Friday, March 16, 2012

Union Budget 2012-13: Highlights

Union Finance Minister Pranab Mukherjee on 16 March 2012, tabled the union budget in the parliament for the financial year 2012-13. Mukharjee, who presented the fourth annual budget after he took over as the finance minister in 2008, seemed to focus on the recovery of the domestic economy.

The budget 2012-13 aims at achieving the rapid growth for the economy which remained on a downward spiral all through the fiscal year 2011-12. Finance Minister in the budget paid due attention on developing the conditions for economic growth. The budget estimated the Indian economy to grow at 7.6% in the fiscal year 2012-13.

Given below are the highlights of the budget 2012-13:

•    Total expenditure in 2012-13 seen at 14.9 trillion rupees, up 29 percent
•    Plan expenditure budgeted at 521.25 billion rupees in 2012-13, up 18 percent
•    Economy expected to grow at 7.6 percent in 2012-13, plus or minus 0.25 percent
•    Income-tax exemption limit raised to 2 lakh rupees from 180000 rupees
•    Fiscal deficit seen at 5.1 percent of GDP in 2012-13
•    Plan expenditure budgeted at 521.25 billion rupees in 2012-13, up 18 percent
•    Net market borrowing seen at 4.8 trillion rupees in 2012-13
•    Proposes to raise service tax rate to 12 percent from 10 percent
•    Gross tax receipts seen at 10.8 trillion rupees in 2012-13
•    Non-tax revenue seen at 1.64 trillion rupees in 2012-13
•    Proposes to levy tax on all services except 17 items in the negative list from 2012-13
•    No change in corporate tax rates
•    Allow external commercial borrowing of up to 1 billion dollar to raise working capital for airlines industry for 1 year
•    To allow qualified foreign investors in Indian corporate debt markets
•    To allow external commercial borrowing to part finance rupee debt in power projects
•    Allocates 1.94 trillion rupees for defence in 2012-13, up from 1.64 trillion rupees in previous year
•    To award contracts to build 8800 km of roads in 2012-13
•    15888 crore rupees to be provided for capitalization of public sector banks and financial institutions
•    Investment in 12th Plan in infrastructure to go upto 5000000 crore rupees; half of this is expected from private sector
•    Allocation of Road Transport and Highways Ministry enhanced by 14 per cent to 25360 crore rupees
•    5000 crore rupees India Opportunities Venture Fund to help small enterprises
•    Allocation to agriculture enhanced; RKVY gets 9217 crore rupees; BGREI gets 1000 crore rupees;.2242 crore rupees project to improve dairy productivity; 500 crore rupees for coastal aquaculture
•    Target for agricultural credit raised to 575000 crore rupees
•    200 crore rupees for awards to incentivise agricultural research
•    National Mission on Food Processing to be started in cooperation with State Governments
•    Rural drinking water and sanitation gets 27 per cent rise in allocation to 14000 crore rupees; PMGSY gets 20 per cent rise to 24000 crore rupees
•    Right To Education-Sarva Shiksha Abhiyan gets 25555 crore rupees allocation, showing an increase of 21 per cent; 6000 schools to be set up at block level as model schools in the 12th Plan; Credit Guarantee Fund to be set up for better flow of credit to students
•    National Urban Health Mission is being launched
•    34 per cent increase in allocation to National Rural Livelihood Mission, to 3915 crore rupees
•    1000 crore rupees allocated for National Skill Development Fund
•    Widow pension and disability pension raised from Rs. 200 to Rs. 300 per month
•    Grant on death of primary breadwinner of a BPL family in the age group 18-64 years doubled to 20000 rupees
•    4000 residential quarters to be constructed for Central Armed Police Forces
•    Government doubles allocation for tax-free bonds to 600 billion rupees for financing infrastructure projects in 2012-13
•    Disinvestment target in 2012-13 of 300 billion rupees
•    Expects country to become self-sufficient in urea production in five years
•    Proposes to raise agricultural credit target in 2012-13 to 5.75 trillion rupees
•    To keep 2012-13 subsidies under 2 percent of GDP
•    Current account deficit seen at 3.6 percent of GDP in 2011-12