LA Presentation Final

7/31/2019 LA Presentation Final

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LA:5140

INDIAN ECONOMIC DEVELOPMENT


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Union Budget 2012-13

BY:

P.MONSON PRASAD(EE09B021)

B.PAUL DINAKAR(ME09B009)

MADHU MOHAN.B(CS09B016)

K.NIKHIL(EE09B013)


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Contents

Introduction

Overview of the economy

Budget 2012-13

1. Tax proposals

2. Effect on different sectors.

Overall Impact

Pros and cons.

conclusion


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Introduction

Whatisbudget?

- Budget is a Plan made for the future Income and Expenditure.

The Union Budget of India, referred to as the annual Financial

Statement in Article 112 of the Constitution of India, is the

annual budget of the Republic of India, presented each by

the Finance Minister of India in Parliament.

The budget has to be passed by the House before it can comeinto effect on April 1, the start of India's financial year


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Introduction

The Union Budget of India for 2012 - 2013

presented by Pranab Mukherjee, the Finance

Minister of India on 16th March 2012.

This was the 7th budget of his career .

These budgetary proposals would be applicable

from 1 April 2012 to 31 March 2013.


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Overview of the Economy

GDP growth estimated at 6.9 per cent in real terms in 2011-12.

Slowdown in comparison to preceding two years is primarily

due to deceleration in industrial growth.

Current account deficit at 3.6 per cent of GDP for 2011-12 and

reduced net capital inflow in the 2nd and 3rd quarters putpressure.

Developments in Indias external trade in the first half of

current year have been encouraging.

Indias GDP growth in 2012-13 expected to be 7.6 per cent +/-0.25 per cent


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Tax Proposals

Direct Tax

Income tax exemption limit raised to Rs.2 lakh to provide

relief of Rs.2,000

20 per cent tax on income over Rs.10 lakh, up from Rs.8

lakh.

Deduction of up to Rs.10,000 from interest from savings

bank accounts.

A net revenue loss of 4,500 crore estimated as a result of

Direct Tax proposals.


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Indirecttax-

To maintain a healthy fiscal situation proposal to raise service tax

rate from 10 per cent to 12 per cent.

Proposals from service tax expected to yield additional revenue of18,660 crore.

Cinema industry exempted from service tax.


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PERSONAL TAXATION-

2010-2011

Men Women

Income Slab Tax Income Slab Tax

Income upto Rs1,80,000 Nil Income upto Rs1,90,000 Nil

Income from Rs

1,80,001 to 5,00,00010 %

Income from Rs

1,90,001 to

5,00,000

10 %

Income from Rs5,00,001 to 8,00,000

20 %

Income from Rs

5,00,001 to

8,00,000

20 %

Income above

8,00,00030 %

Income above

8,00,00030 %


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2012-13

Income TaxSlab (in Rs.)

Tax

Up to Rs. 2 lakh No Tax

Rs. 2 Lakhs toRs. 5 Lakhs

10%

Rs. 5 Lakhs toRs.10 Lakhs 20%

Above Rs. 10

Lakhs

30%


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Senior Citizens (Aged 60 years but less than

80 years)

Income Tax Slab (in Rs.) Tax

Up to Rs. 2.5 Lakh No Tax

Rs. 2.5 Lakhs to Rs. 5

Lakhs10%

Rs. 5 Lakhs to Rs. 10

Lakhs20%

Above Rs. 10 Lakhs 30%


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Very Senior Citizen (Above 80 years)

Up to Rs. 5Lakh No Tax

Rs. 5 Lakhs toRs. 10 Lakhs

20%

Above Rs. 10Lakhs

30%


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Transport: Roads and Civil Aviation

Allocation of the Road Transport and Highways Ministryenhanced by 14 per cent to `25,360 crore.

Target of covering a length of 8,800 km. under NHDP

(National Highways Development Project).

ECB(External Commercial Borrowing) proposed to beallowed for capital expenditure on the maintenance and

operations of toll systems for roads and highways, if they

are part of original project.

ECB to be permitted for working capital requirement of

airline industry for a period of one year, subject to a total

ceiling of US $ 1 billion.

Proposal to allow foreign airlines to participate upto 49 per

cent in the equity of an air transport undertaking under

active consideration of the government


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Textiles

Government has announced a financial package of 3,884 crorefor waiver of loans of handloom weavers and theircooperative societies.

2 more mega handloom

Prakasam and Guntur districts in AP. Godda in Jharkhand.

3 Weavers Service

Mizoram, Nagaland, Jharkhand.

A Powerloom Mega Cluster in Maharastra with a budget of70crore.


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MSME

5,000 crore India Opportunities Venture Fund to be set

up with SIDBI.

2 SME exchanges are launched in Mumbai recently. To

enable greater access to finance by Small and Medium

Enterprises (SME).

Policy requiring Ministries and CPSEs to make min 20% of

their annual purchases from MSEs approved.


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Agriculture

Plan Outlay for Department of Agriculture and co-operationincreased by 18% from Rs 17,123 crore in 2011-12 to Rs20,208 crore in 2012-13.

Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to9,217 crore in 2012-13.

Initiative of Bringing Green Revolution to Eastern India(BGREI) has resulted in increased production and productivityof paddy. Allocation for the scheme increased to `1,000 crorein 2012-13 from `400 crore in 2011-12

500crore to Mission for Protein Supplement for improvingproductivity in dairy sector.

New project with World Bank assistance was allocated2,242crore for broadening production of fish to coastalaquaculture.

Kisan Credit Card (KCC) Scheme to be modified to make KCC asmart card which could be used at ATMs


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Irrigation

To maximise the flow of benefits from investments in

irrigation projects, structural changes in Accelerated

Irrigation Benefit Programme (AIBP) are being made.

Allocation for AIBP in 2012-13 stepped up by 13 per cent

to 14,242 crore.

Irrigation and Water Resource Finance Company being

operationalized to mobilize large resources to fund

irrigation projects.

A flood management project approved by Ganga Flood

Control Commission at a cost of `439 crore.


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Scheduled Castes and Tribal Sub

Plans

Allocation for Scheduled Castes Sub Plan at `37,113 crore in

BE 2012-13 represents an increase of 18 per cent over BE

2011-12.

Allocation for Tribal Sub Plan at `21,710 crore in BE 2012-13

represents an increase of 17.6 per cent.


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Rural Development and Panchayat

Raj Budgetary allocation for rural drinking water and

sanitation increased from 11,000 crore to `14,000 crore

representing an increase of over 27 per cent

Allocation for PMGSY increased by 20 per cent to

Rs.24,000 crore to improve connectivity.

Major initiative proposed to strengthen Panchayats

through Rajiv Gandhi Panchayat Sashaktikaran Abhiyan.

Backward Regions Grant Fund scheme to continue in

twelfth plan with enhanced allocation of 12,040 crore in

2012-13, representing an increase of 22 per cent over

the BE 2011-12.


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Central Plan Outlay(in crores)2010 2011-12 2012-13

Grand total 464316 558172 651509

Agriculture 13825 12861 16121

2Civil Aviation 6223 5621 7293

Communication and IT 13708 15101 21394

Environment and Forest 2181 1902 2430

External Affairs 800 1125 1500

Health and Family welfare 20726 24315 30477

Home Affairs 2542 6152 10500

Human Resource Development 43514 51772 61427Petroleum and Natural Gas 60967 69883 79728

Power 42945 62792 62425

Rural Development 720261 67139 73175

Science and Technology 4650 5432 5975


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Impact Analysis

INDIA INC.

PROPOSAL EFFECT

Excise duty and service tax raised to 12%

from 10%

Price need to be raised, margins may get

affected

Investment in infrastructure to go up to

50 lakh crores in 12th five year plan in

both public and private sectors.

More opportunities for private sector to

invest in PPP projects

New sector to be added for purpose of

investment linked deduction

Incentives for investment


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Impact Analysis

Capital marketPROPOSAL EFFECT

Reduction Of Security Transaction Tax (STT)

on delivery based sale and purchase of share

from 0.125 to 0.1 %

Transaction costs will come down

Qualified foreign investors allowed to invest

in corporate bond market

Deepening of corporate debt

market

Initial Public Offering (IPO) of Rs 10 cr. and

above will only be in electronic from

Cost of issuing shares will come

down.


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Impact Analysis TAXPAYER

PROPOSAL EFFECT

Individuals exemption limit to be raised to

Rs 200,000

Provides tax relief of Rs 2,000

Allow deduction of up to Rs 10 lakhs for

interest from saving accounts

More benefit for senior citizens

Upper limit of 20% to be raised to 10 lakh

from 8 lakh

Tax benefit of Rs20,000

Allow deduction of up to Rs 5000 for

preventive health check up

Health awareness


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Impact Analysis ECONOMY

PROPOSED EFFECT

Rs.30,000 crores to be raised from

disinvestment in 2012-13

Retail investors will get PSU shares

Provision regarding implementation of

Advance Pricing Agreement (APA) to be

introduced in finance bill 2012

Big boost to IT and Business process

outsourcing(BPO) service providers

Rs15 cr. to be provided for capitalization of

public sector banks and financials

institutions

Banks will be better equipped to

face competition


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PROS

This Budget identifies objectives relating to growth

recovery, private investment, malnutrition and governance

matters.

This budget is good for our bright future because

government is trying to reduce fiscal deficit, it is possible

through only increasing tax.

Demand will boost because of rural development

and increase in exemption limit.

Sales will increase as there is rise in the income of

the consumer.

GDP increases.


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Cons

Increase of service tax from 10% to 12% would increase pressure

on common man.

The cost of production also increases due to increase in service

tax adding to existing high input costs.

Even though the income tax slab has been increased it is still anobstacle for the middle class.


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Conclusion

High budget deficit remains as the major problem for

framing the budget plans.

Increase in service tax is necessary for decreasing the

deficit but has its own effects.


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Thank you

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