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    Pragya Singh
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    The budget will lead to higher prices for goods and services due to a 2% rise in service tax and excise duty. Government spending is projected to be 15% of GDP for 2012-2013, while tax revenue will rise 10.6%, making fiscal consolidation difficult. The budget forecasts 7.6% real GDP growth and average inflation of 6.45% for 2012-2013. However, some critics say the budget lacks vision, will increase prices, and does not adequately address regional imbalances.

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    The budget will lead to higher prices for goods and services due to a 2% rise in service tax and excise duty. Government spending is projected to be 15% of GDP for 2012-2013, while tax revenue will rise 10.6%, making fiscal consolidation difficult. The budget forecasts 7.6% real GDP growth and average inflation of 6.45% for 2012-2013. However, some critics say the budget lacks vision, will increase prices, and does not adequately address regional imbalances.

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    7 views11 pages

    Impact of Budget

    Uploaded by

    Pragya Singh
    The budget will lead to higher prices for goods and services due to a 2% rise in service tax and excise duty. Government spending is projected to be 15% of GDP for 2012-2013, while tax revenue will rise 10.6%, making fiscal consolidation difficult. The budget forecasts 7.6% real GDP growth and average inflation of 6.45% for 2012-2013. However, some critics say the budget lacks vision, will increase prices, and does not adequately address regional imbalances.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 11

    Impact

    Of budget 2012-2013

    Budget and Individual


    The rise of service tax and excise duty by 2% will translate into 2-2.5% higher price for goods and services across the board.

    1. Budget and government


    15% of GDP is what the govt will spend in 2012-2013, while gross tax revenue rises 10.6%, making fiscal consolidation difficult.

    2. Budget and economy


    (a) The budget assumes GDP to grow by 14%, with real GDP to rise by 7.6%, inflation to be 6.45 on an average for 2012-2013. (b) 2% rise in service tax rate will garner just over 1% of GDP as service tax against the tertiary sectors share of 60% share.

    3. Budget and politics


    As there is no one big political idea in the budget, it will create no wave. The budget is anti-people and reflects the continued policy paralysis of the central govt.- J Jayalalithaa (Tamil Nadu) This is a lame duck budget of a lame duck govt. It doesnt end regional imbalance. The budget is inflationary and show lack of confidence- Nitish Kumar ( Bihar)

    4. Budget & States


    The budget expenditure outlay for states totalled over rs. 3 lakh cr.

    5. Budget & Business


    125 flat exise rate and an additional rs. 120 for a tonne are bad news for cement companies.

    6. Budget & Commodities


    The chrome ore export duty is a positive for steel firms, as it will increase supply in the domestic market.

    7. Budget & Finance


    rs. 60,000 cr. can be raised by infra finance companies via tax-free bonds in 2012-13.

    1. The excise duty on large cars has been increased to 27% to 22% earlier. 2. Long cigarettes will cost more with an increase in excise duty.

    Gold & Platinum


    Basic custom on gold has almost doubled. Import duty doubled to 4%.

    Platinums got costlier too

    Refrigerator & A.Cs will now get costlier due to custom duty.

    1. Silver price will get cheaper. 2. Custom duty on LCD & LED have reduced making television sets cheaper.

    Impact on stock market


    NTPC -

    Impact
    Govts market borrowings at rs. 5.70 lakh cr, 11.5% higher than revised estimates, will crowd out pvt sector investments. Reduction in withholding tax from 20% to 5% on ECBs will enhance funds flows to infrastructure firms. 93% fiscal deficit will be financed by market borrowing vis--vis 845 last year

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