The document analyzes economic surveys and union budgets from 2010-2013, noting planned and non-planned expenditures that increased annually by 15-18% on average. Key sectors like infrastructure, capital goods, and pharmaceuticals saw positive impacts from budget allocations, while others like automobiles, FMCG and oil/gas saw neutral or negative impacts. The conclusion is that the 2012-2013 budget focused more on fiscal deficits than growth, but assumptions depend on world economic conditions and oil prices.

1. Economic Survey and Union
Budget Analysis
By Gaurav Tuli

2. Content
• Introduction
• Union Budget Analysis
• Expenditure Comparison
• Deficits and Policies Compared
• Budget Impacts
• Where is The Economy Headed ?
• Conclusion

3. Introduction
• Budget :- The most extensive account of the
Government`s finances, in which revenues
from all sources and expenses of all activities
undertaken are aggregated. It comprises the
revenue budget and the capital budget. It also
contains estimates for the next fiscal year
called budgeted estimates.

5. • 2010-11
 Growth Rate of GDP was slated at 8.6%
 Agriculture at 5.4%
 Manufacturing and Services at 8.6%
 Exports and Imports rose at 29.5% and 19% respectively
 Food Inflation, Higher Prices and Volatile Global Markets
were of concern
 Investments and Savings saw a rise in 2009-10
 In Comparison to Last Year -Trade Gap Narrowed to US $
82.01 bn and BOP Improved in the year therefore – FD
and PD
 Survey advised on development of schemes to address
poverty issues and unemployment

6. • 2011-12
 Growth Rate of GDP was slated at 6.7% due to
slowdown of industrial growth
 Agriculture at 2.5% estimated
 Manufacturing and Services at 9.4%(58% to GDP)
 Exports rose at 40% initially but then decelerated
 Food Inflation, Higher Prices saw slowdown due to
tight monetary policy by RBI
 Investments slowed down, Savings were stable
 BOP Widened in the year to $32.8 Billion
 Sustainable development and climate change are
becoming central areas of global concern

7. • 2012-13
 Growth Rate of GDP was slated at 6.9% but would
pick up to 7.6%
 Agriculture at 2.5% estimated yet agai
 Manufacturing and Services at 9.4%(59% to GDP)
 Industrial Growth Pegged at 4-5%
 Exports rose at 40.5% and Imports at 30.5%
 Inflation definitely slowing down which will improve
economic growth
 Central spending on social services goes up to 18.5%
this fiscal
 Sustainable development and climate change
concerns on high priority

9. Planned
Year Planned Expenditure (in Rs. 00 Crore) Increase %
2010-11 3,73,092 15%
2011-12 4,41,368 18.30%
2012-13 5,21,025 18%
2010-2011:- The government sought to increase payloads on R&D, India was having a
progressive outlook as it was striving to enhance itself on terms on new technology
2011-2012:- Defense was the main front to improve upon for this year as a major chunk
of the budget increase where allocation of funds were Rs. 69,199 crore for Defense in
terms of capital expenditure
2012-2013:- As the budget allocated, was met at almost 99 percent in the 11th Plan, the
government has estimated an 18% again. 15 % higher than approach to 12th Plan

10. Non-Planned
Year Non-Planned Expenditure (in Rs. 00 Crore) Increase %
2010-11 7,35,657 6%
2011-12 8,15,844 10.90%
2012-13 9,69,900 15.89%
2010-2011:- Due to the 34% rise of non-plan expenditure, this year attributed to a
marginal increase as the majority of funds were allocated last year
2011-2012:- XI Plan expenditure more than 100 per cent in nominal terms than
envisaged for the Plan period. Also parts of the funds were transferred to State UT’s
2012-2013:- Estimates are based on agri-extension services and skill development

12. Year 2010-11 2011-12 2012-2013
Gross Tax
Receipts 7,46,651 9,32,440 10,77,612
Non Tax
Revenue
Receipts 1,48,118 1,25,435 1,64,614
3,66,152 (5.1% of 3,95,444(5.9% of 3,66,152(5.1%
Fiscal Deficit GDP) GDP) of GDP)
Net Market
Borrowing 3,45,010 3,43,000 4,79,000

13. Fiscal Policy
2010-11
• With recovery taking root, there was a need to review public
spending, to mobilize resources and geared them towards
building the productivity of the economy.
2011-2012
• Fiscal consolidation targets at Centre and States have shown
positive effect on macroeconomic management of the economy
• Structural concerns on inflation management were addressed by
improving supply response of agriculture to the expanding
domestic demand and through stronger fiscal consolidation
2012-2013
• Fiscal policy response is better part of past 2 years aimed at
taming domestic inflationary pressure.
• To maintain a healthy fiscal situation proposal to raise service tax
rate from 10 per cent to 12 per cent.

14. Expenditure Policy
2010-11
• The net tax revenue to the Centre as well as the expenditure
provisions were estimated with reference to the recommendations
of the Thirteenth Finance Commission.
2011-12
• A Committee already set up by Planning Commission to look into
the extent classification of public expenditure between plan, non-
plan, revenue and capital.
2012-13
• Expenditure Policy is optimistic about R&D, Skill Development, and
an improved FRBM act.

16. 2010-11
• Automobiles: The proposal to extend weighted deduction for a period of 5
more years will help auto companies reduce their taxes, while
simultaneously helping them scale up technologies to global standards.
The proposed reduction in customs duty on most chemicals and plastics
from 12.5% to 7.5% will help marginally reduce raw materials costs.
• IT: Companies that benefit from tax exemption under the provisions of the
Income-Tax Act will have to pay an effective minimum alternate tax.
Employee stock options will be included for calculating the Fringe Benefit
tax (FBT).
• Infrastructure: Construction- Benefits of Section 80IA may not be available
to construction companies. Development of roadways, dedicated freight
corridors and ports to enhance efficiencies and lower costs
• Pharma: Extension of the 150% weighted average deduction on R&D
expenditure until FY07 to Be extended by another 5 years. Service tax
exemption on clinical trials of new drugs
• Capital Goods : More Incentives to Rapid Power Expansion

17. 2011-12
• Automobile: Positive for the Automobile sector ,central excise duty kept
unchanged. Special incentives were announced for companies manufacturing
hybrid vehicles in India.
• IT: It was low key affair for the Software Sector. The Budget did not mention
extension of fiscal benefits under the STPI Scheme for Export of Software
Services, which is due to expire in FY2011. Plan allocation for School Education
increased by 24% this would boost business opportunities for the IT-Education
companies
• Infrastructure: It was continued to lay stress on infrastructure development, as the
allocation for the sector has been increased by 23%
• Metals & Mining: Export duty on export of iron ore has been raised to ad valorem
20% on lumps as well as fines. Negative news for iron ore exporters .No imposition
of mining tax is a positive for mining companies as well as steel companies with
captive mines.
• Pharma: The Budget is neutral for the pharmaceutical sector. Allocation to
Ministry of Health & Family Welfare have been increased by 20%
only, Disappointment prevailed for the Pharma companies actively involved in R&D
activities. There were no indications on the extension of the EOU benefit which
was available only till FY2011.
• Capital Goods: The Budget 2011-12, though it did not have many significant direct
measures for the Capital Goods sector, it sent a positive signal with regards to the
continued impetus being provided to the Infrastructure and Power Sector of the
country.

19. • This year’s budget is more focused on reducing
fiscal deficits. (2012-13)
• Government intends to recovers the demand
driven growth, private investments, and fighting
against corruption.
• Government has to make a growth balance
among Services and Agriculture Industrial Sector.
• Service sector taxes have as it’s the major
revenue contributor. This might cause a slight
slowdown in service sector.
• However, all of these assumptions are dependent
to world economy and oil price. In my opinion
this year budget is a fiscal remedy budget rather
than a real growth stimulating budget.

20. Sector Budget Impact
Agriculture Positive
Automobile Negative
Aviation Neutral
Banking Positive
Capital Goods Positive
Cement Positive
FMCG Negative
Infrastructure Positive
IT Neutral
Metal Neutral
Oil and Gas Negative
Pharmaceutical Positive
Power Positive
Real Estate Neutral