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Indian Union Budget 2011 Highlights
Finance Minister of India Pranab Mukherjee today presented the Union budget for the financial year 2011-12. The budget which was presented at Loksabha early approved by the Union Cabinet this morning. On the budget speech, the minister says that corruption is a problem in our country and we have to fight it collectively. He made some salient features and points in this year's financial budget speech. The following are them:
* Total food inflation is down from 20.2% last year to 9.3% in January
* Government has to reconcile ecological concerns with development aspirations.
* Budget 2011-12 will help a transition towards more transparent and result-oriented economic management.
* In current year, overall economic growth is expected at 8.6%, agriculture growth at 5.4%, industrial growth at 8.1%, and services growth at 9.3%.
* Government's principle concern is high food prices; food prices were high for cereals, while there was a spurt in prices of onions and milk.
* High current account deficit is a cause of concern.
* Current account deficit and average inflation in 2011-12 is likely to be less than current year.
* Public Debt Management Agency Bill will be introduced in the next financial year.
* Direct Tax Code Bill likely to be passed by Parliament in the next financial year after getting standing committee's report.
* Goods and Services Tax Bill will be introduced in Parliament this year.
* Government will move towards direct cash transfer of cash subsidy as regards kerosene, LPG and fertilizers from March 2012 in view of large-scale diversion.
* Government will keep up tempo of divestment process.
* Discussions on to further liberalize foreign direct investment policy.
* Portfolio investment from foreign subscriptions will be permitted in mutual funds registered with the Securities and Exchange Board of India.
* Financial-sector reforms will move forward; Insurance (amendment) Bill, LIC Bill and Pension Development Authority Bill will be introduced in the current session of Parliament.
* Banking Laws (Amendment) Bill, SBI Subsidiaries Bill and BIFR Bill will also be introduced in the current session.
* Rs6,000 crore will be given to public-sector banks to maintain capital-to-risk assets ratio norms.
* Indian micro finance equity with SIDBI will be formed at Rs100 crore.
* Proposal to increase rural housing fund to Rs3,000 crore.
* Proposal to raise housing loan limit from Rs20 lakh to Rs25 lakh from priority-sector lending.
* Government plans to create a Women's Self Help Group Development Fund with a corpus of Rs500 crore.
* Allocation under the Rashtriya Krishi Vikas Yojana will be raised from Rs6,755 crore in the current year to Rs7,860 crore.
* Rs.300/- crore are being provided to promote pulses cultivation in rain-fed areas, another Rs300 crore to promote farm product cultivation.
* Credit flows to farmers will be raised from Rs3.75 lakh crore to Rs4.75 lakh crore.
* Government proposes to promote organic farming methods to enable farmers to get the best from their land.
* Existing interest subvention scheme on short-term farm loans at 7% interest will continue.
* NABARD's capital base will be strengthened; the bank will be given Rs10,000 crore as a short-term credit fund.
* Tax-free bonds of Rs30,000 crore will be issued for infrastructure development. This will cover the Warehousing Corporation of India, National Highways Authority of India, IRFC, and Housing and Urban Development Corporation.
* Capital investment in fertilizer production will be considered infrastructure sub-sector.
* A new scheme will be introduced for refund of service tax on lines of drawback of duties.
* Proposal to introduce self-assessment of customs duty under which importers and exporters will themselves assess the duty they have to pay.
* Remuneration of aanganwadi workers has been raised from Rs1,500 a month to Rs3,000. Helpers will get Rs1,500, up from Rs750.
* Rs50 crore grant to Aligarh Muslim University centres in Murshidabad in West Bengal and Malappuram in Kerala.
* Old age pension for persons aged 80 and above will be raised from Rs200 to Rs500.
* Budgetary allocation of Rs100 crore for Ladakh and Rs150 crore for Jammu for implementation of projects identified by task force.
* Rs.9 lakh compensation will be given to men of the defense and central paramilitary forces in case they suffer from permanent disability and are discharged from service.
* Rs.300 crore will be provided as assistance to states to modernize stamps and registration administration.
* Budget estimates for 2011-12 project Rs9,32,440 crore — an increase of 24%.
* Net tax to Centre will be Rs6,64,457 crore. Non-tax receipts are pegged at Rs1,25,435 crore.
* Fiscal deficit has been brought down from 5.5% to 5.1% in 2010-11. In 2011-12, it will be brought down further to 4.6%.
* Total plan expenditure will go up cent per cent in nominal terms in the next year.
* Revenue deficit has been fixed at 2.3% in revised estimates for 2010-11 and 1.8 per cent in projections for 2011-12.
* Threshold income-tax limit is being raised from Rs1.6 lakh to Rs1.8 lakh.
* Exemption limit for senior citizens above 80 years of age is being increased to Rs5 lakh.
* Minimum alternate tax (MAT) is being raised from 18% to 18.5% of book profits.
* Proposal to extend investment on long-term infrastructure bonds by one more year.
* Investment-linked deductions will be provided for fertilizers and developers of affordable housing.
* Eligibility age for senior citizens for tax exemptions is being reduced to 60 from 65 years.
* Net loss from direct tax proposals has been estimated at Rs11,500 crore.
* The central government's debt in proportion to the GDP will be 44.2% in 2011-12.
* Standard rate of central excise duty has been maintained at 10%.
* CENVAT (central value-added tax) rates will remain unchanged.
* Nominal 1% central excise duty will be levied on 130 items entering the tax net. Basic food, fuel and precious stones as well as gold and silver jewellery will be exempted.
* Peak rate of customs duty is being maintained at 10% in view of the global economic situation.
* Basic customs duty on agricultural machinery will be reduced to 4.5% from 5%.
* Basic customs duty on raw silk reduced from 30% to 5%.
* Export duty rates on iron ore are being unified and kept at 20% ad valorem.
* Excise and customs duty proposals are expected to result in a net gain of Rs.7,300 crore.
* The service-tax net is being widened to cover hotel accommodation costing more than Rs1,000 a day, air-conditioned restaurants serving liquor, and some categories of hospitals and diagnostic tests.
* Service tax on air travel is being increased by Rs50 for domestic travel and Rs250 for international travel in the economy class. In higher classes, the tax will be a flat 10%.
* Some legal services will be brought under the service-tax net. Service by an individual to another individual is exempted.
* Net revenue loss on account of taxes and duties is estimated at Rs200 crore.
* Service-tax proposals are expected to result in a revenue gain of Rs4,000 crore.
* Net revenue loss on account of direct taxes will be Rs11,500 crore. Net revenue gain on account of indirect taxes will be Rs11,300 crore.