Union Budget 2012-13 was presented by Finance Minister Pranab Mukherjee on March 16, 2012. Key highlights include GDP growth estimated at 6.9% for 2011-12 and projected at 7.6% for 2012-13. The fiscal deficit target for 2012-13 was set at 5.1% of GDP. To reduce subsidies to less than 2% of GDP by 2012-13 and 1.75% in the following 3 years. Tax exemptions were increased and income and excise tax rates were adjusted. Infrastructure investment was emphasized through tax free bonds and credit enhancement.

1. Union Budget 2012-13
Key Highlights
…A Road to
Recovery
Presentation by
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3. Presented on 16 Mar 2012 th
Finance Minister Shri “Pranab
Mukherjee” Presented Union
Budget 2012, the 81st Budget in
India's history. Individually, this is
Mukherjee's seventh annual Budget,
Second-highest by any Finance
Minister.
Applicable from 1st April 2012

4. Approach to the Budget
• GDP is estimated to grow by 6.9% in 2011-12, after
having grown at 8.4% in preceding two years.
• Key reasons for the interruption of Indian economy:
euro zone crisis, economy, political turmoil in Middle
East and rise in crude oil price.
• Growth moderated due to tight monetary policy.
• Economy is turning around as core sectors and
manufacturing show signs of recovery.
• Twelfth Five Year Plan to be launched with the aim of
"faster, sustainable and more inclusive growth".

5. Overview of Indian Economy
• GDP growth estimated at 6.9% in 2011-12.
• Current account deficit at 3.6% of GDP for
2011-12.
• Deterioration in fiscal balance in 2011-12 due to
slippages in direct tax revenue and increased
subsidies.
• India's GDP growth in 2012-13 expected to be
7.6% +/- 0.25%.
• Fiscal deficit for 2012-13 pegged at Rs 5,13,590
crore, which is 5.1 per cent of GDP.

6. Subsidies and FDI
Subsidies
• Efforts to keep central subsidies under 2% of GDP in
2012-13. Over next 3 year, to be further brought down to
1.75%.
• Subsidies related to administering the Food Security Act
will be fully provided for.
Disinvestment Policy:
• For 2012-13, Rs 30,000 crore to be raised through
disinvestment.
Foreign Direct Investment:
• Efforts are on to arrive at a broad-based consensus to allow
FDI in multi-brand retail upto 51%.

7. Finance and Infrastructure
Financial Sector:
• Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of
50% to new retail investors (whose annual income is below Rs 10 lakh),
who invest upto Rs 50,000 directly in equities. The scheme will have a
lock-in period of 3 years.
Infrastructure and Industrial Development:
• During 12th Five Year Plan period, investment in infrastructure to go up to
Rs 50 lakh crore, half of which is expected from private sector.
• Tax free bonds of Rs 60,000 crore to be allowed for financing
infrastructure projects in 2012-13. It was Rs 30,000 cr in 2011-12.
• IIFCL has put in place a structure for credit enhancement and take-out
finance for easing access of credit to infrastructure projects.

8. Direct and Indirect Taxes
Direct Taxes:
• Exemption limit for the general category of individual taxpayers proposed
to be enhanced from Rs 1,80,000 to Rs 2,00,000.
• Upper limit of 20% tax slab proposed to be raised from Rs 8 lakh to Rs 10
lakh.
• Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for
interest from savings bank accounts.
• Senior citizens not having income from business proposed to be exempted
from payment of advance tax.
Indirect Taxes:
• Standard rate of excise duty to be raised from 10% to 12%, merit rate from
5% to 6% and the lower merit rate from 1% to 2% with few exemptions.
Excise duty on large cars also proposed to be enhanced.
• Indirect taxes estimated to result in net revenue gain of 45,940 crore

9. Education and Security
Education:
• To ensure better flow of credit to students, a Credit
Guarantee Fund proposed to be set up.
• For 2012-13, Rs 25,555 crore provided for RTE-SSA
representing an increase of 21.7% over 2011-12.
Security
• A provision of 1,93,407 crore made for Defence
services including 79,579 crore for capital expenditure.
Any further requirement to be met.
• 3,280 crore proposed to be allocated for construction
of office building of Central Armed Police Forces.

10. Budget Estimates 2012-13
• Gross Tax Receipts estimated at 10,77,612 crore.
• Net Tax to Centre estimated at 7,71,071 crore.
• Non-tax Revenue Receipts estimated at 1,64,614 crore.
• Non-debt Capital Receipts estimated at 41,650 crore.
• Total expenditure for 2012-13 budgeted at 14,90,925 crore.
• Fiscal deficit at 5.9% of GDP in RE 2011-12.
• Fiscal deficit at 5.1% of GDP in BE 2012-13.
• Central Government debt at 45.5% of GDP in 2012-13 as
compared to Thirteenth Finance Commission target of 50.5
per cent.
• Effective Revenue Deficit to be 1.8% of GDP in 2012-13.

11. More Details on Budget
Civil Aviation:
• Tax concessions proposed for parts of aircraft and testing
equipment for third party maintenance, repair and
overhaul of civilian aircraft.
• External Commercial Borrowing (ECB) to be permitted for
working capital requirement of airline industry for a period
of one year, subject to a total ceiling of US $ 1 billion.
Power and Coal:
• Coal India advised to sign fuel supply agreements with
power plants,having long-term power purchase agreements
with DISCOMs and getting commissioned on or before
March 31, 2015.

12. Governance and Employment
UID-Aadhaar
• n Enrolment of 20 crore persons completed under UID mission.
Adequate funds to
• be allocated to complete enrolment of another 40 crore persons.
Employment And Skill Development
• Allocation of `3915 crore made for National Rural Livelihood
Missionrepresenting an increase of 34 per cent.
• Allocation for Prime Minister’s Employment Generation Programme
increased by 23 per cent to `1,276 crore in 2012-13.
Skill Development
• Projects approved by National Skill Development Corporation
expected to train 6.2 crore persons at the end of 10 years.
• 1,000 cr allocated for National Skill Development Fund in 2012-13.

13. Health and Social Security
HEALTH
• No new case of polio reported in last one year.
• Allocation for NRHM proposed to be increased from `18,115 crore in
2011-12 to `20,822 crore in 2012-13.
• Pradhan Mantri Swasthya Suraksha Yojana being expanded to cover
upgradation 7 more Government medical colleges.
Social Security And The Needs Of Weaker Sections
• Allocation under NSAP raised by 37 per cent to `8,447 crore in 2012-13.
• In the ongoing Indira Gandhi National Widow Pension Scheme and Indira
Gandhi National Disability Pension Scheme for BPL beneficiaries, pension
amount to be raised from `200 to `300 per month.
• Lump sum grant on the death of primary breadwinner of a BPL family, in
the age group 18-64 years, doubled to `20,000.

14. Agriculture
Agriculture
• Plan Outlay for Department of Agriculture and Co-operation
increased by 18%.
• Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to `9,217
crore in 2012-13.
• Initiative of Bringing Green Revolution to Eastern India (BGREI) has
Resulted in increased production and productivity of paddy.
Allocation for the scheme increased to 1,000 cr in 2012-13 from 400
cr in 2011-12.
Agriculture Credit
• n Target for agricultural credit raised by `1,00,000 crore to `5,75,000
crore in 2012-13.
• Kisan Credit Card (KCC) Scheme to be modified to make KCC a smart
card which could be used at ATMs.

15. For a Common Man
Benefits/Advantage
• Get bit more of salary due to change in Income Tax Slab, No tax on Interest
till 10000, No Tax for unemployed Senior Citizen.
• Low cost and Free education
• More Benefits and low tax for Agriculture
Disadvantage
• Pay more for all consumer goods like Mobile, Computer, Laptop, AC,
Washing machine, Fridge, TV etc
• Pay more for Oils and fuels due to reduced Subsidy
• Pay more for Excise duty and Service Tax i.e. Pay more in restaurants,
gyms, travel, tour, other all service
• Pay high for Cars and SUV

16. Logon to http://indiabudget.nic.in for more details
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