As Pranab Mukherjee highlighted in Economic Times Survey on last Friday, Finance minister while presenting Union Budget 2011 says growth in year 2010-2011 ha been broad based but inflation is still a matter for concern.
Pranab Mukherjee however oozed out confidence that the RBI’s monetary policy would lead to moderation in inflation in the coming months. He also also put vehemence on increasing agricultural productivity to conquer food inflation.
The Finance Minister did not disappoint individual tax payers either and raised the threshold income tax limit to Rs 1.8 lakh from the present Rs 1.6 lakh. This slab becomes uniform for both men and women now.
He brought down the eligibility age for senior citizen’s tax exemption to 60 years from 65. He also announced that exemption for senior citizens would be Rs 2.5 lakh from the present Rs 2.4 lakh.
For more about his budget see below,
He also announced a special category of tax-paying senior citizens. Those 80 or above would get an exemption of Rs 5 lakh, he said.
Pranab Mukherjee also said last year had been a remarkable fiscal year and that the Indian economy was expected to grow steadily at 9 per cent.
Mukherjee said: “I see Budget 2011-12 as a transition towards more transparent and a result-oriented economic management.”
Highlights of Pranab`s Union Budget 2011:
Following are the highlights of the Union Budget 2011:
* Total food inflation down from 20.2 per cent last year to 9.3 per cent in January, but this is still a matter of concern.
* Government has to reconcile ecological concerns with development aspirations.
* Corruption is a problem which has to be fought collectively.
* In the current year, overall economic growth expected at 8.6 %, agriculture growth at 5.4 %, industry at 8.1 % and services 9.3%.
* Government’s principle concern is high food prices; food prices were high for cereals, there was a spurt in prices of onions and milk.
* High current account deficit a cause for concern.
* Economic growth in 2011-12 likely to be 9 per cent.
* Current account deficit and average inflation in 2011-12 likely to be less than current year.
Public Debt Management Agency Bill to be introduced next financial year.
* Direct Tax Code Bill likely to be passed by Parliament next financial year after getting Standing Committee report.
* Goods and Services Tax Bill to be introduced in Parliament this year.
* Government to move towards direct cash transfer of cash subsidy as regards kerosene, LPG and fertilisers from March 2012 in view of large diversion.
* Government to keep up tempo of disinvestment process.
* Discussions on to further liberalise FDI policy.
* Portfolio investment would be permitted in SEBI registered mutual funds from foreign subscriptions.
* Financial sector reforms to move forward; Insurance Amendment Bill, LIC Bill and Pension Development Authority Bill in current session.
* Banking Laws Amendment Bill, SBI Subsidiaries Bill and BIFR bill also in current session.
* Rs 6,000 cr to be given to public sector banks to maintain capital-to-risk assets ratio norms.
* Indian micro finance equity with SIDBI to be formed at Rs 100 crore.
* Proposal to increase rural housing fund to Rs 3,000 crore.
* Budget proposes to raise housing loan limit from Rs 20 lakh to Rs 25 lakh from priority sector lending.
* Government plans to create a Women Self Help Group development fund with a corpus of Rs 500 crore.
*Allocation under Rashtriya Krishi Vikas Yojana to be raised from Rs 6,755 crore in the current year to Rs 7,860 crore.
* Rs 300 cr provided to promote pulses cultivation in rain-fed areas, another Rs 300 cr to promote farm product cultivation.
* Credit flows to farmers raised from Rs 3.75 lakh crore to Rs 4.75 lakh crores, says Mukherjee.
* Government proposes to promote organic farming methods to enable farmers get best from their land.
* Existing interest subvention scheme on short term farm loans at 7 % interest to continue.
* NABARD capital base to be strengthened; Rs 10,000 cr to be provided to it as short term credit fund.
* Tax free bonds of Rs 30,000 crore to be issued for infrastructure development. This will cover Warehousing Corporation, NHAI, IRFC and HUDCO.
* A new scheme to be introduced for refund of service tax on lines of drawback of duties.
* Capital investment in fertiliser production to be considered as infrastructure sub-sector.
* Proposal to introduce self-assessment of customs duty wherein importers and exporters will themselves assess payment of duty.
* Remuneration of anganwadi workers raised from Rs 1500 to Rs 3,000 per month. Helpers to get Rs 1,500 from Rs 750.
* Rs 50 crore grant to Aligarh Muslim University centres in Murshidabad in West Bengal and Malappuram in Kerala.
* Old age pension to persons of over the age of 80 raised from Rs 200 to Rs 500.
* Budget allocation of Rs 100 cr for Ladakh and Rs 150 cr for Jammu for implementation of projects identified by taskforce:
* Rs 9 lakh compensation to be given to men of defence and Central paramilitary forces for permanent disability and discharged from service.
* Rs 300 crore to be provided as assistance to states for modernising and stamps and registration administration.
* Budget estimates for 2011-12 projects Rs 9,32,440 crore — an increase of 24 per cent.
* Net tax to Centre will be Rs 6,64,457 crore. Non-tax receipts pegged at Rs 1,25,435 crore.
* Fiscal deficit brought down from 5.5 per cent to 5.1 per cent in 2010-11. In 2011-12, it will be 4.6 per cent.
* Total plan expenditure will go up 100 per cent in nominal terms in the next year.
* Revenue deficit fixed at 2.3 per cent in revised estimates of 2010-11 and 1.8 per cent in 2011-12.
* Threshold income tax limit raised from 1.6 lakh to 1.8 lakh.
* Exemption limit to senior citizens above 80 increased to Rs 5 lakhs.
* Minimum alternate tax raised from 18 per cent to 18.5 per cent of book profits.
* Extension of investment on long-term infrastructure bonds by one more year.
* Investment-linked deductions for fertilisers and developers of affordable housing.
* Eligibility age for senior citizens for tax exemptions reduced to 60 from 65 years.
* Net loss from direct tax proposals estimated at Rs 11,500 crore.
* Central government debt in proportion to GDP will be 44.2 per cent in 2011-12.
* Standard rate of central exercise duty maintained at ten per cent.
* No change in CENVAT rates.
* Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.
* Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
* Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
* Basic customs duty on raw silk reduced from 30 to 5 per cent.
* Export duty rates on iron ore unified and kept at 20 per cent ad valorem.
* Excise and customs duty proposals to result in the net gain of Rs 7,300 crore.
* Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
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