What is budget?

Budget is a Plan made for the future Income and Expenditure of any one

What is Union Budget?
The Union Budget of India, referred to as the annual Financial Statement in Article 112 of the Constitution of India, is the annual budget of the Republic of India, presented each year on the last working day of February by the Finance Minister of India in Parliament The budget has to be passed by the House before it can come into effect on April 1, the start of India's financial year

UNION BUDGET 2012-13
 The Union Budget of India for 2012 - 2013

presented by Pranab Mukherjee, the Finance Minister of India on 16th March 2012
 This was the 7th budget of his career  These

budgetary proposals would be applicable from 1 April 2012 to 31 March 2013

TAX

 Income tax exemption limit raised to Rs.2 lakh to provide relief of Rs.2,000  


for all assesses; 20 per cent tax on income over Rs.10 lakh, up from Rs.8 lakh Deduction of up to Rs.10,000 from interest from savings bank accounts Service tax rate raised from 10 per cent to 12 per cent to bring in Rs.18,660 crores No change in corporate taxes but measures to enable them better access funds Withholding tax on external commercial borrowings reduced from 20 per cent to five per cent for power, airlines, roads, bridges, affordable houses and fertilizer sectors Cinema industry exempted from service tax

INDIRECT TAXES
 Service tax to be shorter by nearly 40 per cent  Proposals from service tax expected to yield additional 

 


revenue of 18,660 crores Given the imperative for fiscal correction, standard rate of excise duty to be raised from 10 per cent to 12 per cent, merit rate from 5 per cent to 6 per cent and the lower merit rate from 1 per cent to 2 per cent with few exemptions Excise duty on large cars also proposed to be enhanced No change proposed in the peak rate of customs duty of 10 per cent on nonagricultural goods Duty-free allowances increased for eligible passengers and for children of up to 10 years Proposals relating to Customs and Central excise to result in net revenue gain of Rs27,280 crores

PERSONAL TAXATION
 GENERAL(BOTH MEN & WOMEN) TAX SLAB

Income Tax Slab (in Rs.) Up to Rs. 2 lakh Rs. 2 Lakh to Rs. 5 Lakhs
Rs. 5 Lakhs to Rs.10 Lakhs Above Rs. 10 Lakhs

Tax
No Tax 10% 20% 30%

 SENIOR CITIZENS (AGED 60 YEARS BUT LESS

THAN 80 YEARS)
Income Tax Slab (in Rs.) Up to Rs. 2.5 Lakh Rs. 2.5 Lakhs to Rs. 5 Lakhs Rs. 5 Lakhs to Rs. 10 Lakhs Above Rs. 10 Lakhs Tax No Tax 10%

20% 30%

 VERY SENIOR CITIZEN (ABOVE 80 YEARS)

Income Tax Slab (in Rs.) Up to Rs. 5 Lakh Rs. 5 Lakhs to Rs. 10 Lakhs Above Rs. 10 Lakhs

Tax No Tax 20% 30%

Dearer
 Two wheeler  Car-Suv  Imported luxury            

vehicle Gold Refrigerator A.C. Washing machine Watches Soaps Cosmetic Cigarette Tobacco Imported jewellery Platinum Imported digital still camera

•Branded apparel •Imported 20 inch LCD-LED TVs •LED bulbs •CFLs •Match box •Life saving & Probiotics medicines •Iodized Salt •Mobile phone •Branded silver jewellery •Foot wear-up to Rs 500/•Soya protein foods products

Cheaper

Transport: Roads and Civil Aviation
 Target of covering a length of 8,800 kilometer under NHDP next year  Allocation of the Road Transport and Highways Ministry enhanced 

 

by 14 per cent to `25,360 crores ECB proposed to be allowed for capital expenditure on the maintenance and operations of toll systems for roads and highways, if they are part of original project Direct import of Aviation Turbine Fuel permitted for Indian Carriers as actual users 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 Proposal to allow foreign airlines to participate up to 49 per cent in the equity of an air transport undertaking under active consideration of the government

TEXTILES
 Government has announced a financial package of 3,884 crores for weaver

of loans of handloom weavers and their cooperative societies
 Two more mega handloom clusters, one to cover Prakasam and Guntur

districts in Andhra Pradesh and another for Godda and neighboring districts in Jharkhand to be set up
 Three Weaver’s Service Centers one each in Mizoram, Nagaland and

Jharkhand to be set up for providing technical support to poor handloom weavers
 500 crores pilot scheme announced for promotion and application of Geo-

textiles in the North Eastern Region
 A power loom mega cluster to be set up in Ichalkaranji in Maharashtra with

a budget allocation of `70 crores

MICRO, SMALL AND MEDIUM ENTERPRISES
 5,000 crores India Opportunities Venture Fund to be set

up with SIDBI  To enable greater access to finance by Small and Medium Enterprises (SME), two SME exchanges launched in Mumbai recently  Policy requiring Ministries and CPSEs (Center for Public Safety Excellence ) to make a minimum of 20 per cent of their annual purchases from MSEs( Micro & Small Enterprise) approved. Of this, 4 per cent earmarked for procurement from MSEs owned by SC/ST entrepreneurs

AGRICULTURE
 Plan Outlay for Department of Agriculture and Co-operation increased by 18 per cent  Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to `9,217 crores 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 crores in 2012-13 from `400 crores in 2011-12 `300 crores to Vidarbha Intensified Irrigation Development Program under RKVY. Remaining activities to be merged into following missions in Twelfth Plan: National Food Security Mission National Mission on Sustainable Agriculture including Micro Irrigation National Mission on Oilseeds and Oil Palm National Mission on Agricultural Extension and Technology National Horticultural Mission Target for agricultural credit raised by `1,00,000 crores to `5,75,000 crores in 2012-13. Kisan Credit Card (KCC) Scheme to be modified to make KCC a smart card which could be used at ATMs

IRRIGATION
 Structural changes in Accelerated Irrigation Benefit

Programme (AIBP) being made to maximize flow of benefit from investments in irrigation projects  Allocation for AIBP in 2012-13 stepped up by 13 per cent to 14,242 crores  Irrigation and Water Resource Finance Company being operationalised to mobilize large resources to fund irrigation projects  A flood management project approved by Ganga Flood Control Commission at a cost of 439 crores for Kandi sub-division of Murshidabad District

SCHEDULED CASTES AND TRIBAL SUB PLANS
 Allocation for Scheduled Castes Sub Plan at `37,113

crores in BE 2012-13 represents an increase of 18 per cent over BE 2011-12
 Allocation for Tribal Sub Plan at `21,710 crores in BE

2012-13 represents an increase of 17.6 per cent

EDUCATION
 For 2012-13, 25,555 crores provided for RTE-SSA

representing an increase of 21.7 per cent over 2011-12  6,000 schools proposed to be set up at block level as model schools in Twelfth Plan  3,124 crores provided for Rashtriya Madhyamik Shiksha Abhiyan (RMSA) representing an increase of 29 per cent over BE 2011-12

SECURITY
 A provision of 1,93,407 crores made for Defence

services including `79,579 crores for capital expenditure. Any further requirement to be met  1,185 crores proposed to be allocated for construction of nearly 4,000 residential quarters for Central Armed Police Forces  3,280 crores proposed to be allocated for construction of office building of Central Armed Police Forces  Scheme to create National Population Register likely to be completed within next 2 years

GOVERNANCE
 UID - Aadhaar  Enrolment of 20 crores persons completed under UID mission. Adequate      

funds to be allocated to complete enrolment of another 40 crores persons Black Money Proposal to lay a White Paper on Black Money in current session of Parliament Public Procurement Legislation Bill regarding Public Procurement Legislation to be introduced in the Budget Session of the Parliament Legislative measures for strengthening anti-corruption framework are at various stages of enactment

CENTRAL PLAN OUTLAY(IN CRORES)
2010 Grand total Agriculture 2Civil Aviation Communication and IT Environment and Forest 464316 13825 6223 13708 2181 2011-12 2012-13 558172 12861 5621 15101 1902 651509 16121 7293 21394 2430

External Affairs
Health and Family welfare Home Affairs Human Resource Development Petroleum and Natural Gas Power Rural Development Science and Technology

800
20726 2542 43514 60967 42945 720261 4650

1125
24315 6152 51772 69883 62792 67139 5432

1500
30477 10500 61427 79728 62425 73175 5975

IMPACT ANALYSIS
 INDIA INC
PROPOSAL EFFECT

Excise duty and service tax raised to 12% from 10%
Investment in infrastructure to go up to 50 lakhs crores in 12th plan; half expected from private sector New sector to be added for purpose of investment linked deduction

Price need to be raised, margins may get affected
More opportunities for private sector to invest in PPP projects Incentives for investment

IMPACT ANALYSIS
 CAPITAL MARKET
PROPOSAL Reduction Of STT on delivery based sale and purchase of share from 0.125 to 0.1 % EFFECT Transaction costs will come down

Qualified foreign investors allowed to invest in corporate bond market

Deepening of corporate debt market

IPO of Rs 10 cr. And above will only be in Cost of issuing shares will come downs; electronic from opens doors for more retail investors From Tier 2/3 towns

IMPACT ANALYSIS
 TAXPAYER
PROPOSAL EFFECT

Individuals exemption limit to be raised Provides tax relief of Rs 2,000 to Rs 200,000 Allow deduction of up to Rs 10 lakhs for interest from saving accounts Upper limits of 20% to be raised to 10 lakh from 8 lakh Allow deduction of up to Rs 5000 for preventive health check up More benefit for senior citizens

Tax benefit of Rs20,000

Health awareness

IMPACT ANALYSIS
 ECONOMY
PROPOSED EFFECT

Rs 30,000 crores to be raised from disinvestment in 2012-13

Retail investors will get PSU shares

Provision regarding implementation of Minimize transfer pricing litigation Advance Pricing Agreement to be introduced Big boost to IT and BPO service in finance bill,2012 providers

Rs 15, cr. To be provided for capitalization of Banks will be better equipped to face public sector banks and financials competition institutions

Tax-free bonds of Rs 60,000 cr. For financing infrastructure projects in 2012-13

More long term financing instruments for infrastructure projects

CONCLUSION
• Demand will boost because of rural development and increase in exemption limit • Sales will increase as there is rise in the income of the consumer • As the Profit increase it will lead to increase in taxes • Government income will increase

 Thank You!