New Delhi, Jul 6 (IANS): Promising to halve poverty by 2014 and add 12 million jobs each year, Finance Minister Pranab Mukherjee presented India's budget for this fiscal that hikes income tax exemption limit and steps up allocations for welfare schemes and infrastructure, while assuring high growth for the $1.2 trillion economy once again.

The income tax exemption limit for senior citizens was sought to be hiked by Rs.15,000, while that for women and others was stepped up by Rs.10,000. The 10 percent surcharge on personal income tax also was sought to be removed in Mukherjee's budget presented in the Lok Sabha.

New incentives to farmers, 45 percent jump in funds for Bharat Nirman, India's flagship rural reconstruction programme, higher spending on urban development, fresh impetus on energy security and revival of the divestment programme were among the highlights of the 100-minute Mukherjee's budget.

He also announced that the national food security act will be enacted soon promising 25 kg of rice or wheat per month to the poor at Rs.3 per kg, while announcing a new health insurance scheme for those below the poverty line.

For India Inc, the corporate tax rate was kept unchanged, even as the finance minister sought to reduce the burden on industry by abolishing the commodities transaction tax, but hiked the minimum alternate tax to 15 percent of book profits.

Mukherjee also promised to scrap the fringe benefit tax to please corporates, introduce a pan-India goods and services tax from April next year and gave 100 percent tax deductions to political donations.

Dressed in a smart white bandgala suit, the 73-year-old politician - who had presented his last budget as finance minister in the government of prime minister Indira Gandhi 25 years ago - said the United Progressive Alliance (UPA) government would push forward an agenda that will ensure 12 million new jobs each year and reduce poverty by half by 2014.

"The government also recognises the challenges," he said, referring to the global slowdown and the decline in India's high growth rate in the past year to 6.7 percent from over 9 percent in the preceding three years.

"The first challenge is to bring back the GDP (gross domestic product) growth rate to over 9 percent per annum," he said, setting the tone of what is his fourth career budget watched by Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi.

He said the other challenges included better governance and to ensure that the fruits of development reached across regions to touch the lives of every citizen - the 'aam admi' (the common man) as he called them.

Mukherjee said infrastructure would also be a priority, especially in areas like roads, highways and energy. "I, on my part, will ensure that sufficient funds are made available to these sectors."

The finance minister also said the unique identification plan, approved by the previous UPA government will be operational in 12-18 months and the process begin to hand over biometric smart cards to 1.17 billion citizens.

He said the total central government expenditure for the current fiscal year had been stepped up to Rs.10,20,800 crore, and compared it with Rs.193 crore that was set aside in the country's first budget over six decades ago.

Mukherjee said with industry still under the grip of global recession, the finance minister said he was providing additional incentives in the form of both direct and indirect taxes.

He enhanced the customs duty on items like set-top boxes, LCD televisions and premium textile goods to encourage domestic production and value addition.

Highlights of union budget for 2009-10

Highlights of the union budget for the current fiscal presented by Finance Minister Pranab Mukherjee in the Lok Sabha Monday:

- Fiscal deficit estimated at 6.8 percent of GDP

- National Housing Bank to get Rs.2,000 crore for rural housing funds

- Higher education outlay increased by Rs.2,000 crore over interim budget

- Geological Survey of India, Botanical and Zoological Survey of India to get Rs.15 crore each.

- National River programmes to get Rs.562 crore, up from Rs.335 crore earlier

- Rs.1,000 crore for reconstruction activities in the Aila-hit areas in West Bengal

- An additional amount of Rs.430 crore allocated to modernise police machinery in states

- Rs.190 crore budgetary support for civil aviation

- One handloom mega cluster each will be set up in West bengal and Tamil Nadu

- One powerloom mega cluster in Rajasthan

- At least 50 percent of the total rural women to be brought under the self-help group (SHG) network

- Banking network to be expanded to "unbankable" areas

-Expert group to be set up to advice on petroleum and diesel prices

- No change in corporate tax rate

-Centralised processing centre at Bangalore to streamline taxation

- Income tax exemption limit for senior citizens increased by Rs.15,000, for women and others by 10,000 each

- New indirect tax will be introduced in 45 days

- Fringe benefit tax abolished

- Duties on life saving drugs reduced

- Excise duty on petrol-driven trucks reduced

- Goods and services tax (GST) will be introduced April 1, 2010

- An alternative dispute settlement mechanism to be set up to settle tax disputes

- Lawyers brought under the ambit of service tax

- Tax exemption on profits in the natural gas sector extended

- Customs duty on LCD TVs reduced to 5 percent from 10 percent

- Five percent customs tax imposed on set-top boxes

- Rs.500 crore for the rehabilitation of displaced Sri Lankan Tamils and reconstruction activities in that country

- Aligarh Muslim University off-campus centres to be set up in Murshidabad in West Bengal and Malappuram in Kerala

- Allocation for the minority affairs ministry raised to Rs.1,740 crore

- Plan expenditure up 34 percent, non-plan spend up 37 percent

- Total spending increased to Rs.10.2 lakh crore

- Rs.420 crore for new IITs and NITs

- Commonwealth Games allocated Rs.3,472 crore

- National unique identification numbers to start rolling out in 12-18 months

- Paramilitary forces such as CRPF to get 100,000 homes

- Banking services in under-banked areas to be increased, scheme allocated Rs.100 crore

- Agriculture debt waiver extended by six months

- Outlay for national rural health mission increased by Rs.2,057 crore from the Rs.12,070 crore provided in the interim budget

- Allocation towards National Rural Employment Guarantee Act increased by Rs.39,100 crore

- Allocation for Bharat Nirman scheme increased by 45 percent

- Rs.20,000 crore for rural housing

- Rural electrification scheme to get Rs.7,000 crore more

- Tax department to work on early introduction of Saral 2 forms

- Stimulus for print media extended from June 13 to Dec 31

- Rs.1,000 crore to accelerate irrigation projects

- Agriculture development fund increased from Rs.2.87 lakh crore to Rs.3.25 lakh crore

- Market development assistance scheme for exporters increased by 148 percent to Rs.124 crore

- Pre-shipment interest subvention set at 2 percent for textile exporters

- Sufficient funds for infrastructure development

- Allocation for national highways development stepped up by 23 percent

- Allocation for urban poor schemes to be raised to Rs.39,730 crore

- LNG infrastructure to be expanded

- Allocation for Jawaharlal Nehru Urban Renewal Mission raised by 87 percent to Rs.12,887 crore