New Delhi, Feb. 28: Finance minister Jaswant Singh today unveiled a budget designed to make life a touch easier for the country’s ‘senior citizens’ as well as the lower and middle-income groups.
The finance minister announced a new ‘Antyodaya and Life Time Concerns’ programme. As part of this programe, state-run Life Insurance Corporation of India (LIC) would soon start a new monthly pension scheme —Varistha (elderly) Pension Scheme — which would would carry a interest rate of 9 per cent.
“The objective would be to ensure minimum returns of Rs 250 per month and maximum income of Rs 2,000 per month from the following month after the lump sum deposit has been made,” the finance minister told members in the lower house of Parliament.
“This would ensure the seniors have regular income for life after 55 years of age,” he said.
Among the other budget measures announced under the new programe are setting up of a Pension Fund Regulatory and Development Authority to chalk out the roadmap of development of Restructured Pension schemes, healthcare risk coverage to the country's poor and higher tax exemptions for the country’s 76 million senior citizens.
“Senior citizens would be allowed to make voluntary disclosure of their taxable income,” said Singh.
The finance minister also said the government proposes development of universal health insurance scheme at cost of one rupee a day for individuals, Rs 1.50 for a family of five, Rs two for a family of seven.
Also, as part of ‘Antyodaya and life time concerns’ are tax breaks for parents paying school fees. “Education expenses up to Rs 12,000 per child for two children will be eligible for rebate Under Section 88 of the Income tax Act,” said the finance minister.
Singh also pledged that income from housing projects for construction of residential units will be exempt from income tax while the tax rebate of Rs 1,50,000 for construction of new houses will stay.
However, the government citing lower interest rates as the means to a higher economic growth today reduced the coupon rate on small saving term deposits, which includes post office deposits and other government plans for individuals, to 8 per cent from the 9 current per cent.
Small savings pay a higher rate than bank deposits to help pensioners and salaried employees in the absence of a social security plan.
Economists said the country’s economy need to grow by an average 8 per cent annually for living conditions to improve.
However, the economy is expected to grow by only 4.4 per cent in the fiscal year to March 31. For the financial year 2001-02 the country attracted only $4.4 billion in foreign investment against China’s $ 52.7 billion.