Budget 2012 2013


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Budget 2012 2013

  1. 1. Group 5 Abhishek Kumar Apurv Jain B Sri Harsha Hema KoppalaShaurya Vikram Singh
  2. 2. History• Derived from French word ‘Bougette’ meaning “Sack or Pouch”• Present sense of the term was used for the first time in 1873• 1921, Separation of Railway budget from General Budget on the recommendation of Acworth Committee.• First Budget presented in 26th November 1947 by finance minister Sir R K Shanmugam Chetty
  3. 3. Formulation Process• Aug-Sept: – The budget division of MOF issues an annual budget circular – It contains detailed instructions for the Union government ministries/departments to provide budget estimates
  4. 4. • Nov-Dec: – Scrutiny & Consolidation of estimates by Departments & Ministries – Scrutiny by Finance Ministry , settlement of disputes via meetings
  5. 5. • Jan-Feb: – Final round of meetings held – For the first time these meetings are chaired by the Union Finance Minister – Consolidation by the Finance Ministry preparation of estimates of revenue – Formulation of the draft
  6. 6. Union Budget 2012-2013“I mu e cr el e kind”  - Pr anab Mukher j ee , Union Finance st b u  to b Minist er while quot ing f r om Shakespear e s
  7. 7. Expectations and Speculations• The service tax and excise tax are likely to be increased• Central government may incentivize the pharma sector.• Union Finance Minister Mr. Pranab Mukherjee should introduce new polices to push the entrepreneurs for more investment.• It might increase the income tax from Rs 1.8 lakh to Rs 3 lakh .
  8. 8. • There is reduction from the existing 4% of the crop loan to 3%• Jewellery exporters asked for some changes in tax• HSBC reports government may target keeping deficit below 5%• For natural gas across the states taxes may reduce• Urea pricing may have no change• Tax reduction in some hospital imports• Tax rates for cement, steel, metals etc may reduce
  9. 9. • New measures for infrastructure that will attract foreign capital.• Government will be planned to announce a clear roadmap of divestment process for the next five years due to the failure of the attempt in raising money through divestment according to past years• It is expected that the government can fetch 0.5% of GDP through 3G auction of licenses due to the recent cancellation of 2G licenses• Micro, small and medium enterprises in India may get help
  10. 10. Budget 2012-2013• Finance Minister, Mr. Pranab Mukherjee presented the Union Budget for the year 2012- 13, his seventh, on 16th March 2012• At the very beginning of his speech Mr Mukherjee said that a “year of recovery interrupted” meant that it was time to take tough decisions• The idea ahead of the budget was that fiscal deficit needed to be controlled by cutting subsidies and raising taxes
  11. 11. Highlights• Income tax exemption limit raised to Rs.2 lakh to provide relief of Rs.2,000 for all assessees• 20 per cent tax on income over Rs.10 lakh, up from Rs.8 lakh• Deduction of up to Rs.10,000 from interest from savings bank accounts.• Defence to get Rs.1.93 lakh crore during 2012- 13.• Service tax rate raised from 10 per cent to 12 per cent to bring in Rs.18,660 crore.
  12. 12. • National Skill Development Fund allocated Rs.1,000 crore.• Four thousand residential quarters to be constructed for paramilitary forces with an allocation of Rs.1,185 crore.• National Population Register to be completed in two years.• Cinema industry exempted from service tax.• Branded silver jewellery fully exempt from excise duty.
  13. 13. • Customs duty on warning systems/track upgrade equipment for railways reduced from 10 per cent to 7.5 per cent.• Import duty on equipment for iron ore mining reduced from 7.5 to 2.5 per cent.• Allocation of Rs.200 crore for research on climate change.• Integrated Child Development Scheme to be strengthened and restructured with allocation of Rs.15,850 crore.• Allocation of Rs.14,000 crore for rural water supply and sanitation.
  14. 14. • Infusion of Rs.15,888 crore in public sector banks, regional rural banks and NABARD in 2012-13.• Infrastructure will require Rs.50 lakh crore in 12th Plan, half of this from the private sector.• Completion of highway projects 44 per cent higher than in previous fiscal.• External commercial borrowing of up to $1 billion permitted for airline sector.• Hope to raise Rs.30,000 crore from disinvestments.
  15. 15. • Excise duty raised from 10 to 12 per cent.• Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13.• Growth estimated at 7.6 per cent; expect inflation to be lower.
  16. 16. Reaction of Stock Market• The day began with a high of 17,871• Sensex fell 209.65 points(1.19%) and closed at 17,466.20• Different Perspectives: 1. THT-a lack of incentives for private sector capital investment 2. TFE-the fall is an opposite reaction ,the budget had positive aspects but market continued to fall 3. TOI-the proposals to raise tax dampened the sentiments of the domestic firms 4. TBS-the finance minister seems to have failed at capping the fiscal deficit.
  17. 17. Sector-Wise Analysis
  18. 18. Automobile - NeutralBudget Proposals Comments
  19. 19. Cement - PositiveBudget Proposals Comments
  20. 20. Fertilizers - PositiveBudget Proposals Comments
  21. 21. FMCG - PositiveBudget Proposals Comments
  22. 22. Infrastructure - PositiveBudget Proposals Comments
  23. 23. IT Sector - NeutralBudget Proposals Comments
  24. 24. Media & Ent. - NeutralBudget Proposals Comments
  25. 25. Metals & Mining - PositiveBudget Proposals Comments
  26. 26. Midcaps - PositiveBudget Proposals Comments
  27. 27. Oil & Gas - NeutralBudget Proposals Comments
  28. 28. Pharma Sector - NegativeBudget Proposals Comments
  29. 29. Power Utilities - PositiveBudget Proposals Comments
  30. 30. Real Estate - PositiveBudget Proposals Comments
  31. 31. Thank You