The budget document provides details on key fiscal highlights including a GDP growth target of 9% and a fiscal deficit target of 4.6% of GDP. It outlines plans to lower the corporate tax surcharge and increase exemptions for individual taxpayers, as well as changes to indirect taxes that will make some consumer goods cheaper and some services more expensive. Key areas that are positively impacted include infrastructure, where allocation was increased 23%, and education, where allocation rose 24%. However, some questions remain about whether the targets can be achieved and if enough is being done to support farmers and alleviate rural issues.

3. Fiscal deficit

4. 4.6% of GDP (better than 4.8% set in roadmap L/Y); positive for bond markets.

5. Target looks aggressive given absence of non-tax revenues (3G booty) this year & underestimation of subsidies.

6. Target to reach 4.1% in 2012-13 and 3.5% in 2013-14 welcome.

7. Effective Revenue Deficit – 1.8% of GDP; persistent Revenue Deficit a concern.

8. Net market borrowings

9. Rs 3.43 lakh crore.

10. Lower than estimates; positive for bond markets. Budget 2011 like the India England One-day result A TIE BETWEEN GROWTH & INFLATION BUT NOBODY WINS!!!

12. Exemption limit raised to Rs 1.8 lakh from Rs 1.6 lakh; with inflation at over 10% , hardly any increase in real terms.

13. Exemption limit for senior citizens - raised to Rs 2.5 lakh from Rs 2.4 lakh.

14. Age to qualify as “senior citizen” reduced to 60 from 65.

15. “Very Senior Citizens” (80 years +) - exempt upto Rs 5 lakh.

16. Salaried taxpayers not required to file return of income if tax discharged by way of TDS.

17. Corporate taxes

18. Surcharge reduced from 7.5% to 5%.

19. MAT increased marginally from 18% to 18.5%.

20. SEZ units & developers to be subject to MAT; will hit infra companies.

21. LLPs to be subject to MAT; negative for LLPsPositive for corporates; not much for the aam aadmi

23. Environmental concern - Fuel cell, hydrogen cell technology, hybrid vehicles granted concessions.

24. Branded garments to get expensive – excise duty @ 10%.

25. Consumer goods such as sanitary napkins, diapers to get cheaper – excise reduced from 10% to 1%.

26. Efforts to incentivize agriculture by reducing duties:

27. No excise on air-conditioning equipment, refrigeration panels used in cold chains.

28. No excise on equipment used in cold storages, mandis and warehouses.

29. Customs duty on micro-irrigation equipment reduced from 7.5% to 5%.

31. Capital goods used in ultra mega power projects exempted from excise duty.

32. Customs duty on Solar lanterns reduced from 10% to 5%.

34. More services brought within the tax net

35. Hotel rooms with tariff exceeding Rs 1,000 per day – 5%

36. Air-conditioned restaurants serving liquor – 3%

37. Healthcare to get expensive (Govt hospitals exempted)

38. Centrally air-conditioned hospitals with 25 or more beds - 5%

39. Diagnostic tests of all kinds – 5%

40. Air travel to be dearer

41. Domestic air travel (higher class) – 10%

42. Domestic air travel (economy class) – Rs 50

44. 3 fold increase to Rs 1,000 crore for building judicial infrastructure & E-Courts.

45. Financial sector legal reforms – Amendment of the following laws:

46. Insurance Act - to increase FDI limit to 49%.

47. Pension Fund Regulatory & Development Authority Act.

48. SBI (Subsidiary Banks) Act – for merger with SBI.

49. Other Banking Laws – including additional banking licenses to private sector.

50. SARFAESI Act.

52. Legal reforms promised for years, but no political support for the passage of laws.Mere announcements; will the Government be able to walk the talk?

54. Will subsidies be contained within budgeted levels?

56. Sectoral overview

58. FII Investment in corporate bonds in infra sector raised to 40 billion USD.

59. To attract foreign funding for infrastructure, infra debt funds to be notified, with attractive TDS rate of 5%. Income of Fund exempt from tax.

60. Tax free bonds of Rs 30,000 crore for infra development.

61. Infra bonds eligible for tax rebate for individuals upto Rs 20,000.

62. Rural Infra Development Fund – corpus increased to Rs 18,000 crore from Rs 16,000 crore.

63. Viability gap funding for capital investment in setting up of storage capacity.

64. Infra status for cold chains and post-harvest storage facility.

67. Allocation for 6 schemes of “Bharat Nirman” increased to Rs 58,000 crore (increased by Rs 10,000 crore).

68. Direct transfer of cash for LPG, kerosene and fertilizer subsidy, eliminating leakages; expected to be in place by March 2012.

69. 10 lakh per day Aadhar numbers to be rolled out by October 2011, streamlining the delivery mechanism.

70. Wages indexed to CPI-AL under the MGNREGA.

71. Pay for Aanganwadi workers doubled, albeit from an extremely low base.

72. Pension rules relaxed for unorganized workers / BPL beneficiaries.

73. India Microfinance Equity Fund of Rs 100 crore - for equity contribution to smaller MFIs.

74. Boost to low cost housing through favourable financing.Not much for the aam aadmi; unless if the delivery mechanism starts functioning. May induce some consumption, with marginally higher budgetary allocations.

76. Food grain : 6.5% (232 million tonnes)

77. Oil seed :11.9%

78. Cotton : 4.2%

79. Sugarcane : 15.2% (24 million tonnes)

80. Fruits : 4.1%

81. Vegetables : 3.8%

82. Total farm credit given to farmers till September – Rs. 194,392 crore

83. Period of repayment of loan extended by 6 months

86. Govt. will look to include urea in nutrient based subsidy.

87. Basic customs duty reduced from 5% to 2.5% for agricultural machinery; Positive for organizations such as IFFCO.

88. To increase fertilizer production and cold storage production capacity in the country, infrastructure status granted for capital investment in fertilizer production and for cold chains and post-harvest storage facility.

90. An increase in interest rate subvention from 2% to 3%, if loan is repaid on time. It will bring down effective interest rate to 4%. But at the same time, there are no provisions for drought relief.

92. Why farm loan limit through Kisan credit card remains same, ie Rs. 300,000 despite inflation being around 10%?

93. While additional interest subvention is welcome, however, if the farmer delays loan repayment even by 1 day (after six months grace period), he has to pay double interest, ie 14%.

94. In Budget speech, FM endorsed that soilfertility has decreased through the use of chemical fertilizers. He proposed steps to increase organic agriculture in the country. But in the same speech, he talked about giving subsidy to chemical fertilizers and exemption from tax for any investment in chemical fertilizer sector.

95. In India, more than 60% farmland irrigated by rain water. Sufficient steps have not been taken to ameliorate the situation.

96. One funny but good argument given by a Kisan – While a car loan is cheaper than a tractor loan…… he has nothing to do with the car on his farm. Mildly positive for Agriculture but negative for Kisan.

97. FMCG Measures could increase consumption, though marginally!!!

98. FMCG

99. Education Figures in Rs crore

101. A revised Centrally Sponsored Scheme “Vocationalisation of Secondary Education” to improve the employability of youth.

102. Special emphasis on areas such as Skill Development and the National Knowledge Network that is critical for India to be a global leader in the 21stcentury.

103. National Knowledge Network initiative shows the government’s preference to reach quality education to the students irrespective of their geographical location.

104. With the increase in the Sarva Shiksha Abhiyan budget by 40% to Rs 21,000 crore, there should be a much larger role for the private sector in K-12 and Teacher Training space built around the PPP (public private partnership) model.

106. Govt. has not given any emphasis on private sector participation.

108. Excise duty on LED reduced to 5% but the change in taxes on LED unlikely to affect the end consumer much.

110. There was also a demand for tax concessions to animation, gaming and VFX, which is a booming segment.

114. No provision for the Food Security Bill (estimated provision required Rs 11,000 crore – Rs 15,000 crore, if the Bill goes through).

116. Reduction of duties on petro products; negative for Oil Marketing Companies.

117. No announcement on multi-brand retail.

118. No announcement on the date for implementation of the IFRS.

119. No reversal of excise stimulus ; positive for auto companies.

120. STPI Scheme extension ; a big let down for the IT industry.

121. Increase in customs duty on gold & silver ; positive for jewellery companies.