Budget Live: Zero reforms, minimal tax cuts, excise & service tax hikes
March, 16th 2012
Focusing on subsidy management and equity investment in his Budget speech, Finance Minister Pranab Mukherjee announced a slew of schemes to not only widen the social safety net, but also to ensure that the GDP grows at a faster rate while announcing incentives for individuals to put their money in the share market. Updates: Excise duty on large cars raised from 22 per cent to 24 per cent Most luxury items, eating out, air travel, leisure activities will cost more Service tax rates hiked from 10 per cent to 12 per cent
Service tax net drastically widened; to include most sectors Team to study common tax code for service tax and central excise to be set up.
Copyright relating to cinematography in film industry exempted from service tax.
All services except 17 in the negative list to be brought under service tax net.
Direct taxes proposals to result in net revenue loss of Rs 4,500 crore. Introduction of compulsory reporting of assets held abroad.
Securities Transaction Tax (STT) reduced from 0.125 per cent to 0.1 per cent.
Capital gains tax on residential property exempted if sale proceeds used for SMEs.
Tax exemption of up to Rs 5,000 for health insurance for annual preventive health checkup.
Withholding tax on power, airlines, road and brides, ports and shipyard, fertilisers, dams and affordable houses lowered to 5 pc from 20 pc for 3 years.
No change in corporate tax rate.
No tax on saving bank interest up to 10,000 for those having income up to Rs 5 lakh. Tax rate for income above 10 lakh to be 30 per cent Tax rate for income from 5 to 10 lakh to be 10 per cent Tax rate for income from 2 lakh to 5 lakh to be 10 per cent Individual tax payer exemption limit to be raised to Rs 200,000 from Rs 180,000. DTC rates introduced on personal income tax.
Revenue deficit for 2012-13 projected at Rs 1,85,752 crore.
Total debt of the Centre will be 45 per cent of GDP.
Determined to bring down fiscal deficit to 5.1 per cent of GDP next fiscal. Fiscal deficit at 5.9 per cent of GDP in revised estimates for 2011-12.
Direct tax collection fell short by Rs 32,000 crore in current fiscal.
Non-plan expenditure Rs 9,69,900 crore in 2012-13; 8.7 per cent higher than current year. Net tax receipts of the Centre in 2011-12 stands at Rs 7,71,071 crore.
Income tax and corporate tax collections have fallen 40 crore Aadhar enrollment in year beginning April 2012.
Rs 193,407 crore provision made for defence services in 2012-13.
White Paper on black money to be tabled in current session of Parliament. Information on blackmoney stashed abroad has started flowing in; prosecution to be executed in some cases. Rs 3,915 crore to be spent on National Rural Livelihood Mission.
Rs 1000 crore to be provided for National Skill Development Corporation in 2012-13.
Interest subvention of 7 pc to women self groups for loans up to Rs 3 lakh, additional 3 pc for those making timelyrepayment.
Rs 20,822 crore earmarked for National Rural Health Mission against Rs 18,115 crore this year. Rs 20,000 cr to be spent on rural infrastructure development, including Rs 5,000 cr for creating warehousing facilities.
National Backward Region Grant scheme outlay raised by 22 per cent to Rs 12,040 crore. Allocation for rural drinking water and sanitation scheme increased from Rs 11,000 cr in FY 12 to Rs 14,000 cr in 2012-13.
Rs 15,850 cr to be allocated to Integrated Child Development Scheme in 2012-13 as against Rs 10,000 cr this fiscal. Govt to create PDS through Adhaar platform by Dec to realise objectives of Food Security Bill. National Mission on Food Processing to be started in 2012-13. Government to provide Rs 10,000 crore to NABARD for refinancing regional rural banks.
Agriculture credit target to be raised by Rs 100,000 cr to Rs 5,75,000 cr Government to set up Rs 5000 crore venture fund for MSME sector. India will become self-sufficient in urea production in five years.
Proposal to allow foreign airlines to participate direct or indirectly in India being considered actively. External commercial borrowings to the extent of USD one billion to be allowed for aviation sector for next year. 8,800-km of highways to be developed under National Highway Development Project in 2012-13: FM. Govt to double tax free bonds for infrastructure financing to Rs 60,000 crore in next FY: Pranab.
Infrastructure investment in 12th Plan to go up to Rs 50 lakh crore; half of it to come from pvt sector: FM. Rs 15,888 cr to be provided for capitalisation of public sector and regional rural banks and NABARD.
Microfin institution regulation bill, natl housing bank regulation bill, reg bank regulation bill and public debt management bill this session.
IPO equity offer above Rs 10 crore will have to be made electronically in capital market reforms. Income Tax deduction of 50 per cent on investments of up to Rs 50,000 in savings scheme named after Rajiv Gandhi. Examining new ways of providing subsidies for LPG, kerosene Efforts to arrive at broadbased consensus with state governments on allowing FDI in multibrand retail up to 51 per cent, says FM.
Government to raise Rs 30,000 crore in 2012-13 from disinvestment of stake in PSUs. Direct Tax Code (DTC) Bill to be enacted at the earliest, says FM.
Pilot project for direct transfer of subsidiary for kerosene has been initiated in Alwar, Rajasthan. Food Security Act will be fully provided for and subsidy to be 2 per cent of GDP for next two years: FM. Govt to fully provide for food subsidy and food security act in 2012-13.
GDP to grow by 7.6 per cent in 2012-13; plus, minus 0.25 per cent.
Headline inflation to moderate further in next few months and remain stable thereafter. We have to expedite decisions to improve delivery systems to address problems of black money and corruption: Mukherjee. Have to accelerate the pace of reforms, says Pranab.
Economy is now turning around, manufacturing appears to be on revival, says FM. Amendments to FRBM Act part of the budget: FM.
Expect average inflation to be lower next year; expect current account deficit to be lower next yea: FM. Economy is now turning around, manufacturing appears to be on revival, says FM. GDP to grow by 6.9 per cent in 2011-12, says FM.
The Finance Minister began his budget speech, his seventh, in the Lok Sabha on Friday even as another political crisis threatened the survival of the Congress-led United Progressive Alliance (UPA) Government. Budget 2012-13 is being presented against the backdrop of slowing growth and burgeoning fiscal deficit even though the Economic Survey presented on Thursday claims that the Indian economy was finally beginning to show signs of registering a higher growth rate.
As soon as Mukherjee started his speech Opposition MPs started shouting slogans forcing Speaker Meira Kumar to intervene and ask the parliamentarians to maintain decorum.
Expecting inflation to moderate in a few months and then stabilise, the Finance Minister blamed European debt crisis and the slow economic recovery in the USA along with the 2011 earthquake and tsunami in Japan that led to another slowdown in the world economy for the poor GDP growth.
Hoping that the Indian economy was finally turning around and manufacturing growth appeared to be moving upwards, Mukherjee cautioned against rising crude oil prices, which he said could prove to be a roadblock to higher growth rate. Assuring the House that the government was committed to economic reforms, he said that the pace of reforms need to be accelerated to reap the maximum benefits.
"We have to expedite decisions to improve delivery systems to address problems of black money and corruption," said Mukherjee.
The Prime Minister's Office tweeted: "The Budget for 2012-13 has been formulated against the background of railways' responsibilities in meeting the demands of the 12th Plan."