lalsab Attar

BEC-DOMSBAGALKOT

Wednesday, May 3, 2023 1

WEL COME TO


INDIAN CENTRAL BUDGET2011-12

CONTENTS Introduction Budget Estimation Key Features Taxation Subsidies Types of Sectors Impacts Conclusion


INTRODUCTION

Budget is plan for income and expenditure over a future period which is supposed to achieve stated objectives - in a government's case raising taxes and other revenue and spending to provide services such as defense, education or social security etc...

The Union Budget of India for 2011-2012 was present by Pranab Mukherjee the finance Minister of India on 28th February, 2011. This budgetary proposals would be applicable from 1st April 2011 to 31st March 2012.


BUDGET ESTIMATION 2011-2012 Total expenditure proposed at ` 12,57,729 crores. Increase of 18.3 per cent in total Plan allocation. Increase of 10.9 per cent in the Non-plan expenditure. Increase of 23 per cent in Plan and Non-plan transfer to States

and UTs. Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to

5.1 per cent Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12. Fiscal Deficit to be progressively reduced to 3.5 per cent by

2013-14. “Effective Revenue Deficit” estimated at 2.3 per cent of GDP .



Sector Shares (%) in Expenditure of Central Government

2010-11 (Revised estimates)

Total Agri2.0 Total De-

fence15.6

Total Finance

36.1Total Home

3.4

Total In-dustry

(Heavy+Small), 0.2

Social Sector20.4

Others22.2

Sector Share(%) in Total Central Government Budget Allocations , 2010-11(RE)

24.2% (Transfer to States & UTs)

75.8 % ( Interest Payments + Others)

2011-12 (Budget Estimates)

Total Agri1.9 Total De-

fence16.1

Total Finance

36.8Total Home

3.9

Total In-dustry(Heavy+Smal

l)0.2

Social Sector20.4

Others20.7

Sector Share(%) in Total Central Government Budget Allocations , 2011-12 (BE)

28 % Transfers to States/UTs

72 % Interest Payments + Others)

Key Features of Budget 2011-12

OPPORTUNITIES Swift and broad based growth in 2010-11 has put the

economy back to its pre-crisis growth trajectory. Fiscal consolidation has been impressive.

Significant progress in critical institutional reforms that would set the pace for double-digit growth in the near future.

Dynamism in the rural economy due to scaled up flow of resources to the rural areas.


CHALLENGES Structural concerns on inflation management to be addressed by

improving supply response of agriculture to the expanding domestic demand and through stronger fiscal consolidation.

Implementation gaps, leakages from public programmes and the quality of outcomes pose a serious challenge.

Impression of drift in governance and gap in public accountability is misplaced. Corruption as a problem to be fought collectively. Government to improve the regulatory standards and administrative practices.

Inputs from colleagues on both sides of House are important in the wider national interest.

Budget 2011-12 to serve as a transition towards a more transparent and result oriented economic management system in India.


-


Dearer

-Legal Services

-Healthcare in top – end Pvt.

hospitals.

-Branded Cloths

-Gold

-A/c restaurants

serving Liquor

-Hotel Services

-Printers-Paper-Soap-Steel

-Diapers & Sanitary napkins

-Homoeopathic Medicines

-Yarn/raw silk-Mobile Phones

-Agarbatti-Solar Lantern,

LED Lights-Battery Driven- Vehicles

-Agriculture machinery

Cheaper

Taxation



Direct Taxes Exemption limit for the general category of individual taxpayers

enhanced from Rs 1,60,000 to Rs 1,80,000 giving uniform tax relief of Rs 2,000.

Exemption limit enhanced and qualifying age reduced for senior citizens.

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.

Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.

Tax incentives extended to attract foreign funds for financing of infrastructure.

Additional deduction of Rs 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.

Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers.

Investment linked deduction to businesses developing affordable housing.

Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 per cent.

System of collection of information from foreign tax jurisdictions to be strengthened.

A net revenue loss of Rs 11,500 crore estimated as a result of proposals.

Contd….

Indirect Taxes To stay on course for transition to GST. Central Excise Duty to be maintained at standard rate of 10 per

cent. Reduction in number of exemptions in Central Excise rate

structure. Nominal Central Excise Duty of 1 per cent imposed on 130 items

entering in the tax net. Lower rate of Central Excise Duty enhanced from 4 per cent to 5

per cent. Optional levy on branded garments or made up proposed to be

converted into a mandatory levy at unified rate of 10 per cent. Peak rate of Custom Duty held at its current level.


Service Tax Hotel accommodation in excess of Rs 1,000 per day and service

provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax.

Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.

Service Tax on air travel both domestic and international raised. All individual and sole proprietor tax payers with a turn over upto

Rs 60 lakh freed from the formalities of audit. To encourage voluntary compliance the penal provision for

Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws.

Proposals relating to Service Tax estimated to result in net revenue gain of Rs 4,000 crore.

Proposals relating to Direct Taxes estimated to result in a revenue loss of Rs 11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs 11,300 crore.Wednesday, May 3, 2023 14

Personal Taxation


Current Slabs (`) Proposed Slabs (`) Basic rate of tax

Upto 1,60,000

1,60,001 to 5.00,000

5,00,001 to 8,00,000 Above 8,00,001

Upto1,80,000

1,80,001 to 5,00,000 5,00,001 to 8,00,000

Above 8,00,001

Nil

10%

20%

30%

For Men:



Upto 1,90,000

1,90,001 to 5,00,000

500,001to800,000

Above 8,00,000

Upto 1,90,000

1,90,001 to 5,00,000 5,00,001 to 8,00,000

Above 8,00,000

Nil

10%

20%

30%

For WOMENNo change in tax Structure

o Age for eligibility reduced from 65 years to 60 Years


Upto 2,40,000

2,40,001 to 5,00,000

5,00,001 to 8,00,000

Above 8,00,001

Upto 2,50,000

2,50,001 to 5,00,000

5,00,001 to 8,00,000

Above 8,00,001

Nil 10% 20% 30%


For Senior Citizen (60-80years)

For Senior Citizen (80years & above)

Hike in exemption limit to ` 5 lakh will result on big gainsCurrent Slabs (`) Proposed Slabs (`) Basic rate of tax

Upto 2,40,000

2,40,001 to 5,00,000

500,001 to 8,00,000 Above 8,00,001

Upto 5,00,000

-

5,00,001 to 8,00,000

Above 8,00,001

Nil

10%

20%

30%


SUBSIDIES o Food subsidy bill in 2011-12 seen at 605.7 billion rupees o Revised food subsidy bill for 2010-11 at 606 billion rupees o Fertiliser subsidy bill in 2011-12 seen at 500 billion rupees o Revised fertiliser subsidy bill for 2010-11 at 550 billion

rupees o Petroleum subsidy bill in 2011-12 seen at 236.4 billion

rupees o Revised petroleum subsidy bill in 2010-11 at 384 billion

rupees o State-run oil retailers to be provided with 200 billion rupee

cash subsidy in 2011-12 Wednesday, May 3, 2023 19

Types of Sectors DefenceEducationRural DevelopmentInfrastructure & Industry AgricultureHealthBanking


In the Union Budget for the year 2011-2012, the Indian Finance Ministry has given special attention to defence by increasing the defence outlay.

As per the defence budget for the fiscal 2011-12, the Indian Finance Ministry has given a 11.6 per cent hike which amounts to $34 billion.

The total budgetary allocation:

Indian Army - $14.2 billion.

Indian Navy $2.35 billion

Indian Air Force (IAF) $3.53 billion

Defence Research and Development Organisation (DRDO) $1.25 billion.


Defence

http://indianarmy.nic.in/

http://indianarmy.nic.in/

http://indiannavy.nic.in/

http://indianairforce.nic.in/

http://www.drdo.org/



Education

Allocation for education increased by 24 per cent over current year.

Sarva Shiksha Abhiyan 21,000 crore allocated, which is 40 per cent higher than Budget for 2010-11.

Pre-matric scholarship scheme to be introduced for needy SC/ST students studying in classes IX and X.


Rural Development


12 percent increase in the department's plan outlay from Rs.66,100 crore in the current fiscal to Rs.74,100 crore for 2011-12

Allocation for Pradhan Mantri Gram Sadak Yojana is proposed to be increased to Rs 12,000 crore. For Indira Aawas Yojana, the allocation has been increased to Rs 8,800 crore.

Infrastructure and Industry

Allocation of ` 2,14,000 crore for infrastructure in 2011-12. This is an increase of 23.3 per cent over 2010-11. This also amounts to 48.5 per cent of total plan allocation.

Government to come up with a comprehensive policy for further developing.


Agriculture Sector

25

Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from` 6,755 crore to ` 7,860 crore.

Credit flow for farmers raised from ` 3,75,000 crore to ` 4,75,000 crore in 2011-12.

Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for providing short-term crop loans to farmers who repay their crop loan on time.

In view of enhanced target for flow of agriculture credit, capital base of NABARD to be strengthened by ` 3,000 crore in phased manner.

10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for2011-12.

Health Plan allocations for health stepped-up by 20 per cent. Scope of Rashtriya Swasthya Bima Yojana to be expanded to

widen the coverage. Centralised air conditioned (AC) hospitals with more than 25

beds brought under 10 percent service tax Diagnostic service providers levied 10 percent service tax The finance minister also proposed to provide outright

concession to factory-built ambulances in place of the existing refund-based concession from excise duty


Banking The insurance legislation, if successfully passed in parliament, would

increase the FDI limit to 49 percent from the current 26 percent USD 6.6 bn to National Bank for Agriculture and Rural Development

(NABARD) from Union Budget 2011 Home loan limit hiked to USD 55,000 for priority sector lending Rural housing fund to get USD 664 m Indian micro-finance equity with Small Industries Development Bank of

India (SIDBI) to be formed with USD 22 m Banking Laws Amendment Bill, SBI (State Bank of India) Subsidiaries Bill

and BIFR (Board for Industrial and Financial Reconstruction) Bill will be introduced this year

The LIC bill would increase the share capital of Life Insurance Corporation (LIC) to USD 22 m from its current USD 1.1 m

Financial Inclusion - Target of providing banking facilities to all 73,000 habitations having a population of more than 2,000 to be completed during 2011-2012


Impacts on Sectors



SECTORS EFFECTS JUSTIFICATIONDefence Positive The Union Budget 2010

-11 gave important in the development of agriculture and schemes for farmers.

Agriculture Positive The budget is positive for Banking sector. It reduces the percentage on income tax, agriculture credits, on excise duty etc…

Health Positive Education sector is positive in budget because Free & compulsory education act mainly privileges given up to the age of 6-14 years notified the achievements of Sarva Shiksha Abhiyan(SSA) launched by the Govt.


Education Positive It has allowed rs 1900 cores by the Government to IT sector for unique identity project.

Infrastructure &Industry

Positive Much important given to Health sector , Finance minister proposed offer health facilities & also realized rs 22,300 crore for the welfare of society.

Banking Neutral Excise tariff to be charged on Diesel and Petrol at Re 1 on the every litre. This can also be translated as an increase in price of Rs 2.58 per litre and Rs 2.67 per litre on diesel and petrol respectively

Conclusion


Thank You…


Economy & Finance

lalsab Attar