Global News Post: General Budget 2011-12

This Budget Meets All the Challenges- Prime Minister

<div dir="ltr" style="text-align: left;" trbidi="on"> <div class="MsoNormal" style="line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: center;"> </div><div class="MsoNormal" style="line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: center;">Excerpts from PM’s post budget interview onDoordarshan:</div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div> </div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHB0Gt3YjYLksGwTp2um-9KB1Trj-WIJ1StRh8VrBFKLYJqItFP2nzFc-OJ0FvzcamUIzXqYr29l8ZT7pL7xo1BUtJtl2vp7QzptqolmNMQDV_1BhkrWhSlfmsq0iB5-1HWA9xV4jMEPJb/s1600/s2011022533905.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="220" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHB0Gt3YjYLksGwTp2um-9KB1Trj-WIJ1StRh8VrBFKLYJqItFP2nzFc-OJ0FvzcamUIzXqYr29l8ZT7pL7xo1BUtJtl2vp7QzptqolmNMQDV_1BhkrWhSlfmsq0iB5-1HWA9xV4jMEPJb/s320/s2011022533905.jpg" width="320" /></a></div> </div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;">Q.  Prime Minister, congratulations on your government's third budget.  I would like to begin by asking how this budget addresses current economic conditions specifically with regard to inflation and sustaining rapid growth?<o:p></o:p></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;">PM:   This budget meets all the challenges that our economy and our polity faces in the next fiscal year.  We need to sustain a high rate of growth and therefore this budget builds upon the good performance of the current fiscal year’s  8.6 % growth rate to a projected 9% growth rate for which adequate provisions have been made particularly in the area of infrastructure and in social sector plus agricultural development. It is certainly necessary to curb inflationary expectation for which it is very essential that there should a path of fiscal consolidation. The Finance Minister has done a commendable job by planning to reduce the fiscal deficit and revenue deficit before the figures he himself had projected in the budget estimates. And therefore, what he has done by way of social sector spending, what he has done by way of encouraging investment in agriculture, the tax concession that he has given, I think this is a budget which matches the challenges that our economy faces. Sustained growth,  equitablegrowth, inclusive growth plus a determined effort to curb inflationary expectations.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;">Q. The Finance Minister has not raised any additional taxes and yet tax revenue is up 25%. Is this achieved just because of rapid growth? And therefore can you continue to reduce the deficit by achieving rapid growth?<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:  Well rapid growth is certainly one factor. But I think equally important is greater tax compliance and for that moderate rate and simplified system also are very essential. And the Finance Minister has walked on both these legs.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q. The FM has announced some adjustments in IT rates at the bottom levels and specifically for senior citizens. But there were cries in the House about women for which there was no action it was said. And also for those further up in the income ladder who also have suffered inflation and there is no action for them. How do you react to that?<o:p></o:p></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:   Well you can’t please all people. And the Finance Minster has done as good a job as was possible. The fact that he has increased the exemption limit for the people at the lowest rung of the ladder from Rupees 1,60,000 to Rupees 1,80,000 will benefit all men and women and for older citizens he has done much more.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q.  The expectation was that there would be some kind of amnesty scheme to try and bring in black money to invest in infrastructure. That has not happened. Was it at all a factor that the government considered?<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:  Well, amnesty schemes have been implemented in the past. I don’t think they have succeeded in providing a permanent cure for black money. We need to have a system's reform in a holistic manner to deal with this menace.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q. The stock market was fairly optimistic through the last couple of hours. In fact even before the speech began and then it kept climbing. Yet there is nothing really for investors in the budget. How do you read this from the perspective of the capitalmarket.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:  Well, The Finance Minister has done quite a lot to encourage foreign direct investment and foreign portfolio investment. He has reduced the surcharge from 7.5% to 5%. I think, the signals are that this is a government which is reform-oriented. He has promised that he will come with legislation with regard to insurance, with regard to pension fund. In totality, if these promises are converted into solid Acts of Parliament, they will provide a boost to the capital market as well as to the corporate sentiment all around.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q.  There is some frustration that the same promises made from one year to the next. Whether it is the great tax code, the Goods and Services Tax or some of the Bills on the debt management that from year to year the same issues are still  inprocess and they are not actually completed.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:   As far as Direct Taxes code is concerned, that is very much on the cards. It will, I think, become a reality around 1stApril 2012. Now as far as the others, I think much depends on what we can push through Parliament. There is no lack of effort on the part of the government, and I am confident that although there are some difficulties with regard to the Goods and Services Tax- some states are not on board- but I am confident that we will persevere and  ultimately  succeed.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;">Q. One area of concern has been that interest rates have been climbing. Now in this budget, if I understand the numbers correctly, the government’s borrowing programme will not increase next year in relation to this year. So if the government’s borrowing programme is static, then would you expect interest rates to moderate?<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:   That is certainly one factor. Because the government cannot be a claimant on the nation’s savings pool.  So that will at the margin help. But there are many other factors, for example what happens to inflation. That also has to be taken into account.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q.  There was an expectation that the Finance Minister would raise the excise and service taxes from 10% back to 12% level that prevailed before the recession. And he has not done that. If he had done that, the deficit would have come down more. So what were the calculations that went into keeping the taxes unchanged?<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:  Moderation in taxation on balance is a good thing to play with. And if you are moving towards a GST, I think it is also necessary to have that end product in mind. And I think the Finance Minister thought it through both customs and excise duties peak rates have been kept at 10%. I think that’s the right way to go about because we cannot be too certain that everything will work, the arithmetic will work the way we want it to work. We must have ample scope to contribute to fiscal consolidation.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q.   I have just two questions. One is on the social sector spending programmes- where it seems that a lot of the money does not actually manage to get spent. So is there a spending capacity issue for the government?<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:  Well there is obviously. These programmes require a boost in terms of great delivery services. So there is a problem which has to be faced head on.<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> Q.   And the last question- was this an easy budget. Does rapid economic growth help create easy budgeting? Because you do not have to take tough decisions and numbers start falling into place, and so that is the most important thing that India needs to achieve?<o:p></o:p></div><div class="MsoNormal" style="font-weight: 500; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: justify;"> PM:   If we can achieve such high rates of growth, to that extent the fiscal problem will be lot more manageable. But considering international climate, considering what was happening in the international financial system, maintaining a high growth rate is something for which the FM and the government deserve to be congratulated.</div></div>

This Budget Meets All the Challenges- Prime Minister

Excerpts from PM’s post budget interview on Doordarshan : Q. Prime Minister, congratulations on your government's third budget. I wou...

Highlights of Indian Union Budget 2011-12

<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmbTDxtRMclXY0skY6YYe5seV2fkjQ-rV3fOJTOgVSGyD4zICdjxSDCqVUH_et7x4I6br-KHG00StWIwjQ5R6-jtfKi_uQ9ibvljT4iSaoPJw1vcGz-8M5c0UnPIyMQGnf4Rd92PndxAKh/s1600/l2011022833934.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="138" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmbTDxtRMclXY0skY6YYe5seV2fkjQ-rV3fOJTOgVSGyD4zICdjxSDCqVUH_et7x4I6br-KHG00StWIwjQ5R6-jtfKi_uQ9ibvljT4iSaoPJw1vcGz-8M5c0UnPIyMQGnf4Rd92PndxAKh/s320/l2011022833934.jpg" width="320" /></a></div><div style="text-align: center;">The Finance Secretary, Ms. Sushama Nath addressing the Post Budget Press Conference, in New Delhi on February 28, 2011. The Chief Economic Advisor, Dr. Kaushik Basu and the Principal Director General (M&C), Press Information Bureau, Smt. Neelam Kapur are also seen.</div><div class="MsoListParagraphCxSpFirst" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">  Critical institutional reforms set pace for double-digit growth<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Scaled up flow of resources infuses dynamism in rural economy<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         GDP estimated to have grown at 8.6% in 2010-11<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Exports grown by 9.6%, imports by 17.6% in April-January 2010-11 over corresponding period last year<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Indian economy expected to grow at 9%  in 2011-12.<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Five-fold strategy to deal with black money.   Group of Ministers to suggest ways for tackling corruption<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·          Public Debt Management Agency of India Bill to come up next financial year<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Direct Tax Code (DTC) to be effective from April 01, 2012<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Phased move towards direct transfer cash subsidy to BPL people for better delivery of kerosene, LPG and fertilizer mooted<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.40,000 crore to be raised through disinvestment in 2011-12<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         FDI policy to be liberalized further<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirement<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         FII limit for investment in corporate bonds in infrastructure sector raised<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Additional banking license to private sector players proposed<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.6000 crore to be provided in 2011-12 for maintaining minimum Tier I Capital to Risk Weighted Asset Ratio (CRAR) of 8% in public sector banks<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.500 crore to be provided to regional rural banks to maintain 9% CRAR<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         India Microfinance Equity Fund of Rs.100 crore to be created by SIDBI<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs. 500 crore Women SHG Development Fund to be created<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Micro Small and Medium Enterprises  MSME gets boost as Rs. 5000 crore provided to SIDBI  and Rs.3000 crore to NABARD<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Existing housing loan limit enhanced to Rs.25 lakh for dwelling units<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Provision under Rural housing Fund enhanced to Rs.3000 crore<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Allocation under Rashtirya Krishi Vikas yojna (RKVY) increased to Rs.7860 crore<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Allocation of Rs.300 crore to promote 60000 pulses villages in rainfed areas<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs. 300 crore vegetable initiative to achieve competitive prices<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.300 crore to promote higher production of nutri-cereals<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.300 crore to promote animal based protein<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.300 crore Accelerated Fodder Development Programme to benefit farmers in 25000 villages<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Credit flow to farmers raised from Rs.3,75,000 crore to Rs.4,75,000 crore<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.10,000 crore for NABARD’s Short Term Rural Credit Fund for 2011-12<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         15 more mega food parks during 2011-12<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         National food security bill to be introduced this year<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Capital investment in storage capacity to be eligible for viability gap funding<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·          23.3% increase in allocation for infrastructure<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Tax-free bonds of Rs.30,000 crore proposed by government undertakings<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Environmental concerns relating to infrastructure projects to  be considered  by Group of Ministers<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         National Mission for Hybrid and Electric Vehicles to be launched<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         7 Mega clusters for leather products to be set up<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Allocation for social sector increased by 17% amounting to 36.4% of total plan allocation<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Bharat Nirman allocation increased by Rs.10,000 crore<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rural broadband connectivity to all 2.5 lakh panchayats in three years.<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Bill to amend Indian Stamp Act to introduce.   Rs.300 crore scheme for modernization stamp and registration administration<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Significant increase in remuneration of Angawadi workers  and helpers<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Allocation for education increased by24%.  Rs.21,000 crore allocated for Sarv Shikshya Abhiyan registering an increase of 40%<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         1500 institute of higher learning to be  connected by March 2012 with Knowledge Knowledge Network.<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         National Innovation Council set up.   Additional Rs.500 crore for National Skill Development Fund<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Plan allocation for health stepped up by20%<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Indira Gandhi National Old Age Pension Scheme liberalized further<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.200 crore for Green India Mission<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.200 crore for cleaning of rivers<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Rs.8000 crore provided for development needs of J&K<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         10 lakhs Aadhaar(UID)  numbers to be generated everyday from 1st October<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Fiscal deficit kept at 4.6% of GDP for 2011-12<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Income Tax exemption limit for general category in individual tax payers enhanced from Rs.1,60,000 to Rs.1,80,000<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Qualifying age for senior citizens lowered to 60; senior citizen above 80 year to get Rs.5,00,000 IT exemption<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="line-height: 17px; margin-bottom: 0.0001pt; margin-left: 36pt; margin-right: 0cm; margin-top: 0cm; text-indent: -18pt;">·         Surcharge on corporate lowered to 5%</div></div>

Highlights of Indian Union Budget 2011-12

The Finance Secretary, Ms. Sushama Nath addressing the Post Budget Press Conference, in New Delhi on February 28, 2011. The Chief Economic A...

The Union Finance Minister Presents the General Budget 2011-12

<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: center;"> </div><div style="text-align: center;"><div class="separator" style="clear: both; text-align: center;"></div> </div><div style="text-align: center;"> </div><div style="text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9LQPR-XOC5sBu0rjIRHtInivuJPKJiEn2beM7R0I-XSPNhOEIIH_RUdsn9fmd4JLHoSmQNTPWnqeFyuJDez2q1UID828gad6T-vHz1RDr_HFxxqQNbfk5LYH0MOjcT6i-bzFgu5ez6wGl/s1600/fminpresenting+budget.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9LQPR-XOC5sBu0rjIRHtInivuJPKJiEn2beM7R0I-XSPNhOEIIH_RUdsn9fmd4JLHoSmQNTPWnqeFyuJDez2q1UID828gad6T-vHz1RDr_HFxxqQNbfk5LYH0MOjcT6i-bzFgu5ez6wGl/s320/fminpresenting+budget.jpg" width="320" /></a></div> </div><div style="text-align: center;"> </div><div style="text-align: center;"> </div><div style="text-align: center;">The Union Finance Minister, Shri Pranab Mukherjee arrives Parliament House to present the General Budget 2011-12, in New Delhi on February 28, 2011. The Ministers of State of Finance, Shri S.S. Palanimanickam and Shri Namo Narain Meena are also seen.</div></div>

The Union Finance Minister Presents the General Budget 2011-12

The Union Finance Minister, Shri Pranab Mukherjee arrives Parliament House to present the General Budget 2011-12, in New Delhi on February 2...

Special Grants to Universities and Academic Institutions

<div dir="ltr" style="text-align: left;" trbidi="on"> <div class="MsoNormal" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: 36pt;">The Union Finance Minister Shri Pranab Mukherjee has proposed special grants to recognize excellence in universities and academic institutions in the Union Budget 2011-12.  The following institutions / universities  will be given special grants during the course of 2011-12 :<o:p></o:p></div><div class="MsoNormal" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: 36pt;"> </div><div class="MsoListParagraphCxSpFirst" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                        i.            Rs. 50 crore each to upcoming centres of Aligarh Muslim University at Murshidabad in West Bengal and Malappuram in Kerala;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                      ii.            Rs. 100 crore as one-time grant to the Kerala Veterinary and Animal Sciences University at Pookode, Kerala;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                    iii.            Rs. 10 crore each for setting up Kolkata and Allahabad Centres of Mahatma Gandhi Antarrashtriya Hindi Vishwavidyalaya, Wardha;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                    iv.            Rs. 200 crore as one time grant to IIT, Kharagpur;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                      v.            Rs. 20 crore for Rajiv Gandhi National Institute of Youth Development, Sriperumbudur, Tamil Nadu;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                    vi.            Rs.20 crore for IIM, Kolkata, to set up its Financial Research and Trading Laboratory;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                  vii.            Rs. 200 crore for Maulana Azad Education Foundation;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                viii.            Rs. 10 crore for Centre for Development Economics and Ratan Tata Library, Delhi School of Economics, Delhi; and<o:p></o:p></div><div class="MsoListParagraphCxSpLast" style="font-size: 11pt; line-height: normal; margin-bottom: 0.0001pt; margin-left: 108.3pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -108.3pt;">                                                    ix.            Rs. 10 crore for Madras School of Economics.</div></div>

Special Grants to Universities and Academic Institutions

The Union Finance Minister Shri Pranab Mukherjee has proposed special grants to recognize excellence in universities and academic institutio...

New Service Tax Structure a Step Closure Towards Proposed GST

<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: center;">Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured</div><div style="text-align: center;"> </div><div style="text-align: center;"> </div><div style="text-align: center;"></div><div class="MsoNormal" style="font-size: 11pt; line-height: 17px; margin-bottom: 10pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">Hotel accommodation, in excess of declared tariff of Rs. 1000 per day and service provided by air conditioned restaurants that have license to serve liquor are the new services whichhave been brought under the service tax net.  While proposing to levy service tax on these services, the Union Finance Minister, Shri Pranab Mukherjee has said that the hotel accommodation with declared tariff of over Rs. 1000 per day will have to pay the service tax with an abatement of 50 per cent.  This will mean an effective burden of only 5 per cent of the amount charged. Air conditioned restaurants with license to serve liquor will now be paying service tax with an abatement of 70 per cent.  The effective burden will be 3 per cent of the bill only in this case. <o:p></o:p></div><div class="MsoNormal" style="font-size: 11pt; line-height: 17px; margin-bottom: 10pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            Shri Mukherjee has also proposed various measures to achieve a closure fit between the present service tax regime and its GST (service and goods tax) successor.  These measures would include:<o:p></o:p></div><div class="MsoListParagraphCxSpFirst" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;">·         Bringing in a few new services into the tax net to expand the tax base while ensuring that the impact is predominantly on sections of society that have the ability to pay;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;">·         Suitably expanding or rationalizing the scope of existing service categories;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;">·         Rationalizing certain provisions relating to import of services and valuation;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;">·         Modifying provisions of the Cenvat Credit scheme to achieve a more realistic balance between input credits and output tax and harmonizing the provisions of the scheme across goods and services;<o:p></o:p></div><div class="MsoListParagraphCxSpMiddle" style="font-size: 11pt; line-height: 17px; margin-bottom: 0.0001pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;">·         Rationalizing penal provisions to reinforce the message that honest taxpayers would be facilitated and deviants would be dealt with severely; and<o:p></o:p></div><div class="MsoListParagraphCxSpLast" style="font-size: 11pt; line-height: 17px; margin-bottom: 10pt; margin-left: 38.7pt; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: -18pt;">·          Adoption of Point of Taxation rules for services which would shift the basis for tax collection from “cash” towards “accrual” basis as with Central Excise duty. </div></div>

New Service Tax Structure a Step Closure Towards Proposed GST

Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured Hotel accommodation, in excess of declared tariff of Rs. 1000 pe...

Service Tax Provisions to be Rationalised

Service Tax Provisions to be Rationalised

Rs. 4000 Crore Net Revenue Gain Through Service Tax Envisaged in 2011-12 Union Budget 2011-12 estimates to make net revenue gain of Rs. 4000...

Union Budget Proposes Creation of Women’s SHG’s Development Fund and Indian Microfinance Equity Fund

<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: center;">Focus on Regional Rural Banks and Micro Finance Institutions as Means of Financial Inclusion </div><div style="text-align: center;"> </div><div style="text-align: center;"> </div><div style="text-align: center;"> </div><div style="text-align: center;"></div><div style="text-align: justify;">Shri Pranab Mukherjee, the Union Finance Minister has said that the Regional Rural Banks will be strengthened to enable them to maintain a Capital to Risk Weighted Asset Ratio (CRAR) of at least 9 per cent as on March 31, 2012. The Government will provide Rs. 500 crore to these banks during 2011-12, which received Rs. 350 crore during the current year for this purpose. </div><div style="text-align: justify;"> </div><div style="font-weight: bold; text-align: justify;">The Government would provide a sum of Rs. 6000 crore during 2011-12 to enable public sector banks to maintain a minimum Tier I CRAR at 8 per cent. The Government has already been providing a sum of Rs. 20,157 crore for infusion in the public sector banks to maintain Tier I CRAR at 8 per cent and increase Government equity in some banks to 58 per cent. </div><div style="text-align: justify;"> </div><div style="font-style: normal; font-weight: normal; text-align: justify;">Considering Micro Finance Institutions (MFIs) as an important means of financial inclusion, the Finance Minister has proposed to create in the course of the year, “India Microfinance Equity Fund” of Rs. 100 crore with Small Industrial Development Bank of India (SIDBI). Shri Mukherjee emphasized that the creation of a dedicated fund for providing equity to smaller MFIs would help them maintain growth and achieve scale and efficiency in operations. The Committee set up by Reserve Bank of India (RBI) to look into issues relating to micro finance sector in India has submitted its report. The Government is now considering putting in place a framework to protect the interests of small borrowers. </div><div style="text-align: justify;"> </div><div style="text-align: justify;">Union Budget 2011-12 also proposes to set up a “Women’s SHG’s Development Fund” with a corpus of Rs. 500 crore to empower women and promote their Self Help Groups (SHGs). </div></div>

Union Budget Proposes Creation of Women’s SHG’s Development Fund and Indian Microfinance Equity Fund

Focus on Regional Rural Banks and Micro Finance Institutions as Means of Financial Inclusion Shri Pranab Mukherjee, the Union Finance Minis...

Union Budget 2011-12 Summary

<div dir="ltr" style="text-align: left;" trbidi="on"> <div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">ALLOCATION FOR SOCIAL SECTOR INCREASED BY 17% TO RS. 1,60,887 CRORE.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">ALLOCATION FOR BHARAT NIRMAN PROGRAMME INCREASED BY      RS. 10,000 CRORE.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">PLAN ALLOCATION FOR EDUCATION HIKED BY 24% AND HEALTH BY 20%.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">ELIGIBILITY FOR OLD AGE PENSION SCHEME REDUCED FROM 65YEARS TO 60.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">ALLOCATION FOR INFRASTRUCTURE INCREASED BY 23.3% TO             RS. 2,14,000 CRORE.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">CREDIT TO FARMERS TO BE INCREASED TO RS. 4,75,000 CRORE.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">FISCAL DEFICIT PEGGED AT 4.6% OF GDP.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">GOVERNMENT TO BORROW RS. 3.43 LAKH CRORE FROM THE MARKET.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">EXTENSION OF NUTRIENT BASED SUBSIDY TO COVER UREA UNDER ACTIVE CONSIDERATION.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">EXEMPTION LIMIT FOR INCOME TAX RAISED BY Rs. 20,000 TO RS. 1,80,000<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">MINIMUM ALTERNATE TAX INCREASED FROM 18 TO 18.5%.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">ONE PERPCENT CENTRAL EXCISE DUTY IMPOSED ON 130 ITEMS.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">LOWER RATE OF EXCISE DUTY RAISED FROM 4 TO 5%.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">SERVICE TAX HIKED ON DOMESTIC AND INTERNATIONAL AIR TRAVEL.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;">DIRECT TAXES CODE TO BE EFFECTIVE FROM APRIL 2012 AND IMPLEMENTION OF GST IS ON COURSE.</div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">The Union Budget 2011-12 aims to sustain economic growth, strengthen infrastructure, moderate the price rise, particularly of agricultural produce and reduce social imbalances through inclusive development. Presenting the budget 2011-12 in the Lok Sabha today, the Finance Minister Shri Pranab Mukherjee said that the budget is a transition towards a more transparent and result oriented economic management system in India.  He said while developments on India’s external sector have been encouraging, continued high food prices have remained our principal concern.  He said that the trend revealed shortcomings in distribution and marketing system. The Finance Minister said that huge differences between wholesale and retail prices are at the expense of remunerative prices for the farmers and competitive prices for  consumers.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            For sustaining growth tax reform will continue with the Direct Taxes Code (DTC) to be operationalised from April, 2012 while a Constitution Amendment Bill is proposed to be introduced during the current session of Parliament as a step towards roll out of the Goods and Services Tax (GST).  He said the introduction of DTC and GST will result in moderation of rates, simplification of laws and better compliance.  The Finance Minister re-iterated the Government’s resolve to move towards direct transfer of cash subsidy to people living below poverty line in a phased manner.  He said that the Nutrient Based Subsidy (NBS) has improved the availability of fertilizers and the Government is actively considering extension of NBS regime to cover urea. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            Finance Minister announced a number of measures to strengthen the agricultural sector particularly in the areas of pulses, vegetables and oil palm .  He announced Rs. 300 croreexpenditure to promote 60,000 pulses villages in rain fed areas for increasing crop productivity and strengthening market linkages.  He also proposed to spend Rs. 300 crore to promote oil palm plantation in 60,000 hectares and Rs. 300 crore for the initiative on vegetable cluster.   Rs. 400 crore is proposed to be spent to improve  rice based cropping system in the Eastern Region.  Capital investment in fertilizer production is proposed to be included as an infrastructure sub-sector since investment in the sector is capital intensive. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            The allocation for social sector has been increased by 17% to Rs. 1,60,887 crore which amounts to 36.4% of the total plan allocation.  Bharat Nirman, which includes PradhanMantri Gram Sadak Yojana (PMGSY), accelerated irrigation benefit programme, Rajiv Gandhi Grameen Vidyutikaran Yojana, Indira Awas Yojana, National Rural Drinking WaterProgramme and Rural Telephony have together been allocated Rs. 58,000 crore.  Remuneration for Anganwadi workers have been increased to Rs. 3000 per month from Rs. 1500 per month while the Anganwadi helpers will get Rs. 1500 per month.  This will be effective from 1st April 2011 benefiting about 22 lakh Anganwadi workers and helpers. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: 36pt;">The allocation on education has been increased by 24% to Rs. 52,057 crore.  Sarva Shiksha Abhiyan gets Rs. 21,000 crore which is 40% higher than the previous year’s allocation of Rs. 15,000 crore.  The Finance Minister also proposed to introduce a scholarship scheme for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in classes IX and X.  It would benefit about 40 lakh students.  Plan allocation for Health has also been increased by 20 per cent to Rs. 26,760 crores.  The Rashtriya Swasthaya Bima Yojana will be extended to the unorganized sector workers in hazardous mining and associated industries. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            Underlining the need to strengthen Public Sector Banks (PSBs) the Finance Minister proposed to provide Rs. 6000 crore to maintain tier 1 capital to risk weighted  asset ratio.  He also proposed to infuse Rs. 500 crore into Regional Rural Banks (RRB) .  A Women’s Self Help Groups Development Fund with a corpus of Rs. 500  crore is proposed to be created.  He also proposed to create a micro finance equity fund of Rs. 100 crore with Small Industrial Development Bank of India (SIDBI) for providing equity to smaller micro finance institutions.  Rs. 3000 crore will be provided to NABARD to help handloom weaver cooperative societies to become financially viable. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">               Interest subvention of 1 per cent on housing loans will now be available for loans upto Rs. 15 lakh where the cost of house does not exceed Rs. 25 lakh.  The present limit for the loan amount is Rs. 10 lakh while the cost of the house should not exceed Rs. 20 lakh. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            The total plan expenditure has been increased by 18.3 per cent to Rs. 4,41,547 crore and the non-plan expenditure increases by 10.9 per cent to Rs. 8,16,182 crore.  The gross tax receipts are estimated to grow by 24.9 per cent to Rs. 9,32,440.  Rs. 2,01,733 crore will be transferred to the Sates and UTs as plan and non plan transfers.  This also marks a rise of 23 per cent over budget estimates of last year.  The fiscal deficit is estimated at Rs. 4,12,817 crore which works out to 4.6 per cent of the GDP. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            Turning to the direct taxes, the Finance Minister proposed to increase the exemption limit for general category individual tax payers by Rs. 20,000 to Rs. 1,80,000 per year.  This will provide a uniform tax relief of Rs. 2000 to every tax payer of this category.  The benefit for senior citizens will now be available at 60 years of age and the exemption limit will go up from Rs. 2,40,000 to Rs. 2,50,000.  Those who are 80 years and above have been brought under a new category called very senior citizens and the exemption limit in this category will be Rs. 5lakhs.   <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            The minimum alternate tax rate has been hiked from 18 per cent to 18.5 per cent of book profits.  Developers of Special Economic Zones as well as units operating MAT in SEZs have been brought under MAT.  Tax benefit for investment in long term infrastructural bonds will continue for one more year.  Income from foreign subsidiaries of Indian Company will now attract a lower tax of 15 per cent tax on dividends. <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">           <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: center;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify; text-indent: 36pt;">Turning to indirect tax, the finance Minister said that there are 370 items that enjoy the exemption from Central Excise Duty but are chargeable to VAT.  He proposed to withdraw the exemption on 130 of these items.  The remaining 240 items would be brought into the tax net when GST is introduced.  A nominal 1 per cent central excise duty is being imposed on 130 items.  The basic customs duty has been reduced from 30 to 5 per cent on raw silk, from 5 to 2.5 per cent on certain textile intermediates and from 7.5 per cent to 5 per cent on certain inputs for manufacture of technical fibre and yarn.  Stainless steel scrap has been fully exempted from customs.  Export duty on iron ore has been increased to 20 per cent ad valorem both for lumps and fines.  The basic customs duty on pet coke and gypsum has been reduced 2.5 per cent to give relief to cement industry.   <o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            On the service tax front a few new services have been brought under tax net.  Hotel accommodation in excess of Rs. 1000 per day and service provided by air conditioned restaurants with licence to serve liquor have been brought under the tax net.  Service tax on air travel has been raised by Rs. 50 in case of domestic air travel and Rs. 250 on international journey by economy class. Services provided by Life Insurance Company in the area of investment and some more legal services have also been brought under tax net.<o:p></o:p></div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div><div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;">            Finance Minister said the proposals on direct taxes are estimated to result in a revenue loss of Rs. 11,500 crore while those on the service tax will yield Rs. 4000 crore more.  The Finance Minister has kept the disinvestment target at Rs. 40,000 crore for the coming year.  He, however, reiterated that the Government is committed to retain at least 51 percent ownership and management control of the CPSUs.   He said that as an emerging economy India stands at the threshold at the decade which presents immense possibilities. He said we have the voice on the global stage and we must not let the recent trends and tensions hold us back from converting these possibilities into realities.</div> <div class="MsoNoSpacing" style="margin-bottom: 0.0001pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; text-align: justify;"> </div></div>

Union Budget 2011-12 Summary

ALLOCATION FOR SOCIAL SECTOR INCREASED BY 17% TO RS. 1 ,60,887 CRORE. ALLOCATION FOR BHARAT NIRMAN PROGRAMME INCREASED BY RS. 10,00...