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New Delhi:
Promising more money in the hands of households by hiking the
income tax exemption limit and lowering tax surcharge for
corporates, Finance Minister Pranab Mukherjee Monday presented the
general budget for the next fiscal with a fair dose of reforms and
steps to curb inflation, check corruption and push growth.
Seemingly aware of the elections due soon in five states and of
general negative perception on issues such as graft and lack of
reforms, the finance minister also proposed higher outlays for
health, infrastructure education and farming, as also new subsidy
schemes that will give money directly to users of fertilisers and
kerosene.
In his 110-minute speech in the Lok Sabha, the lower house of
parliament, he proposed to enhance the income tax exemption limit
to Rs.1.8 lakh (Rs.180,000 or $4,000) for the next financial year,
from Rs.1.6 lakh now, even as credit flow to farmers was sought to
be substantially enhanced.
At the same time, he said, while the minimum alternate tax levied
on the book profit of the corporate sector will be increased to
18.5 percent from 18 percent, the surcharge will be lowered to 5
percent from 7.5 percent. He also kept the customs duty unchanged.
The finance minister also said he was proposing a very senior
category of income tax payers, above the age of 80, for whom the
tax exemption will be up to Rs.5 lakh. The qualifying age limit
for senior citizens was being lowered to 60 years from 65 years.
He set the tone for his sixth budget by stating that India had
bounced back after the global financial crisis with broadbased
growth, even as inflation remained a matter of concern, especially
food prices -- though it had dipped from over 20 percent to around
7 percent now.
Budget Highlights
Highlights of the budget for 2011-12 presented by Finance Minister
Pranab Mukherjee in the Lok Sabha Monday:
* Expenditure in 2011-12 estimated at Rs.12,57,729 crore, an
increase of 13.4 percent.
* Tax receipts in 2010-11 at Rs.932,440 crore, an increase of 24.9
percent; non-tax receipts at Rs.125,435 crore.
* Growth at 8.75 percent to 9.25 percent in 2011-12. Economy could
have performed better in 2010-11.
* Goods and Services Tax rollout on April 1, 2012; bill for this
in parliament this year; GST will improve compliance; setting up
strong IT network for implementation.
* Setting up independent debt management office; public debt
management bill to be introduced in parliament.
* Rs.343,000 crore of market borrowings in 2011-12.
* Tax exemption limit raised from Rs.160,000 to Rs.180,000; for
senior citizens, qualifying age reduced from 65 to 60 years.
* Age for below poverty line old age pension scheme to be reduced
from 65 to 60 years.
* Gap between wholesale and retail prices not acceptable.
* Direct tax reductions to result in revenue loss of Rs.11,500
crore.
* Rs.164,415 crore for defence; more will be given if required.
* Twenty-four percent increase in educational outlay; Rs.21,000
crore for Sarva Shiksha Abhiyan.
* Rs.500 crore more for national skill development fund.
* Rs.54 crore each for AMU (Aligarh Muslim University) centres at
Murshidabad and Mallapuram.
* Rs.58,000 crore for Bharat Nirman; increase of Rs.10,000 crore.
* Mahatma Gandhi National Rural Employment Guarantee Scheme wage
rates linked to consumer price index; will rise from existing
Rs.100 per day.
* Close to finalising food security bill.
* Increased outlay on social sector schemes.
* Infrastructure critical for development; 23 percent higher
allocation in 2011-12.
* Rs.30,000 crore to be raised through tax-free bonds.
* Rs.100 crore equity fund for microfinance companies.
* Food storage capacity to be augmented - 15 more mega food parks
to be set up in 2011-12; of 30 sanctioned in previous fiscal, 15
set up.
* Cold storage facilities to be recognised as infrastructure
sector.
* Comprehensive policy on further developing PPP
(public-private-partnership) model.
* Had option to rollback indirect tax rates to 2008 levels but
will maintain standard rate of central excise duty at 10 percent.
* Service tax to stay at 10 percent.
* Revenue gain of Rs.11,000 crore from increase in indirect taxes.
* Five-fold strategy against black money; 13 new double taxation
avoidance agreements; foreign tax division of CTBT strengthened;
strength of Enforcement Directorate increased three-fold.
* Expenditure has to be oriented towards production of goods and
services.
* Government committed to retaining 51 percent stake in public
sector enterprises.
* Current account deficit at 2009-10 levels.
* Corruption a problem we have to fight collectively.
* Development needs to be more inclusive.
* Stronger fiscal consolidation needed.
* Setting tone for newer, vibrant economy.
* Economy has shown remarkable resilience to external and internal
shocks; back to pre-crisis trajectory; set pace for double digit
growth.
* Total food inflation declined to less than 9 percent in January.
* FIIs can invest $40 billion in corporate bonds.
* FDI policy being liberalised.
* Service tax payers with turnover of Rs.60 lakh exempt from
government audit.
* Excise duty on hybrid car kits reduced.
* Works of art exempt from customs when imported for exhibition in
state-run institutions; this now extended to private institutions.
* Farmers need access to affordable credit.
* Moving to improve nutritional security.
* Necessary to accelerate production of fodder.
* Women's self-help development panel to be set up.
* Mortgage risk guarantee fund to be created for economically
weaker sections.
* Housing loan limit for priority sector lending raised to Rs.25
lakh.
* Agriculture growth key to development: Green Revolution waiting
to happen in eastern region.
* Bills on insurance, pension funds, banking to be introduced in
parliament.
* Electronic filing of TDS returns at source stabilised;
simplified forms to be introduced for small taxpayers.
* Bill to be introduced to review Indian Stamp Act.
* New coins carrying new rupee symbol to be issued.
* Anganwadi workers salary raised from Rs.1,500 to Rs.3,000.
* Seek Lord Indra's blessings for good monsoon.
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