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Union Budget 2012-13

Key Highlights A Road


to Recovery
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Presented on 16 Mar 2012


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Finance Minister Shri Pranab Mukherjee Presented Union Budget 2012, the 81st Budget in India's history. Individually, this is Mukherjee's seventh annual Budget, Second-highest by any Finance Minister.

Applicable from 1st April 2012

Approach to the Budget


GDP is estimated to grow by 6.9% in 201112, after having grown at 8.4% in preceding two years. Key reasons for the interruption of Indian economy: euro zone crisis, economy, political turmoil in Middle East and rise in crude oil price. Growth moderated due to tight monetary policy. Economy is turning around as core sectors and manufacturing show signs of recovery. Twelfth Five Year Plan to be launched with the aim of "faster, sustainable and more

Overview of Indian Economy


GDP growth estimated at 6.9% in 201112. Current account deficit at 3.6% of GDP for 2011-12. Deterioration in fiscal balance in 201112 due to slippages in direct tax revenue and increased subsidies. India's GDP growth in 2012-13 expected to be 7.6% +/- 0.25%. Fiscal deficit for 2012-13 pegged atRs 5,13,590 crore, which is 5.1 per cent of GDP.

Subsidies and FDI


Subsidies Efforts to keep central subsidies under 2% of GDP in 2012-13. Over next 3 year, to be further brought down to 1.75%. Subsidies related to administering the Food Security Act will be fully provided for. Disinvestment Policy: For 2012-13, Rs 30,000 crore to be raised through disinvestment. Foreign Direct Investment: Efforts are on to arrive at a broad-based consensus to allow FDI in multi-brand retail upto 51%.

Finance and Infrastructure


Financial Sector: Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50% to new retail investors (whose annual income is below Rs 10 lakh), who invest upto Rs 50,000 directly in equities. The scheme will have a lock-in period of 3 years. Infrastructure and Industrial Development: During 12th Five Year Plan period, investment in infrastructure to go up to Rs 50 lakh crore, half of which is expected from private sector. Tax free bonds of Rs 60,000 crore to be allowed for financing infrastructure projectsin 2012-13. It was Rs 30,000 cr in 2011-12. IIFCL has put in place a structure for credit enhancement and take-out finance for easing access of credit to infrastructure projects.

Direct and Indirect Taxes


Direct Taxes: Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000. Upper limit of 20% tax slab proposed to be raised from Rs 8 lakh to Rs 10 lakh. Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts. Senior citizens not having income from business proposed to be exempted from payment of advance tax. Indirect Taxes: Standard rate of excise duty to be raised from 10% to 12%, merit rate from 5% to 6% and the lower merit rate from 1% to 2% with few exemptions. Excise duty on large cars also proposed to be enhanced. Indirect taxes estimated to result in net revenue gain of 45,940 crore

Education and Security


Education: To ensure better flow of credit to students, a Credit Guarantee Fund proposed to be set up. For 2012-13, Rs 25,555 crore provided for RTE-SSA representing an increase of 21.7% over 2011-12. Security A provision of 1,93,407 crore made for Defence services including 79,579 crore for capital expenditure. Any further requirement to be met. 3,280 crore proposed to be allocated for construction of office building of Central

Budget Estimates 2012-13


Gross Tax Receipts estimated at 10,77,612 crore. Net Tax to Centre estimated at 7,71,071 crore. Non-tax Revenue Receipts estimated at 1,64,614 crore. Non-debt Capital Receipts estimated at 41,650 crore. Total expenditure for 2012-13 budgeted at 14,90,925 crore. Fiscal deficit at 5.9% of GDP in RE 2011-12. Fiscal deficit at 5.1% of GDP in BE 2012-13. Central Government debt at 45.5% of GDP in 2012-13 as compared to Thirteenth Finance Commission target of 50.5 per cent. Effective Revenue Deficit to be 1.8% of GDP

More Details on Budget


Civil Aviation: Tax concessions proposed for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civilian aircraft. External Commercial Borrowing (ECB)to be permitted for working capital requirement of airline industry for a period of one year, subject to a total ceiling of US $ 1 billion. Power and Coal: Coal India advised to sign fuel supply agreements with power plants,having long-term power purchase agreements with DISCOMs and getting commissioned on or before March 31, 2015.

Governance and Employment


UID-Aadhaar n Enrolment of 20 crore persons completed under UID mission. Adequate funds to be allocated to complete enrolment of another 40 crore persons. Employment And Skill Development Allocation of `3915 crore made for National Rural Livelihood Missionrepresenting an increase of 34 per cent. Allocation for Prime Ministers Employment Generation Programme increased by 23 per cent to `1,276 crore in 2012-13. Skill Development Projects approved by National Skill Development Corporation expected to train 6.2 crore persons at the end of 10 years. 1,000 cr allocated for National Skill Development Fund

Health and Social Security


HEALTH No new case of polio reported in last one year. Allocation for NRHM proposed to be increased from `18,115 crore in 2011-12 to `20,822 crore in 2012-13. Pradhan Mantri Swasthya Suraksha Yojana being expanded to cover upgradation 7 more Government medical colleges. Social Security And The Needs Of Weaker Sections Allocation under NSAP raised by 37 per cent to `8,447 crore in 2012-13. In the ongoing Indira Gandhi National Widow Pension Scheme and Indira Gandhi National Disability Pension Scheme for BPL beneficiaries, pension amount to be raised from `200 to `300 per month. Lump sum grant on the death of primary breadwinner of a BPL family, in the age group 18-64 years, doubled to `20,000.

Agriculture
Agriculture Plan Outlay for Department of Agriculture and Cooperation increased by 18%. Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to `9,217 crore in 2012-13. Initiative of Bringing Green Revolution to Eastern India (BGREI) has Resulted in increased production and productivity of paddy. Allocation for the scheme increased to 1,000 cr in 2012-13 from 400 cr in 201112. Agriculture Credit n Target for agricultural credit raised by `1,00,000 crore to `5,75,000 crore in 2012-13. Kisan Credit Card (KCC) Scheme to be modified to make KCC a smart card which could be used at ATMs.

For a Common Man


Benefits/Advantage
Get bit more of salary due to change in Income Tax Slab, No tax on Interest till 10000, No Tax for unemployed Senior Citizen. Low cost and Free education More Benefits and low tax for Agriculture

Disadvantage
Pay more for all consumer goods like Mobile, Computer, Laptop, AC, Washing machine, Fridge, TV etc Pay more for Oils and fuels due to reduced Subsidy Pay more for Excise duty and Service Tax i.e. Pay more in restaurants, gyms, travel, tour, other all service Pay high for Cars and SUV

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