Pranab tables tricky budget 2011-12
Tue, 01 Mar 2011
Union Finance Minister Pranab Mukherjee on Monday tabled his 3rd budget in this United Progressive Alliance (UPA) government, expecting to continue recoveries from previous downfall held due to massive recession.
Tabling his tricky budget, an attempt to balance between popularity, good fiscal housekeeping and a push to reforms, Finance Minister (FM) said, India has bounced back on the growth track and could continue its growth in the forth-coming years. He pegged an economic growth rate of 8.75% to 9.25% in the Fiscal Year (FY) 2011-12.
Marking to inflation, food prices and corruption as three major challenges, Pranab has proposed a 5-fold strategy on black money.
Mukherjee estimated a budget proposal of Rs 9,32,440 crore, a rise of 24% for year 2011-12.
Disappointing to employees, Mukharjee has only raised the tax exemption limit to Rs. 1,80,000 from previous Rs. 1,60,000 while analysts were expecting a hike to at least Rs. 2,00,000.
However, FM has added a new category of 80 years ex-employee whose tax rebate limit would be Rs.5,00,000. No exemption would be raised to women and other senior citizen employees.
Pleasing to Aanganwadi workers, FM has raised the salary to Rs.3000/- per month from current Rs.1,500. Helpers would get Rs.1,500/- per month.
Here are some main points of his Budget 2011-12:
- Expenditure in 2011-12 is estimated at Rs 12,57,729 crore, an increase of 13.4%.
- Revenue deficit fixed at 2.3% in revised estimates of 2010-11 and 1.8% in 2011-12.
- Tax reductions to result in revenue loss of Rs 11,500 crore
- Budget allocation for Defence sector at more than 1.64 trln rupees
- Government intends to spend Rs.2.14 lakh crore as budgetary support for the infrastructure sector in 2011-12
- Total plan expenditure will go up 100% in nominal terms in the next year
- Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent
- Basic customs duty on raw silk reduced from 30 to 5 per cent
- 20% ad valorem export duty on iron ore
- Nominal one per cent central excise duty on 130 items entering the tax net; Basic food and fuel and precious stones, gold and silver jewellery will be exempted: FM
- Import duty on gypsum and coal from 5% to 2.5%
- Solar lanterns customs duty reduced
- Mobiles, homeopathic medicines, steel, LED, Diapers ? cheaper
- Service tax unchanged at 10%
- Scholarship for needy SC/ST students in class 9 and class 10
- Service tax widened to cover hotel accommodation above Rs.1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests
- Rs.9 lakh compensation to be given to men of Defence and Central paramilitary forces for permanent disability and discharged from service
- Minimum alternate tax raised from 18% to 18.5% of book profits
- 1% interest subvention for home loans up to Rs.15 lakh
- Housing loan limit raised to 25 lakh for priority sector lending
- Government to introduce GST bill amendments in this session
- Rollout of Direct Tax Code to be effective from April 1, 2002