 10,000 Self Help Groups covering 2 lakh families.

National Housing Bank to finance one lakh rural housing under the Swarna Jayanti Housing Finance Scheme.

Rs.265 crore for additional government investment in Regional Rural Banks

NABARD to launch Kisan Credit Cards.


Small Scale Industry

Exemption limit for excise enhanced from Rs.30 lakhs to 50 lakhs.

Greater access to bank credit for working capital (20 per cent of annual turnover doubled from Rs.2 crore to Rs.4 crore).

Measures to moderate the cost of bank credit to SSIs.

SIDBI to have greater role in SSI credit provision.

Overhaul of excise administration to cut down "Inspector Raj".

Private Investment in Industry

Burdens imposed by the "Inspector Raj" to be removed.

Dialogue with the State Governments to explore the consolidation of regulatory legislation relating to industry and exchange of best practices across States.

Double the inflow of foreign direct investment within two years.

90 day - time bound clearance of high value foreign investment proposals.



Target of 20 lakhs additional houses, 13 lakhs in rural and 7 lakhs in urban areas.

Rs.1600 crore for Indira Awas Yojana.

Rs.110 crore investment in HUDCO.

Urban Land Ceiling & Regulation Act to be repealed to enhance supply of land.

Liberal tax concessions to promote house building activity—

100 per cent tax deduction for first 5 years and 30 per cent for next 5 years.

Tax deduction for repairs etc. increased from 20% to 25%.

Tax deduction for interest on borrowing for self occupied property doubled to Rs.30,000.

Carry forward of loss from house property allowed to be set of against future income from it upto 8 years.

Tax deduction under S.80GG for rents paid being reintroduced.

50% tax deduction for World Bank - aided housing projects.

Exemption from wealth-tax to commercial complexes, let out properties etc.


Plan Outlay for Energy Transport and Communications increased by 35% - from Rs.45,252 crore to Rs.61,146 crore.

Government guarantees to convert outstanding dues of about Rs.10,000 crore from SEBs to NTPC, Coal India, etc. into investible funds for financing projects.

National Highways Authority of India to get Rs.500 crore.

Petrol cess of Rs.1 per litre to fund National Highways expansion.

Upto 10% of accretions to Provident Funds being permitted for investment in highly rated private sector securities.

Tax concessions for infrastructure.

Tax holiday to industrial undertakings in industrially backward States and districts extended upto 31st March, 2000.

Tax holiday to power sector extended upto 31st March, 2003.

Tax holiday for commercial production of oil extended to oil refining also.

Tax holiday in telecommunications sector extended to radio paging and domestic satellite services.

Education and Youth

50% increase in budget allocation for Education.

National Reconstruction Corps to mobilise youth for nation building.

Rs.100 crore for free education to girls.

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