Finance Minister Pranab Mukherjee today 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.
Below are the key highlights of Union Budget 2012:
Approach to the Budget:
1. GDP is estimated to grow by 6.9% in 2011-12, after having grown at 8.4% in preceding two years.
2. Key reasons for the interruption of Indian economy: euro zone crisis, economy, political turmoil in Middle East and rise in crude oil price.
3. Growth moderated due to tight monetary policy.
4. Economy is turning around as core sectors and manufacturing show signs of recovery.
5. At this juncture, hard decision is needed to improve macroeconomic environment and strengthen domestic growth drivers.
6. Twelfth Five Year Plan to be launched with the aim of “faster, sustainable and
Overview of the economy:
1. GDP growth estimated at 6.9% in real terms in 2011-12.
2. Headline inflation expected to moderate further in next few months and remain stable thereafter.
3. Current account deficit at 3.6% of GDP for 2011-12.
4. Deterioration in fiscal balance in 2011-12 due to slippages in direct tax revenue
6. India’s GDP growth in 2012-13 expected to be 7.6% +/- 0.25%.
7. Fiscal deficit for 2012-13 pegged at Rs 5,13,590 crore, which is 5.1 per cent of GDP.
1. Efforts to keep central subsidies under 2% of GDP in 2012-13. Over next 3 year, to be further brought down to 1.75%.
3. A mobile-based fertilizer management system (recommended by the task force headed by Nandan Nilekani) has been designed to provide end-to-end information on movement of fertilisers and subsidies. Nation-wide roll out during 2012.
1. Direct Tax Code (DTC) Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee.
For 2012-13, Rs 30,000 crore to be raised through disinvestment.
Foreign Direct Investment:
1. Efforts are on to arrive at a broad-based consensus to allow FDI in multi-brand retail upto
1. Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000.
1. 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.
1. Rs 15,888 crore capital support proposed to public sector banks and financial institutions.
2. Official amendment to “The Pension Fund Regulatory and Development Authority Bill, 2011”, “The Banking Laws (Amendment) Bill, 2011” and “The Insurance Law (Amendment) Bill, 2008” to be moved in this Budget session.
Infrastructure and Industrial Development:
1. 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.
Power and Coal:
3. Indirect taxes estimated to result in net revenue gain of `45,940 crore.
2. 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.
1. Various proposals to address the shortage of housing for low income groups in major cities and towns including allowing ECB for low cost housing projects and setting up of a credit guarantee trust fund .
1. To ensure better flow of credit to students, a Credit Guarantee Fund proposed to be set up.
1. Out of 73,000 identified habitations that were to be covered under “Swabhimaan”campaign by March, 2012, about 70,000 habitations have been covered. Rest likely to be covered by March 31, 2012.
To read the full report click here
To read the full report click here
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