March 16th, 2012
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Finance Minister tables Finance bill ; budget highlights

budget-2012New Delhi: Finance Minister Pranab Mukherjee has begun his Union Budget speech in Parliament. 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. This is his seventh budget.

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. Mr Mukherjee cautioned against rising crude oil prices, which he said could prove to be a roadblock to higher growth rate. He said that the pace of reforms needs to be accelerated to reap the maximum benefits.

Highlights of the Budget

  • Focus to tackle malnutrition in 200 high risk districts with coordinated efforts on delivery systems
  • GDP is likely to be 3.6 per cent
  • 7.6 per cent India GDP growth in 2012-13 is expected
  • Direct fertilizer subsidy to benefit 9 crore farmers
  • Restrict expenditure on central subsides to under 2% of GDP in FY 2013 to improve quality of public spending
  • Subsidy for food security will be fully provided for
  • Pilot projects for direct transfers of subsidy are on and Aadhar-enabled payments in 50 selected districts within 6 months
  • Better, leakage-proof delivery of subsidies to be implemented
  • Better tracking on utilisation of Central funds needed
  • Expedite decisions to improve delivery systems to address problems of black money and corruption
  • Use of PAN for payment of direct and indirect tax have been accepted
  • Pilot project for direct transfer of subsidiary for kerosene has been initiated in Alwar, Rajasthan
  • Direct Tax Code (DTC) Bill to be enacted at the earliest
  • Efforts on for consensus with states on FDI in multi-brand retail up to 51 per cent
  • New IT relief for retail investors upto investment of Rs. 50,000
  • Retail investors should invest directly in equity
  • Opening the bond market for direct foreign investors
  • New scheme to encourage savings: Rajiv Gandhi equity scheme with IT deduction of 50% and a limit of Rs 50,000 rupees. Lock in period of 3 yrs.
  • Reforms in capital market: Simplifying IPOs, reach small investors in small towns
  • IPO equity offer above Rs 10 crore will have to be made electronically in capital market reforms
  • Rs 15,888 cr to be provided for capitalisation of public sector and regional rural banks and NABARD
  • Direct import of air traffic fuel
  • Proposal to allow foreign airlines to participate direct or indirectly in India being considered actively
  • Infrastructure investment in 12th Plan to go up to Rs 50 lakh crore; half of it to come from pvt sector
  • Tax free bond limit enhanced to Rs 60,000 to benefit individual taxpayers
  • Swabhimaan campaign in eastern States
  • ECB for low cost housing projects
  • Target for agriculture credit increased to Rs 5,75,000 crore
  • 8,800-km of highways to be developed under National Highway Development Project in 2012-13
  • A venture is to be set up with tie-up with SIDBI
  • Micro-education is being taken up by the Government
  • Allocation for mid-day meals at schools: Rs11,937 crore
  • Allocation for rural drinking water, sanitation: Rs14,000 crore
  • Agriculture to get 18 pc rise in outlay during year to Rs. 20,208 crore
  • India will become self-sufficient in urea production in five years
  • Irrigation, dams will be eligible for special fund
  • 1% interest subvention on home loans up to Rs 15 lakh
  • Computerization of PDS for effective implementation of food security bill; operational by Dec 2012
  • Rs 20,000 cr to be spent on rural infrastructure development, including Rs 5,000 cr for creating warehousing facilities.
  • Additional 3% interest subvention to farmers for promptly repaying their dues
  • Debt waiver package of Rs 3884 cr for weavers announced
  • Increase in MNREGA productivity
  • NRHM allocation hiked to Rs. 20,820 crores
  • National Backward Region Grant scheme outlay raised by 22% to Rs. 12,040 crore
  • Rs 193,407 crore provision made for defence services in 2012-13
  • Rs. 20,822 crore earmarked for National Rural Health Mission against Rs. 18,115 crore this year
  • Interest subvention of 7% to women self help groups for loans up to Rs. 3 lakh, additional 3% for those making timely repayment
  • Rs 1000 crore to be provided for National Skill Development Corporation in 2012—13
  • 6,000 new schools to be set up
  • 40 crore Aadhar enrollment in year beginning April 2012
  • White Paper on black money to be tabled in current session
  • Tax exemption limit raised to Rs. 2 lakhs
  • Upper limit of 20% tax slab raised from 8 lakhs to 10 lakhs
  • Income up to 2 lakhs – Nil
    Rs. 2-5 lakhs –                    10 per cent
    Rs. 5 lakhs -10 lakhs         20 per cent
    Rs. 10 lakhs and above     30 per cent
  • Exemption from interest from savings bank account up to Rs. 10,000
  • Excise duty hiked to 12% from 10%
    Excise duty on large cars raised from 22% to 24%
  • No change in corporate tax rate
  • Seeks to widen service tax net
  • No capital gains tax from sale of property if money is invested in SME
  • Compulsory declaration of assets held abroad
  • National Skill Development Fund allocated Rs.1,000 crore
  • Allocation of Rs.200 crore for research on climate change
  • School education exempt from service tax
  • 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
  • Tax exemption of up to Rs 5,000 for health insurance for annual preventive health checkup
  • Coal, LNG exempt from customs duty
  • Increase customs duty on gold, platinum
  • Customs duty on gold bars, coins raised to 4 per cent


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