2. PANEL DISCUSSION
UNION BUDGET 2011 - 2012
BHAGIRATH Agriculture And Allied Sectors & Introduction
Chayan---Budget Impact On Sectors
Jayati---otherTaxes, Subsidies And Revenues
Aakangsha---income Tax
Riddihima --- Investment On Infrastructure
ZubiaLaeeqh--- Women & Budget Sr. Citizen
Sana Ajani ---Inflation Control
Varsha --- Sops & The Budget On The State Of Governance
Priyama--- Real Estate & Industries
Nandita --- Reforms & Growth
Shruti--- R&d & Budget Practicality
Ujjaini--- Budget Impact On Sectors, NRI Investments,
Fiscal Prudence
Somyudata--- Health & Defence
Sonakshi --- Conclusion
3. AGRICULTURE AND ALLIED SECTORS
- BhagirathAshiya
4. 11thPlan Vision2007-2012
4
Broad Based,Inclusive,Faster Poverty Reduction, Bridgethe
Divide
5. 9 per cent overall Growth, 6. 4.1%growth from Agriculture and
allied sector 7. This implies - Doubling the agricultural growth
achieved during the 9th and 10th Plan,
4
8. Introduction: Agri & allied activities
One of the largest contributors (GDP) almost 17 % of total
Providing needs of society & the raw materials for segments of
Indian industry.
Livelihood for almost two thirds of the work force.
Agriculture to grow @ 5.4 per cent p.a.
5
9. UNION BUDGET 2011-12
The government of India, in latest budget proposal (2011), has
allocated Rs14,744 crore
The focus of most of his initiatives seem to be in strengthening
existing programmes rather than creating new avenues of budgetary
support.
Food inflation FM
RashtriyaKrishiVikasYojana ( RKVY)
Mukherjee has hiked interest rate
National Mission for Protein Supplements
6
10. AGRIALLIED SECTORS
Dairy
Poultry
Fishery
Goat and sheep
Apiculture
Sericulture
7
11. Fishery
India - a major maritime / aquaculture country
third position in fisheries
second in aquaculture
resources, ranging from ocean to cold hill streams
own 10% of fish bio-diversity on the earth
6 % growth in the 11th Five Year Plan feasible.
8
12. Removal of supply bottlenecks in the food sector will be in
focus in 2011-12
Agriculture growth key to development: Green Revolution waiting to
happen in eastern region
Since independence, India has become one of the largest producers
of wheat, edible oil, potato, spices, rubber, tea, fishing, fruits,
and vegetables in the world
9
13. The current storage capacity is 62.8 million tonnes, which is
proving inadequate. India had record rice and wheat stocks of 65.6
million tonnes in its godowns in early June.
10
14. In a country where millions go hungry every day and where food
prices are breaking the back of the common man, a bumper harvest is
rotting in godowns.
11
15. Agriculture not an option
Farmingno longer a livelihood option for youth, and this spells
disaster for the future of our agriculture, since over 70% of the
rural population is below the age of 35.
As a result of all these factors, the growth rate in human numbers
started exceeding agricultural growth rates .
12
16. 13
There is no particular vision and no strategy to make agriculture
an attractive option for youngsters
17. 14
18. JAYATI GOYAL
OTHER TAXESAND SUBSIDIES AND REVENUE
19. INDIRECTTAXES
The custom duty which previously used to prevail at various rates
of 2%, 2.5% and 3% has now been done with and a single rate of 2.5%
is likely to prevail as a uniform rate.
The service tax area has been broadened with an amendment which has
included two other sectors in its purview, namely, services
provided by air-conditioned licensed for serving alcohol beverages
and accommodation provided by hotels, etc., for less than three
months
20. SUBSIDIES
The Finance Minister has fixed a limit of Rs.23,000 crores for the
fuel subsidy which is lesser than the previous year. But with the
crude prices rising to US$120/gallon, this will not be
enough.
Budget 2011-12 proposes to include urea which is the most consumed
fertilizer by volume, under the direct subsidy route under the
Nutrient Based Subsidy (NBS) scheme.
21. ZUBIA LAEEQH
BUDGET FOR WOMEN AND SENIOR CITIZENS
22. BUDGET FOR SENIOR CITIZENS (MEN)
After the big Bang restructuring of the income slabs in the last
BUDGET, finance minister PRANAB MUKHERJEE chose to restrict
additional tax relief to the more vulnerable segments of the
population, mainly the senior citizen & those at the bottom of
the tax pyramid.
For the senior citizens the budget has reduced the qualifying age
from 65years to 60years & increased their exemption limit from
Rupees 2.4 Lakh to Rupees 2.5 Lakh.
23. For those who are 80years and above, it has created a new
category of VERY SENIOR CITIZENS & given a higher exemption
limit of Rupees 5 lakh.
In more sops senior citizens, the government has lowered the age
eligibility for availing benefits through the INDIRA GANDHI
NATIONAL OLD AGE PENSION SCHEME for the poor from 65years to
60years. It has increased the pension amount from Rs.200/- to
Rs.500/- a month for those who are 80years and above.
KAUSHIK MUKHERJEE, Executive Director, Tax & Regulatory
services, PWC India, Contended that the minimum age for very senior
citizen should have been 70years, as that would have given relief
to people who were neither able to invest in pension scheme
introduced during the last decade, nor benefit from the post
millennium economic boom.
24. BUDGET FOR WOMEN
For Women, the finance minister has announced the creation of a
womens SHG (Self help Group) development fund with a corpus of
Rupees 500 crore for small borrowers.
Women were not given any additional relief, perhaps as the direct
taxes code to be implemented next year does away with gender-based
tax exemption.
Females will continue to pay a lower tax to the higher exemption,
but they do not get any benefit in the budget budget & the
difference in the basic exemptions for male & female has
narrowed to Rs.10,000/-
25. TAX SAVING IN 2011-2012
TAX PAYER PROFILE
TAX SAVING
1. Women below 60yearsNIL
2.Men Below 60years
Rs.2,060/-
3.Women above 60years to 65years
Rs.6,180/-
4.Men above 60years to 65years
Rs.9,270/-
5.Senior citizens (65yrs to 79yrs
Rs.1,030/-
6.80years & above (Super seniors)
Rs.26,780/-
26. Priyama
Infrastucture
27. PranabMukherjee, proposed an allocation of Rs.2,14,000 crore
for infrastructure sector, which is 23.3% higher than current year.
This amounts to 48.5% of the Gross Budgetary support to plan
expenditure. In order to give a boost to infrastructure development
in railways, ports, housing and highways development, it has been
proposed to allow tax-free bonds of Rs.30,000 crore to be issued by
various government undertakings in the year 2011-12.
This includes Indian Railway Finance Corporation Rs.10,000 crore;
National Highway Authority of India Rs.10,000 crore; HUDCO Rs.5000
crore and Ports Rs.5000 crore.
28. To attract foreign funds for infrastructure financing, the FM
has proposed to create special vehicles in the form of notified
infrastructure debt funds. Interest payments on the borrowings of
these funds will have a reduced withholding tax rate of 5% instead
of the current rate of 20%, while full exemption of income of the
fund from tax has been proposed.
A higher fund allocation across infrastructure development scheme
Bharat Nirman has been proposed. Allocation to the tune of Rs
58,000 crore has been planned for the scheme, an increase of Rs
10,000 crore from the current year.
29. Full exemption from basic customs duty has been extended to
bio-asphalt, an emerging green technology for the surfacing of
roads, and specified machinery for its application in the
construction of national highways. Tunnel-boring machines required
for the construction of highways are also being included in this
exemption.
The financeministeralsoproposed to raise the corpus of rural
infrastructrure development fund from Rs 16,000 crore to Rs 18,000
crore.
Tax sops in infrastructure investment up to Rs 20,000 has been
extended by a further one year.
30. UJJAINI
FISCAL PRUDENCE
31. INTRODUCTION
At the outset, let me explain, what exactly is fiscal deficit and
how is it relevant.
Whena government's total expenditures exceed the revenue that it
generates (excluding money from borrowings). Deficit differs from
debt, which is an accumulation of yearly deficit
A fiscal deficit is regarded by some as a positive economic event.
For example, economist John Maynard Keynes believed that deficits
help countries climb out of economic recession. On the other hand,
fiscal conservatives feel that governments should avoid deficits in
favor of a balanced budget policy
32. TYPES OF BUDGETARY DEFICITS
The different types of budgetary deficit are explained in following
points :-
1. Revenue Deficit
Revenue Deficit takes place when the revenue expenditure is more
than revenue receipts. The revenue receipts come from direct &
indirect taxes and also by way ofnon-tax revenue.
The revenue expenditure takes place on account of administrative
expenses, interest payment, defence expenditure &
subsidies.
Table below indicate revenue deficit of the central government of
India.
From the above table it is clear that revenue deficit was Rs.
18,562 crores in 1990-91 and Rs. 94,644 crores in 2005-06. As
proportion of GDP, revenue deficit increased from 1.5% in 1980-81
to 3.3% in 1990-91 and declined to 2.7% in 2005-06. The decline is
due to the passing of the Fiscal Responsibility and Budget
Management Act in 2002.
33. 2. Budgetary Deficit
Budgetary Deficit is the difference between all receipts and
expenditure of the government, both revenue andcapital. This
difference is met by the net addition of the treasury bills issued
by theRBIand drawing down of cash balances kept with the RBI. The
budgetary deficit was called deficit financing by the government of
India. This deficit adds to money supply in the economy and,
therefore, it can be a major cause of inflationary rise in
prices.
Budgetary Deficit of central government of India was Rs. 2,576
crores in 1980-81, it went up to Rs. 11,347 crores in 1990-91 to
Rs. 13,184 crores in 1996-97.
The concept of budgetary deficit has lost its significance after
the presentation of the 1997-98 Budget. In this budget, the
practice of ad hoc treasury bills as source of finance for
government was discontinued. Ad hoc treasury bills are issued by
the government and held only by the RBI. They carry a low rate of
interest and fund monetized deficit. These bills were replaced by
ways and means advance. Budgetary deficit has not figured in union
budgets since 1997-98. Since 1997-98, instead of budgetary deficit,
Gross Fiscal Deficit (GFD) became the key indicator.
34. FISCAL
3. Fiscal Deficit
Fiscal Deficit is a difference between total expenditure (both
revenue and capital) and revenue receipts plus certain non-debt
capital receipts like recovery of loans, proceeds from
disinvestment.
In other words, fiscal deficit is equal to budgetary deficit plus
governments market borrowings and liabilities. This concept fully
reflects the indebtedness of
35. the government and throws light on the extent to which the
government has gone beyond its means and the ways in which it has
done so. in 1980-81, fiscal deficit was Rs. 7,733 crores. Between
1980-81 and 1990-91 it increased 5 times to Rs. 37,606 crores.
Since the introduction of economic reforms in 1991-92, the
government has tried to restrict the growth of fiscal deficit. As
percentage of GDP fiscal deficit declined from 6.2% in 2001-02 to
4.1% in 2005-06.
4. Primary Deficit
The fiscal deficit may be decomposed into primary deficit and
interest payment. The primary deficit is obtained by deducting
interest payments from the fiscal deficit. Thus, primary deficit is
equal to fiscal deficit less interest payments. It indicates the
real position of the government finances as it excludes the
interest burden of the loans taken in the past.
Table below indicate primary deficit as a Percentage of GDP.
Primary deficit of the central governent of India was 16,108 crores
in 1990-91, it reduced to 14,591 crores in 2005-06.
36. 4. Primary Deficit
The fiscal deficit may be decomposed into primary deficit and
interest payment. The primary deficit is obtained by deducting
interest payments from the fiscal deficit. Thus, primary deficit is
equal to fiscal deficit less interest payments. It indicates the
real position of the government finances as it excludes the
interest burden of the loans taken in the past.
Table below indicate primary deficit as a Percentage of GDP.
Primary deficit of the central governent of India was 16,108 crores
in 1990-91, it reduced to 14,591 crores in 2005-06.
37. 5. Monetised Deficit
Monetised Deficit is the sum of the net increase in holdings of
treasury bills of the RBI and its contributions to the market
borrowing of the government. It shows the increase in net RBI
credit to the government. It creates equivalent increase in high
powered money or reserve money in the economy.
38. Hence
All these budgetary deficit reveal fiscal imbalance. Fiscal
imbalance & budget deficit result in harmful consequences like
mounting inflation, deficit inbalance of payment, etc. It has also
adversely affect the growth of the economy. The government must
introduce fiscal correction policies to overcome the deficit budget
and fiscal crisis.
39. 20111-2012 fiscal scenario
GDP GROWTH TARGET 9%-025%
FISCAL DEFICIT
4.6% OF GDP WHICH IS A POSITIVE FOR THE BOND MARKETS
THE TARGET LOOKS AGGRESSIVE GIVEN THE ABSENCE OF NON TAX
REVENUES(3G INCOME) THIS YEAR AND UNDERESTIMATED SUBSIDIES
40. TARGET TO REACH 4.1 % IN 2012-2013 AND 3.5 % IN 2013-14
WELCOMEED
FISCAL DEFICIT* Fiscal deficit seen at 5.1 percent of GDP in
2010-11* Fiscal deficit seen at 4.6 percent of GDP in 2011-12*
Fiscal deficit seen at 3.5 percent of GDP in 2013-14
41. AS PER THE NEWSPAPERS
Led by higher than expected non-tax revenue like auction of 3G
spectrum,finance ministerPranabMukherjeetoday pegged the fiscal
deficit at 5.1 per cent for the current financial year, and further
reduced the estimates to 4.6 per cent for 2011-12.Mukherjee said
the revenues from 3G and Broadband Wireless Access (BWA) spectrum
auction (that garnered Rs 1.08 lakhcrore) has helped government
reduce the fiscal deficit for the current fiscal, from 5.5 per cent
estimated earlier.
42. "Due to the higher than anticipated non-tax revenue from 3 G
spectrum auction... I have brought down the fiscal deficit from 5.5
per cent to 5.1 per cent of the GDP for 2010-11," Mukherjee said in
his 2011-12 Budget speech."During the course of 2010-11, I had the
opportunity to bring in improvement in fiscal balance", he
said."For the year 2011-12 I have kept it (fiscal deficit) at 4.6
per cent of GDP which improve upon my own target of 2011-12
indicated in the fiscal roadmap presented in the last budget,"
Mukherjee said.
43. The pre-budget Economic Survey Survey tabled in Parliament last
week had pegged the fiscal deficit for the current fiscal at 4.8
per cent.India's fiscal deficit had ballooned to 6.3 per cent of
the GDP in 2009-10 in view of stimulus spending worth billions of
dollars to combat global financial meltdown.In the medium term
fiscal policy, Mukherjee pegged the rolling target of fiscal
deficit at 4.1 per cent for 2012-13, and 3.5 per cent for
2013-14.In his Budget speech, Mukherjee pegged the revenue deficit
for the current fiscal and 2011-12 at 2.3 per cent and 1.8 per cent
respectively.The government had in 2010 mobilised Rs 1.08 lakhcrore
from auctioning of spectrum for 3G and broadband wireless access
(BWA) services.
44. Besides, it also followed the path of consolidation during
April-December of 2010-11, as it partially withdrew the sops given
to the industry in 2008 and 2009.Stimulus package provided by the
government at the time of financial meltdown helpedIndiato grow by
6.8 per cent in 2008-09, and by 8 per cent in 2009-10.
45. SECTORALIMPACTChayanAgarwal
46. BANKING
47. CAPITAL GOODS/ENGINEERING
48. PHARMACEUTICALS
49. ELECTRICITY
50. FERTILIZER
51. CONSUMER GOODS
52. HOUSING
53. OIL AND GAS
54. AAKANGSHA
INCOME TAX
55. INTRODUCTION
WHAT IS INCOME TAX?
An income tax is a tax levied on the income of individuals or
businesses (corporations or other legal entities). Various income
tax systems exist, with varying degrees of tax incidence. Income
taxation can be progressive, proportional, or regressive. When the
tax is levied on the income of companies, it is often called a
corporate tax, corporate income tax, or profit tax. Individual
income taxes often tax the total income of the individual (with
some deductions permitted), while corporate income taxes often tax
net income (the difference between gross receipts, expenses, and
additional write-offs). Various systems define income differently,
and often allow notional reductions of income (such as a reduction
based on number of children supported).
56. now extended to * Standard rate of excise duty held at 10
percent; no change in CENVAT rates* Personal income tax exemption
limit raised to Rs 180,000 from Rs 160,000 for individual tax
payers*For senior citizens, the qualifying age reduced to 60 years
and exemption limit raised to Rs 2.50 lakh.*Citizens over 80 years
to have exemption limit of Rs 5 lakh.* To reduce surcharge on
domestic companies to 5 percent from 7.5 percent.* A new revised
income tax return form 'Sugam' to be introduced for small tax
papers.* To raise minimum alternate tax to 18.5 percent from 18
percent * Direct tax proposals to cause 115 billion rupees in
revenue loss* Service tax rate kept at 10 percent* Customs and
excise proposals to result in net revenue gain of 73 billion
rupees
57. * Iron ore export duty raised to 20 percent*Nominal one per
cent central excise duty on 130 items entering the tax net. Basic
food and fuel and precious stones, gold and silver jewellery will
be exempted.*Peak rate of customs duty maintained at 10 per cent in
view of the global economic situation.*Basic customs duty on
agricultural machinery reduced to 4.5 per cent from 5 per
cent.*Service tax widened to cover hotel accommodation above Rs
1,000 per day, A/C restaurants serving liquor, some category of
hospitals, diagnostic tests.*Service tax on air travel increased by
Rs 50 for domestic travel and Rs 250 for international travel in
economy class. On higher classes, it will be ten per cent flat.*
Electronic filing of TDS returns at source stabilised; simplified
forms to be introduced for small taxpayers.* Works of art exempt
from customs when imported for exhibition in state-run
institutions; this private institutions.
58. VARSHA
ON THE STATE OF GOVERNANCE
59. Union Budget
&
Governance
60. Progress In Critical Institutions :
Retail
Banking
Telecom
Insurance
Tourism
61. Food Inflation
Feb 2010 20.3%
Week of June 11 9.13%
General inflation 9.06%
Country may face a period of double digit inflation.
62. Private Investments
Made FDI policy more user friendly
Permission given to SEBI registered Mutual Funds to accept
subscriptions from foreign investors who meet the KYC
requirements.
The FII limit for investment in corporate bonds increased from US$
20 billion to US$ 25 billion.
63. Economy is back to the pre-crisis trajectory
64. 2009 7.4% 65. 2010 8.4% 66. Projected GR for FY11 8.75
9.25
