New Delhi: Today’s Budget is one of the Biggest Challanges of FM Pranab Mukherjee’s long political career and the Finance Minister set the tone for it when he described the year gone by as a “year of recovery interrupted”. He began with listings grim ground relities- the Global Economic scenerio, the battle with double digit inflation and said it was time for tough decisions. Here are the highlights of this fiscal’s financial budget.
Income Tax exemption limit raised to 2 Lacs to Provide relief of Rs. 2000 for all assesses: 20 percent tax on income over Rs. 10 Lacs, up from Rs. 8 Lacs.
Deduction of upto Rs. 10,000 from interest from Savings bank accounts.
Defence to get Rs. 1.93 Lacs crore during 2012-13
Service Tax rates hikes from 10 percent to 12 percent to bring in Rs. 18660 Crores.
Number of proactive steps taken on black money (stashed away abroad); information has started flowing in, prosecution to be initiated; White paper in current session.
No change in corporate taxes but measures to enable them better access funds.
Withholding tax on external commercial borrowings reduced from 20 percent to five percent for power, airlines, roads, bridges, affordable houses and fertilizers sectors.
National Skill Development fund allocated to Rs. 1000 Crores.
Four Thousand residential quarters to be constructed for paramilitary forces with an allocation of Rs. 1185 Crores.
National Population Register to be completed in Two Years.
Excise duty raised from 10 to 12 percent.
Cinema industry exempted from Service Tax.
Branded silver jewellery fully exempt from excise duty.
Customs duty on warning systems/track upgrade equipment for railways reduced from 10 percent to 7.5 percent.
Import Duty on equipment for iron ore mining reduced from 7.5 to 2.5 percent.
Allocation of Rs. 200 Crores for research on climate change.
Irrigation and water resources company to be operationalised.
National Mission on food processing to be started in cooperation with state governments.
Integrated Child Development Scheme to be strengthened and restructured with allocation of Rs. 15850 Crore.
Allocation of Rs. 14000 crore for rural water supply and sanitation.
Infusion of Rs. 15888 crore in public sector banks, regional rural banks and NABARD in 2012-13.
Infrastructure will require Rs. 50 Lac Crore in 12th Plan, half of this from the private sector.
Completion of highway projects 44 percent higher than in previous fiscal.
External commercial borrowings of upto $ 1 billion permitted for airline sector.
External commercial borrowings permitted to low cost housing sector.
From 2012-13, full subsidies for providing food secutiry, in other sectors to the extent the economy can bear this.
Hope to raise Rs. 30000 Crore from disinvestments.
New Equity Saving schemes to provide for income tax deduction of 50 percent for those who invest Rs. 50000 in equity and whose annual income is less than Rs. 10 Lac.
Corporate Market reforms to be initiated.
Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13.
Addressing malnutrition, black money and corruption in public life among five priorities in year ahead.
India’s inflation structural, driven largely by agricultural constraints.
Current account deficit 3.6 percent in 2011-12, this put pressure on exchange rate.
Growth in 2012-13 estimated at 7.6 percent, expect inflation to be power.
Better Monitoring of expenditure on government schemes.
Fiscal 2011-12 year of recovery interrupted; reality turned out to be different.
GDP growth in 2011-12 estimated at 6.9 percent had to battle double digit inflation for two years.
Good News: agriculture and services continued to perform well. economy is now turning around, recovery in core sectors.
Now at juncture where it is necessary to take hard decisions; have to accelerate pace of reforms.
LPG Gas, Petrol & Diesels cars may expensive in this budget (2012-13).