SOP-G 8

PRESENTS
 OVERVIEW OF THE ECONOMY

Growth in different sectors:

i. Agricultural- 5.4%.
ii. Industrial - 8.1% .
iii. Services -9.6%.
Growth in imports by 17.6% ,export by 29.4 %.
Economic Growth expected to 9%.
Estimated GDP in 2011-2012 is 8.6%
Reduction of fiscal deficit from 5.5% to 5.1%
estimating 4.6% in 2011-12.
 HIGHLIGHTS OF THE BUDGET
Rajiv Gandhi National Institute Of Youth
Development ( T N ) has been allotted Rs 20cr.

Madras School of Economics has been allotted Rs

10cr.

Maulana Azad Education Fund- Rs 200cr.

Veterinary & Animal Science University- Rs 100cr.

IIT Kharagpur- Rs 200 cr.

 CONTD…
Centre For Development Economics & Ratan Tata
library of Delhi school of economics Rs 10 cr.

Aligarh Muslim University branches in West

Bengal & Kerala –Rs 50cr.

IIM Kolkata- Rs 20 cr.

Kolkata & Ahmadabad centers of Mahatma Gandhi

Antarrashtriya Hindi Vishwavidyalaya- Rs 10 cr.
 SUATAINING GROWTH
 FISCAL CONSOLIDATION

a) Centre & states have shown positive effect on macro

economic management of the economy.

b) Amendament to centre’s FRBM Act 2003 laying down

the fiscal road map for next 5 years.

c) Proposal to introduce the public debt management

agency of India Bill in the next financial year.
 CONTD….
TAX REFORMS

a) Direct tax code to be finalized for enactment

during 2011-12.

b) Area of divergence with states on proposed

Goods & Services Tax have been narrowed.
 ESTIMATES OF THE BUDGET
Planned expenditure increased 18.3% to Rs
4.41 lac cr

Non planned expenditure increased 10.9% to

8.16 lac cr.

Total expenditure 12.57 lac cr up by 13.4%.

 CONTD…
Total tax receipts estimated to 9.32 lakh cr,
while fiscal deficit estimated to be 4.6% of
GDP.

Net market borrowing expected to be 3.43

lakh cr.
 IMPORTANT FACTORS
 As per Mahatma Gandhi National Rural
Employment Guarantee Act. Rs 100 / day wage
rate had been notified by the ministry of rural
development on Jan 14,2011.

 In IT sector Software Technology Park In India

does not got any extension

Foreign Investors are allowed to invest in MFI.

Interest subvention of 1% on housing loans;

extending housing loan Rs. 25 lakh
 CONTD…
Direct transfer of cash subsidy to BPL.

Rs. 1,64,415 crore, including Rs. 69,199 crore for capital

expenditure was provided to Defense.

Rs. 1,000 crore. Was provided to Build judicial

infrastructure by three fold.

From 1st October, 2011,10 lac Aadhaar numbers will be

generated per day.
 Infrastructure
For infrastructure govt. decided to allocate a
fund over Rs 2,14000 Cr.

In this budget National Capacity Building

Program was Launched.

Railways, ports, housing and highway

developments plants were allotted Rs 30,000
Cr.
 EDUCATION
Allocation of Rs 52,057 cr (24 % over the
current year)

Allocation of Rs 21,000 cr

Introduced Scholarship scheme for SC and ST

NKN will link 1500 Institutes of Higher

Learning and Research
 Taxes
Minimum alternate tax (MAT) increased from
18 % to 18.5 % of book profits.

Central Excise Tax rate was same as at 10%.

Service tax retained at 10%.

Surcharge decreased to 5% from 7.5% for

domestic companies.
 Direct Taxes
General: Up to 1.8 lakh
Women: No change; 1.9 lakh
Senior Citizens – 2.5 lakh
Very Senior Citizens- 5 lakh
Reduced the age limit from 65 to 60 to be senior
citizens.
Estimated net revenue loss of Rs. 11,500 crore
DTC from April 1, 2012
 Indirect Taxes
Goods & Service Tax to be put introduced in the
parliament.

Nominal Central Excise Duty of 1 % imposed on

130 items.

10% levy on branded garments.

Indirect tax levies will bring in Rs 11,300 crore.

 AGRICULTURE
Removal of production and distribution
bottlenecks.

Allocation under RKVY increased from Rs. 6,755

crore to Rs. 7,860 crore.

Rs. 300 crore to bring 60,000 hectares under oil

palm plantations.

Rs. 300 crore for Accelerated Fodder

Development Program to benefit farmers in
 Contd..

Integrated Development of 60,000 pulses

villages in rain fed areas.

Credit flow for farmers raised from Rs.

3,75,000 crore to Rs. 4,75,000 crore.

Interest subvention from 2 to 3% for

providing short-term crop loans.
 Contd..
Capital base of NABARD to be strengthened by Rs.
3,000 crore.

Rs. 10,000 crore to be contributed to NABARD’s

Short-term Rural Credit fund.

To set up 15 more Mega Food Parks.

National Mission for Protein Supplement, Rs. 300 cr.

 MEDICAL
There was a increase of 20% in medical budget.

Hospital charges and medical bills to increase

by 5%.

Basic health coverage provided for Rashtriya

Swasthya Bima yojana.

Rs 267.6 billion was allocated for health sector.

 POSITIVES OF THE BUDGET
Surcharge for companies cut to 5 per cent, from
7.5 per cent.
Citizens over 80 years to have exemption limit
of Rs 5 lakh

Allocation to Sarva Shiksha Abhiyan increase by

40% to Rs 21,000 cr.

Allocation for education increased by 24% over

current year
 CONTD…
Allocation of Rs 2,14,000 cr for infrastructure in 2011-
12; an increase of 23.3 per cent over 2010-11.

Excise duty to be reduced from 10% to 5%.

Special incentives for hybrid vehicle makers if

manufacturing done in India.

Senior Citizen Age Limit reduced from 65 years to 60

years for Income Tax purposes
 CONTD…
Basic customs duty on agricultural
machinery reduced to 4.5% from 5%

Uday Kotak: MFs allowed to raise money from

foreign investors

No import duty on ship parts positive for

shipping corporation of India(SCI)

Tax exemption limit for senior citizens raised

 NEGATIVES OF THE
BUDGET
Rate of Minimum Alternative Tax proposed
to be increased from 18% to 18.5%

Lower rate of Central Excise Duty enhanced

from 4% to 5%

AC restaurants serving liquor to come under

service tax net

Health Check-Ups in Private hospitals to

 CONTD…
Travel, Healthcare to become expensive due to increased
service tax

Lack of FDI in retail was a disappointment

Air travel to cost more

Branded clothes may cost more

Rise in MAT to hurt RIL, GVK Power, telcos