Finance Minister Pranab Mukherjee today announced the budget 2011-2012.
FM raised a concern on food inflation and said that strong fiscal consolidation and enlarged resource base of private enterprise is necessary to bring inflation to a moderate rate.
Implementation gaps, leakages from public programmes and the quality of outcomes pose a serious challenge. There is an urgent need to reform systems to track black money.
Gross Domestic Product estimated to have grown at 8.6% in 2010-11 in real terms.
Exports have grown by 29.4 per cent, while imports have recorded a growth of 17.6 per cent during April to January 2010-11 over the corresponding period last year.
Monetary policy measures taken expected to further moderate inflation in coming months.
Average inflation expected lower next year and current account deficit smaller.
Proposal to introduce the Public Debt Management Agency of India Bill in the next financial year.
Fiscal Deficit brought down from 5.5 %( budget estimate) to 5.1 %( real) of GDP in 2010-11.
Fiscal Deficit target kept at 4.6 %of GDP for FY 2011-12
Direct Taxes Code (DTC) to be finalized for enactment during 2011-12. DTC proposed to be effective from April 1, 2012. Areas of divergence with States on proposed Goods and Services Tax (GST) have been narrowed.
Rs.40,000 crore to be raised through disinvestment in 2011-12.
Discussions underway to further liberalize the FDI policy.
SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirements for equity schemes.
To enhance flow of funds to infrastructure sector, the FII limit for investment in corporate bonds issued in infrastructure sector being raised.
To create Rs 100cr equity fund for microfinance companies.
FII's permitted to invest in unlisted bonds.
FII limit in corporate bonds in infra is being raised by additional USD 20bn.
More banking licenses to be provided to private players.
Exemption limit for the general category of individual taxpayers enhanced from 1,60,000 to
1,80,000 giving uniform tax relief of 2,000.
Qualifying age for senior citizens reduced to 60 vs 65.
Higher exemption limit for Very Senior Citizens, who are 80 years or above.
Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
MAT rate increased from 18% to 18.5%.
Additional deduction of 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.
Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 per cent.
Ship-owners allowed duty-free spare parts import.
Export duty on iron ore pellets withdrawn.
To replace excise with ad valorem duties for cement.
20% ad valorem export duty on iron ore.
Cut customs duty on yarn to 5% from 7.5%.
Stainless steel scrap exempt from basic customs duty.
10% excise duty on branded garments.
Basic customs duty on Pet Coke and Gypsum to be reduced to 2.5%
Basic food, fuel exempted from central excise duty.
1% excise duty on 130 new items.
Reduce customs duty on micro irrigation equipment.
Service Tax to add another Rs 4,000 cr revenue gains.
Service tax retained at 10%.
To tax life insurance service providers.
Servcie tax on hotel accomodation above Rs 1,500 per day.
Domestic travel to pay Rs 50 service tax, Rs 250 on international travel.
AC hospitals with more than 25 beds under service tax.
Rs 21,000cr to be allocated to Sarva shikshan Abhiyan
Allocation of Rs 52057cr for education sector, increase of 24%.
To index NREGA wage rates to inflation.
Have allocated Rs 58000cr for social schemes (Bharat Nirman)
Food security bill to be introduced this year.
Increased priority home loan limit to Rs 25 lakh vs Rs 20 lakh
On-going metro projects will be provided financial assistance for speedy execution
Modified infra debt funds to be created to attract foreign funds for infra development.
Rs 2.14cr to be allocated towards infra development. Infra financial commission to provide assistance to infra projects.
Propose to allow tax free infra bonds worth Rs 30000 cr for PSBs.
Propose tax free bonds of Rs. 30,000 for enhancement of infra sector.
Parallel Excise Duty exemption for domestic suppliers producing capital goods needed for expansion of existing mega or ultra mega power projects.
Removal of production and distribution bottlenecks for items like fruits and vegetables, milk, meat, poultry and fish to be the focus of attention this year.
To allocate Rs 300 cr for fodder development.
Credit flow for farmers raised from 3,75,000 crore to 4,75,000 crore in 2011-12
Provision of Rs 300cr being made to promote production of bajra, jowar, ragi.
Rs 300 cr to be allocated for oil palm production.
Propose to give Rs 3000cr to NABARD.
To raise corpus of rural infra development fund to Rs 18000cr vs Rs 16000cr.
To move to direct cash subsidy for kerosene.
Mulling nutrient-based subsidy policy for urea.
Extension of NBS to cover urea under review.
Various Tax Information Exchange Agreements (TIEA) and Double Taxation
Avoidance Agreements (DTAA) concluded. Foreign Tax Division of CBDT has been strengthened to effectively handle increase in tax information exchange and transfer pricing issues
Average inflation and current account deficit to be lower and better managed next year
Budget 2011-12 to serve as a transition towards a more transparent and result oriented economic management system in India.
