Spending
• Total expenditure in 2011-12 seen at Rs12.58 trillion
• Plan expenditure seen at Rs4.41 trillion in 2011-12, up 18.3%
Revenue
• Gross tax receipts seen at Rs9.32 trillion in 2011-12
• Corporate tax receipts seen at Rs3.6 trillion in 2011-12
• Tax-to-GDP ratio seen at 10.4% in 2011-12; seen at 10.8% in 2012-13
• Customs revenue seen at Rs1.52 trillion in 2011-12
• Factory gate duties seen at Rs1.64 trillion in 2011-12
• Non-tax revenue seen at Rs1.25 trillion in 2011-12
• Service tax receipts seen at Rs82,000 crore in 2011-12
• Telecoms fees, auction of broadband spectrum to raise Rs29,650 crore in 2011-12
Borrowing
• Gross market borrowing for 2011-12 seen at Rs4.17 trillion (Reuters forecast Rs4.5 trillion)
• Net market borrowing for 2011-12 seen at Rs3.43 trillion (Reuters forecast Rs3.77 trillion)
• Revised gross market borrowing for 2010-11 at Rs4.47 trillion
Subsidies
• Subsidy Bill in 2011-12 seen at Rs1.44 trillion
• Food Subsidy Bill in 2011-12 seen at Rs60,570 crore
• Revised Food Subsidy Bill for 2010-11 at Rs60,600 crore
• Fertiliser Subsidy Bill in 2011-12 seen at Rs50,000 crore
• Revised Fertiliser Subsidy Bill for 2010-11 at Rs55,000 crore
• Petroleum Subsidy Bill in 2011-12 seen at Rs23,640 crore
• Revised Petroleum Subsidy Bill in 2010-11 at Rs38,400 crore
• State-run oil retailers to be provided with Rs20,000 crore cash subsidy in 2011-12
Growth, inflation expectations
• Inflation seen at 5% in 2011-12
• Economy expected to grow at 9% in 2012, plus or minus 0.25%
Taxes
• Standard rate of excise duty held at 10%
• Service tax rate held at 10%
• Scope of service tax to be widened
• Minimum alternate tax raised to 18.5% from 18%
• Iron ore export duty raised to 20%
• Personal income tax exemption limit raised to Rs1,80,000
Disinvestment
• Disinvestment in 2011-12 seen at Rs40,000 crore
Policy reforms
• Food Security Bill to be introduced this year
• Foreign direct investment policy to be liberalized further
• Infrastructure debt funds to be created
• Infrastructure growth to be boosted with tax-free bonds of Rs30,000 crore
• Foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure to be raised by $20 billion
• To permit Securities and Exchange Board of India (Sebi) registered mutual funds to access subscriptions from foreign investments
• Public Debt Bill to be introduced in parliament soon
Fiscal deficit
• Fiscal deficit seen at 5.1% of GDP in 2010-11
• Fiscal deficit seen at 4.6% of GDP in 2011-12
• Fiscal deficit seen at 3.5% of GDP in 2013-14
Sector spending
• To allocate more than Rs1.64 trillion to defence sector in 2011-12
• Corpus of rural infrastructure development fund raised to Rs18,000 crore in 2011-12
• To provide Rs20,150 crore capital infusion in state-run banks in 2011-12
• To allocate Rs52,050 crore for the education sector
• To raise health sector allocation to Rs26,760 crore
Agriculture
• To focus on removing supply bottlenecks in the food sector
• To raise credit flow target to agriculture sector to Rs4.75 trillion
• Give 3% interest subsidy to farmers in 2011-12
• Cold storage chains to be given infrastructure status
• To provide Rs300 crore for 60,000 hectares under palm oil plantation
• Actively considering new fertilizer policy for urea
Finance minister on the state of the economy
• “Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future.”
• “At times the biggest reforms are not the ones that make headlines, but the ones concerned with details of governance which affect the everyday life of aam aadmi (common man). In preparing this year’s budget, I have been deeply conscious of this fact.”
• Food inflation remains a concern
• Current account deficit situation poses some concern
• Must ensure private investment is sustained
• “The economy has shown remarkable resilience.”
Finance minister on governance
• “Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability ... such an impression is misplaced.”
• Corruption is a problem, must fight it collectively
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INVESTMENT ENVIRONMENT
Foreign Direct Investment:
„ Discussions underway to further liberalise the FDI policy.
Foreign Institutional Investors
„ SEBI registered mutual funds permitted to accept subscription from foreign
investors who meet KYC requirements for equity schemes.
„ To enhance flow of funds to infrastructure sector, the FII limit for investment in
corporate bonds issued in infrastructure sector being raised.
Financial Sector Legislative Initiatives
„ To take the process of financial sector reforms further, various legislations
proposed in 2011-12.
„
Amendments proposed to the Banking Regulation Act in the context of additional
banking licences to private sector players.
Public Sector Bank Capitalisation
„ 6,000 crore to be provided during 2011-12 to enable public sector banks to
maintain a minimum of Tier I CRAR of 8 per cent.
AGRICULTURE
„ Removal of production and distribution bottlenecks for items like fruits and
vegetables, milk, meat, poultry and fish to be the focus of attention this ye
Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from
6,755 crore to 7,860 crore.
Bringing Green Revolution to Eastern Region
„ To imp r o v e r i c e b a s e d c r o p p i n g s y s t em i n t h i s r e g i o n , a l l o c a t i o n o f
400 crore has been made.
Integrated Development of 60,000 pulses villages in rainfed areas
Allocation of 300 crore to promote 60,000 pulses villages in rainfed areas.
Promotion of Oil Palm
„ Allocation of 300 crore to bring 60,000 hectares under oil palm plantations.
Initiative to yield about 3 lakh Metric tonnes of palm oil annually in five years.
Initiative on Vegetable Clusters
Allocation of 300 crore for implementation of vegetable initiative to provide
quality vegetable at competitive prices.
Nutri-cereals
„ Allocation of 300 crore to promote higher production of Bajra, Jowar, Ragi and
other millets, which are highly nutritious and have several medicinal properties.
Agriculture Credit
„ Credit flow for farmers raised from 3,75,000 crore to 4,75,000 crore in 2011-12.
„ Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for
providing short-term crop loans to farmers who repay their crop loan on time.
„
In view of enhanced target for flow of agriculture credit, capital base of NABARD
to be strengthened by 3,000 crore in phased manner
Mega Food Parks
„ Approval being given to set up 15 more Mega Food Parks during 2011-12.
Infrastructure and Industry
„ Allocation of 2,14,000 crore for infrastructure in 2011-12. This is an increase
of 23.3 per cent over 2010-11. This also amounts to 48.5 per cent of total plan
allocation.
Government to come up with a comprehensive policy for further developing PPP projects.
„ IIFCL to achieve cummulative disbursement target of 20,000 crore by March 31, 2011 and 25,000 crore by March 31, 2012. „ Under take out financing scheme, seven projects sanctioned with debt of 1,500 crore. Another 5,000 crore will be sanctioned during 2011-12.
„ To boost infrastructure development, tax free bonds of 30,000 crore proposed to be issued by Government undertakings during 2011-12.
Exports
„ Of 23 suggestions made by Task Force on Transaction Cost, constituted by the Department of Commerce, 21 suggestions already implemented. Action to be taken on the remaining two suggestions. Transaction Cost of 2,100 crore will thus be mitigated. „ Self assessment to be introduced in Customs to modernize the Customs administration.
„ Proposal to introduce scheme for refund of taxes paid on services used for export
of goods. „ Mega Cluster Scheme to be extended for leather products. Seven mega leather
clusters to be set up during 2011-12. „
Jodhpur to be included for the development of a handicraft mega cluster
Education
„ Allocation for education increased by 24 per cent over current year
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