The much awaited Budget of Hope was presented by Union Minister of Finance Pranab Mukherjee today; mentioned below are brief indicates of the Union Budget 2011-12:
INFLATION: The finance minister opened his speech with reference to inflation saying that food inflation came down from 20.2 per cent last year to 9.3 per cent in January 2011 but it was still a matter of concern. “Government’s principle concern is high food prices… food prices were high for cereals, there was a spurt in prices of onions and milk,” he said. The minister did mention that though Inflation continues to be a primary concern, it is expected to fall next year.
AGRICULTURE: In what may be a big relief for farmers, the FM said credit flows to farmers will be raised from Rs 3.75 lakh crore to Rs 4.75 lakh crores and the allocation under Rashtriya Krishi Vikas Yojana will be raised from Rs 6755 crore in the current year to Rs 7860 crore. (Farm loans at 4%; credit target raised to Rs 4, 75,000cr).
An additional Rs 300 crore will be provided to promote pulses cultivation in rain-fed areas and another Rs 300 crore to promote farm product cultivation.
In joy for anganwadi workers, their remuneration is being raised from 1500 to Rs 3,000 per month. Anganwadi helpers will get Rs 1,500 from Rs 750, Pranab said.
DEFENCE: The finance minister has allotted Rs 1.64 lakh crore for defense saying that more will be given if required. Rs 9 lakh compensation will be given to men of defense and central paramilitary forces for permanent disability and on being discharged from service.
TAXES: No change in tax slabs has been proposed. The tax exemption limit for general category has been raised from Rs 1, 60,000 to Rs 1,80,000.
For senior citizens, exemption age limit has been reduced from 65 to 60. Their tax exemption limit will be Rs 2, 50,000.
Apart from this, a new exemption bracket has been created for those above 80 years of age. Their tax exemption limit will be Rs 5, 00,000.
The FM announced that Direct Tax Code will be implemented from April, 2012 and the Goods and Services Tax Bill is to be introduced in Parliament this year. (Direct Taxes Code to be implemented from April 1, 2012 )
There is a proposal to introduce self-assessment of customs duty wherein importers and exporters will themselves assess payment of duty.
A new scheme is to be introduced for refund of service tax on the lines of drawback of duties, he announced. Also, capital investment in fertiliser production will be considered as infrastructure sub-sector, Pranab said. Tax-free bonds of Rs 30,000 crore will be issued for infrastructure development which will cover Warehousing Corporation, NHAI, IRFC and HUDCO.
EDUCATION: An Rs 50crore grant is being allocated to Aligarh Muslim University centres in Murshidabad in West Bengal and Malappuram in Kerala. Also, the government has decided to allot Rs 100 crore to IIT Kharagpur.
GROWTH: Predicting growth patterns over the next fiscal, Pranab said the overall economic growth in the current fiscal was expected at 8.6 per cent, agriculture growth at 5.4 per cent, industry at 8.1 per cent and services 9.3 per cent. In the next fiscal, economic growth was likely to be 9 per cent he said. (Economy grew 8.2 per cent in last 2010 quarter)
Pranab said India raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by USD 20 billion.
The government, he said, aims to provide Rs 201.5 billion capital infusion in state-run banks in 2011-12 and Rs 3 billion for 60,000 hectares under palm oil plantation
“I see Budget 2011-12 as transition towards more transparent and result-oriented economic management,” he said adding that stronger fiscal coordination was needed.
He said that corruption continued to be deterrent in the country’s development and had to be fought extensively.
Pranab Mukherjee said the government plans to create a Women Self Help Group development fund with a corpus of Rs 500 crore. There is also a proposal to increase rural housing fund to Rs 3,000 crore. (Low-cost housing loans of Rs 15 lakh to get 1% interest sop)
He also announced benefits for Below Poverty Line families by allowing direct transfer of subsidies in kerosene and LPG for such individuals.
NABARD capital base to be strengthened, Rs 10,000 cr to be provided to it as short term credit fund.
He announced the formation of Indian micro finance equity with SIDBI at Rs 100 crore. Another Rs 6,000 crore will be given to public sector banks to maintain capital-to-risk assets ratio norms, he said.