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
