WEL COME                    TO  BEC-DOMS                        BAGALKOT Monday, November 14,                             ...
INDIAN CENTRAL BUDGET        2011-12                  Monday, November 14, 2011   2
CONTENTS Introduction Budget Estimation Key Features Taxation Subsidies Types of Sectors Impacts ConclusionMonday,...
INTRODUCTION Budget is plan for income and expenditure over a future periodwhich is supposed to achieve stated objectives ...
BUDGET ESTIMATION 2011-2012 Total expenditure proposed at ` 12,57,729 crores. Increase of 18.3 per cent in total Plan al...
2010-11 (Revised estimates)                               2011-12 (Budget Estimates)          Sector Share(%) in Total Cen...
Key Features of Budget 2011-12OPPORTUNITIES    Swift and broad based growth in 2010-11 has put the    economy back to its...
CHALLENGES Structural concerns on inflation management to be addressed by  improving supply response of agriculture to th...
-Printers                                       -Paper-                                       -Soap                  Deare...
TaxationMonday, November 14,                                  102011
Direct Taxes Exemption limit for the general category of individual taxpayers  enhanced from Rs 1,60,000 to Rs 1,80,000 g...
Contd…. Lower rate of 15 per cent tax on dividends received by an Indian  company from its foreign subsidiary. Benefit o...
Indirect Taxes To stay on course for transition to GST. Central Excise Duty to be maintained at standard rate of 10 per ...
Service Tax Hotel accommodation in excess of Rs 1,000 per day and service  provided by air conditioned restaurants that h...
Personal TaxationFor Men:Current Slabs (`)                  Proposed Slabs (`)     Basic rate of                          ...
For WOMENNo change in tax StructureCurrent Slabs (`)                 Proposed Slabs (`)     Basic rate of taxUpto 1,90,000...
o Age for eligibility reduced from 65 years to 60 Years Current Slabs (`)           Proposed Slabs (`)           Basic rat...
For Senior Citizen (80years & above)Hike in exemption limit to ` 5 lakh will result on big gainsCurrent Slabs (`)         ...
SUBSIDIESo    Food subsidy bill in 2011-12 seen at 605.7 billion rupeeso   Revised food subsidy bill for 2010-11 at 606 bi...
Types of SectorsDefenceEducationRural DevelopmentInfrastructure & IndustryAgricultureHealthBankingMonday, November ...
Defence In the Union Budget for the year 2011-2012, the Indian Finance Ministry has  given special attention to defence b...
Education Allocation for education increased by 24 per cent over  current year. Sarva Shiksha Abhiyan 21,000 crore alloc...
Rural Development 12 percent increase in the departments plan outlay from Rs.66,100 crore in the current fiscal to Rs.74,1...
Infrastructure and Industry Allocation of ` 2,14,000 crore for infrastructure in  2011-12. This is an increase of 23.3 pe...
Agriculture Sector Allocation under Rashtriya Krishi Vikas Yojana (RKVY)  increased from` 6,755 crore to ` 7,860 crore. ...
Health Plan allocations for health stepped-up by 20 per cent. Scope of Rashtriya Swasthya Bima Yojana to be expanded to ...
Banking The insurance legislation, if successfully passed in parliament, would  increase the FDI limit to 49 percent from...
Impacts on SectorsMonday, November 14,                            282011
SECTORS                         EFFECTS    JUSTIFICATIONDefence                         Positive   The Union Budget 2010  ...
Education                        Positive   It has allowed rs 1900                                            cores by the...
ConclusionMonday, November 14,                              312011
Thank You…Monday, November 14, 2011   32
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  1. 1. WEL COME TO BEC-DOMS BAGALKOT Monday, November 14, 1 2011
  2. 2. INDIAN CENTRAL BUDGET 2011-12 Monday, November 14, 2011 2
  3. 3. CONTENTS Introduction Budget Estimation Key Features Taxation Subsidies Types of Sectors Impacts ConclusionMonday, November 14, 32011
  4. 4. INTRODUCTION Budget is plan for income and expenditure over a future periodwhich is supposed to achieve stated objectives - in a governmentscase raising taxes and other revenue and spending to provide servicessuch as defense, education or social security etc... The Union Budget of India for 2011-2012 was present byPranab Mukherjee the finance Minister of India on 28th February,2011. This budgetary proposals would be applicable from 1st April2011 to 31st March 2012.Monday, November 14, 2011 4
  5. 5. 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 . Monday, November 14, 5 2011
  6. 6. 2010-11 (Revised estimates) 2011-12 (Budget Estimates) Sector Share(%) in Total Central Government Sector Share(%) in Total Central Government Budget Allocations , 2010-11(RE) Budget Allocations , 2011-12 (BE) Total Agri Total Agri Total 1.9 Total 2.0 Others Defence Defence Others 20.7 16.1 15.6 22.2 24.2% (Transfer to 28 % Transfers to Social States/UTsSocial States & UTs) SectorSector 20.4 72 % Interest 20.4 75.8 % ( Interest Payments + Others) Payments + Others) Total Total Total Total Finance Industry(He Finance Industry 36.1 avy+Small) 36.8 (Heavy+Sm Total Home 0.2 Total Home all), 0.2 3.4 3.9 Monday, November 14, 6 2011
  7. 7. Key Features of Budget 2011-12OPPORTUNITIES 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. Monday, November 14, 7 2011
  8. 8. 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. Monday, November 14, 8 2011
  9. 9. -Printers -Paper- -Soap Dearer -Steel -Diapers & Sanitary napkins -Legal Services -Homoeopathic Medicines -Healthcare in -Yarn/raw silk top – end Pvt. -Mobile Phones hospitals. -Agarbatti -Solar Lantern, -Branded Cloths LED Lights -Battery Driven- -Gold Vehicles -Agriculture -A/c restaurants machinery serving Liquor Cheaper -Hotel Services Monday, November 14, 2011 9
  10. 10. TaxationMonday, November 14, 102011
  11. 11. 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 2011 Monday, November 14, bonds proposed to be extended for one more year 11
  12. 12. Contd…. 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. Monday, November 14, 2011 12
  13. 13. 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. Monday, November 14, 13 2011
  14. 14. 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 Monday, Rs 11,500 crore and those related to Indirect Taxes of November 14, estimated to result in net revenue gain of Rs 11,300 crore. 14 2011
  15. 15. Personal TaxationFor Men:Current Slabs (`) Proposed Slabs (`) Basic rate of taxUpto 1,60,000 Upto1,80,000 Nil1,60,001 to 5.00,000 1,80,001 to 5,00,000 10%5,00,001 to 8,00,000 5,00,001 to 8,00,000 20%Above 8,00,001 Above 8,00,001 30% Monday, November 14, 2011 15
  16. 16. For WOMENNo change in tax StructureCurrent Slabs (`) Proposed Slabs (`) Basic rate of taxUpto 1,90,000 Upto 1,90,000 Nil1,90,001 to 5,00,000 1,90,001 to 5,00,000 10%500,001to800,000 5,00,001 to 8,00,000 20%Above 8,00,000 Above 8,00,000 30% Monday, November 14, 2011 16
  17. 17. o Age for eligibility reduced from 65 years to 60 Years Current Slabs (`) Proposed Slabs (`) Basic rate of tax Upto 2,40,000 Upto 2,50,000 Nil 2,40,001 to 5,00,000 2,50,001 to 5,00,000 10% 5,00,001 to 8,00,000 5,00,001 to 8,00,000 20% Above 8,00,001 Above 8,00,001 30% Monday, November 14, 17 2011
  18. 18. For Senior Citizen (80years & above)Hike in exemption limit to ` 5 lakh will result on big gainsCurrent Slabs (`) Proposed Slabs (`) Basic rate of taxUpto 2,40,000 Upto 5,00,000 Nil2,40,001 to 5,00,000 - 10%500,001 to 8,00,000 5,00,001 to 8,00,000 20%Above 8,00,001 Above 8,00,001 30% Monday, November 14, 18 2011
  19. 19. SUBSIDIESo Food subsidy bill in 2011-12 seen at 605.7 billion rupeeso Revised food subsidy bill for 2010-11 at 606 billion rupeeso Fertiliser subsidy bill in 2011-12 seen at 500 billion rupeeso Revised fertiliser subsidy bill for 2010-11 at 550 billion rupeeso Petroleum subsidy bill in 2011-12 seen at 236.4 billion rupeeso Revised petroleum subsidy bill in 2010-11 at 384 billion rupeeso State-run oil retailers to be provided with 200 billion rupee cash subsidy in 2011-12 Monday, November 14, 19 2011
  20. 20. Types of SectorsDefenceEducationRural DevelopmentInfrastructure & IndustryAgricultureHealthBankingMonday, November 14, 202011
  21. 21. Defence 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. Monday, November 14, 21 2011
  22. 22. 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. Monday, November 14, 22 2011
  23. 23. Rural Development 12 percent increase in the departments 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. Monday, November 14, 2011 23
  24. 24. 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. Monday, November 14, 24 2011
  25. 25. Agriculture Sector 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. 25
  26. 26. 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 Monday, November 14, 26 2011
  27. 27. 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 Monday, November 14, 27 2011
  28. 28. Impacts on SectorsMonday, November 14, 282011
  29. 29. 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) Monday, November 14, 2011 launched by the Govt. 29
  30. 30. Education Positive It has allowed rs 1900 cores by the Government to IT sector for unique identity project.Infrastructure & Positive Much important given toIndustry 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 Monday, November 14, 30 2011
  31. 31. ConclusionMonday, November 14, 312011
  32. 32. Thank You…Monday, November 14, 2011 32
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