Budget 2012 13 Reality Check May 2012 Www.upscportal.com

8/2/2019 Budget 2012 13 Reality Check May 2012 Www.upscportal.com

1/9

3www.upscportal.com

Click here to Order Hard Copy of this Magazine:

http://www.upscportal.com/civilservices/order-form/magazine

UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs

http://www.civilservicesmentor.com

The Union Budget 2012-13

presented by the Finance

Minister Pranab Mukherjee in

Lok Sabha on 16th March, ident ified five

objectives to be addr essed effectively in

the ensuing fiscal year. They include focus

on domestic demand driven growth

recovery; create conditions for rapid

revival of high growth in private

investment; address supply bott lenecks

in agriculture, energy and transport

sectors particularly in coal, power,

national highways, railways and civil

aviation; inter vene decisively to addr ess

the problem of malnut rition especially in

the 200 high-burden districts and

expedite coordinated implementation ofdecisions being taken to improve delivery

systems , governance, and transparency;

and address the problem of black money

and corrupt ion in public life.

If the Union Budget was expected

to make some special concessions for

West Bengal to placate Chief Minister

Mamata Banerjee, there was no hint of it

in Finance Minister Pranab Mukher jees

speech on Friday.

Indeed, it was a speech singularly

short of any political message; nor indeed,did it have a strong social message, as

most of the schemes mentioned are

already in place, with the government just

making additional allocations. Perhaps,

the only social sector issue that Mr.

Mukherjee highlighted in this fiscal year

was to intervene decisively to address

the pr oblem of malnutr ition, especially

in the 200 high burden districts.

Interestingly, that message

appeared to have got across to the

Trinamool Congress. For despite the fact

that West Bengal only got a flood

management project in Murshidabad, a

Congress-contro lled district, and Rs. 50

crore to establish a world-class centre t o

improve water quality in Kolkata, the

Trinamool MPs seemed low key,

describing the budget as tolerable. Of

course, Trinamool Leader in the Lok

Sabha Sudip Bandopadhyay did ment ion

the fact that West Bengal, like Punjab and

Kerala, was in a debt trap and wanted athree-year morator ium. But government

sources told that the Centr e had made it

clear to all three States that it wanted to

see some signs on the part of these State

governments that additional funding

would not be like pouring water int o a

bucket with holes in it . The message that

the UPA government, evidently, wants to

send out th rough this budget is that its

focus will be on strengthening the

economy, stimulating growth and on

revenue generating measures. If Indiacan continue to build on its economic

strength, it can be a sour ce of stability for

the world economy and provide a safe

destination for restless global capital.

Probably the message of this budget: that

the government intends to govern, and

the allies need to get on board. Mukherjee

said that Indias GDP growth in 2012-13

is expected to be 7.6 per cent +/-0.25

per cent. He said that in 2011-12, Indias

GDP is estimated t o grow at 6.9 per cent

after having grown at the rate of 8.4 per

cent in each of the two preceding years

He said though the global crisis had

affected India, it st ill remains among the

front runners in economic growth.

Mukherjee said the slowdown is primarily

due to deceleration in industrial growth.

Stating th at the headline inflation

remained high for most part of the year,

the Finance Minister expressed hope that

it will moderate further in the next few

months and remain stable thereafter. FMlaid emphasis on striking a balance

between fiscal consolidation and

strengthening macroeconomic

fundamentals. He announced

introduction of amendments to the Fiscal

Responsibility and Budget Management

Act, 2003 (FRBM Act) as part of the

Finance Bill 2012. He said that concept

of Effective Revenue Deficit and

Medium Term Expenditure

Framework statement are two important

features of Amendment to FRBM Act inthe direction of expenditure reforms.

This statement shall set forth a thr ee year

rolling targets for expenditure indicators.

The FM called for a need to have a

close look at the growth of revenue

expenditure, particularly, on subsidies.
http://www.upscportal.com/http://www.upscportal.com/civilservices/order-form/magazinehttp://upscportal.com/civilservices/current-affairshttp://www.civilservicesmentor.com/http://www.civilservicesmentor.com/http://upscportal.com/civilservices/current-affairshttp://www.upscportal.com/civilservices/order-form/magazinehttp://www.upscportal.com/


2/9

4


http://www.civilservicesmentor.com http://upscportal.com



He announced that from 2012-13 while

subsidies related to food and for

administer ing the Food Security Act will

be fully provided for, all other subsidies

would be funded to the extent t hat t hey

can be borne by the economy without

any adverse implications. He said that the

Government will endeavor to restr ict the

expenditure on central subsidies under 2

per cent of GDP in 2012-13 and over the

next three years, it would be further

brought down to 1.75 per cent of GDP.

Finance Minister said that based on

recommendations of the Task Force

headed by Nandan Nilekani, a mobile-

based Fertilizer Management System has

been designed to provide end-to-end

information on movement of fertilizers

and subsidies which will be rolled out

nation-wide during 2012. He said that

transfer of subsidy to the retailer and

eventually to the farmers will be

implemented in subsequent phases which

will benefit 12 crore farmer families. On

the tax reforms, the Finance Minister said

that the Direct Taxes Code (DTC) Bill

will be enacted at the earliest after

expeditious examination of the report of

the Parliamentary Standing Committee.He said drafting of model legislation for

Centre and State Goods and Services Tax

(GST) in concert with States is under

progress. He added that the GST

network will be set up as a National

Information Utility and will become

operational by August 2012.

On the disinvestment policy, FM

said that the Central Public Sector

Enterprises (CPSEs) are being given a

level playing field vis--vis private sector

with regard t o practices like buy-backsand listing at stock exchange. Stating that

while in 2011-12, the Government will

raise about ` 14,000 crore from

disinvestment as against a target of

` 40,000 crore, the Finance Minister

proposed to r aise ` 30,000 crore through

disinvestment in 2012-13. He said at least

51 per cent ownership and management

of CPSEs will remain with the

government. Calling for strengthening

investment environment, FM said that

efforts are on to arrive at a broad-based

consensus in respect of decision to allow

FDI in multi-brand retail up to 51 per

cent. He proposed to introduce a new

scheme called Rajiv Gandhi Equity

Savings Scheme to allow for income tax

deduction of 50 per cent to new retail

investors who invest up to ` 50,000

directly in equities and whose annual

income is below ` 10 lakh. The scheme

will have a lock-in period of 3 years

Regarding capital markets, the Finance

Minister proposed to allow Qualified

Foreign Investors (QFIs) to access Indian

Corporate Bond market. He also

proposed simplifying the process of Initial

Public Offer (IPO).

The FM said that the government

is committed to protect the financial

health of Public Sector Banks and

Financial Institutions. He proposed to

provide ` 15,888 crore for capitalization

of Public Sector Banks, Regional Rural

Banks and other financial institutionsincluding NABARD. He added that a

Cent ral Know Your Customer (KYC)

depositary will be developed in 2012-13

to avoid multiplicity of registration and

data upkeep. The Finance Minister

informed that out of 73,000 identified

habitations that were to be covered under

Swabhimaan campaign for providing

banking facilities by March 2012, about

70,000 habitations have been covered

while the rest are likely to be covered by

March 31, 2012.He added that as a nextstep Ultr a Small Branches are being set

up at these habitations. In 2012-13,

Swabhimaan campaign will be extended

to more habitations.

Emphasizing on infrastructure and

industrial development , Mukherjee said

that during the 12th Plan, infrastructure

investment will go up to ` 50 lakh crore

with half of this expected from private

sector. Stating that in 2011-12 tax free

bonds for ` 30,000 crore were

announced for financing infrastructure

projects, he proposed to double it to raise

` 60,000 crore in 2012-13. The Minister

proposed to allow External Comm ercial

Borrowings (ECB) to part finance Rupee

debt of existing power projects. The

Finance Minister announced a target of

covering 8,800 km. under NHDP next

year and increase in allocation of the Road

Transport and Highways Ministr y by14

per cent to ` 25,360 crore in 2012-13.

He proposed to permit ECB for working

capital requirements of the Airline

Industr y for a period of one year, subject

to a total ceiling of US dollar 1 billion to

address the immediate financial concerns

of the Civil Aviation Sector.He added that

a proposal to allow foreign airlines to

participate up to 49 per cent in the equity

of an air transpor t undertaking is under

active consideration .

Expressing concern over shortage

in housing sector, the Finance Minister

proposed various measures to addressthe shortage of housing for low income

groups in major cities and towns

including ECB for low cost housing

projects and setting up of a Credit

Guarant ee Trust Fund. Regarding textile

sector, the Finance Minister announced

setting up of two more mega clusters, one

to cover Prakasam and Gun tur districts

in Andhra Pradesh and other for Godda

and neighboring districts in Jharkhand in

addition to 4 mega handloom clusters

already operationalized. He alsoproposed setting up of three Weavers

Service Centres, one each in Mizoram,

Nagaland and Jharkhand. The Minister

proposed a ` 500 crore pilot scheme in

twelfth plan for promotion and

application of Geo-textiles in the North
http://upscportal.com/civilservices/current-affairshttp://www.civilservicesmentor.com/http://upscportal.com/http://www.upscportal.com/civilservices/order-form/magazinehttp://www.upscportal.com/civilservices/order-form/magazinehttp://upscportal.com/http://www.civilservicesmentor.com/http://upscportal.com/civilservices/current-affairs


3/9

5www.upscportal.com





East. A powerloom Mega Cluster will be

set up in Ichalkaranji in Maharashtra. FM

proposed to set up a ` 5000 crore India

Opportunities Venture Fund with SIDBI

to enhance availability of equity to micro,

small and medium enterprises. Stating

that agriculture will continue to be a

priority for the government, Mukher jee

proposed an increase by 18 per cent to

` 20,208 crore in the total Plan Outlay

for the Department of Agriculture and

Cooperat ion in 2012-13. He said that the

out lay for Rashtr iya Krishi Vikas Yojana

(RKVY) is being increased to ` 9217 crore

in 2012-13. Underlining importance of

timely access to affordable credit for

farmers, the Finance Minister pr oposed

to raise the target for agricultural credit

to ` 5,75,000 crore, which r epresents an

increase of` 1,00,000 crore over the

target for the current year. He said that a

short term RRB Credit Refinance Fund is

being set up to enhance the capacity of

Regional Rural Banks to disburse short

term crop loans to the small and marginal

farmeRs He added that Kisan Credit Card

Scheme will be modified to make it a

smart card which can be used at ATMs.

The Financed Minister said that inorder to have a better out reach of the

food processing sector, a new centr ally

sponsored scheme titled National

Mission on Food Processing will be

started in cooperation with the States in

2012-13. Minister proposed an increase

of 18 per cent to ` 37,113crore for

Scheduled Castes Sub Plan and an

increase of 17.6 per cent to ` 21,710

crore for Tribal Sub Plan du ring 2012-

13. Regarding food security, Mukherjee

said that National Food Security Bill 2011is before Parliamentary Standing

Committee. He said a multi-sectoral

programme to address maternal and

child malnutr ition in selected 200 high

burdened districts is being rolled out

during 2012-13. He further said that an

allocation of` 15,850 crore has been

made for ICDS scheme which is an

increase of 58% and ` 11,937 crore for

National Programme of Mid-Day Meals

in schools for the year 2012-13. He added

that an allocation of` 750 crore is

proposed for Rajiv Gandhi Scheme for

Empowerment of Adolescent Girls,

SABLA.

The allocation for rural drinking

water and sanitation is proposed to be

increased by over 27 per cent to ` 14,000

crore and for Pradhan Mantri Road

SadakYojana by 20 per cent to ` 24,000

crore in 2012-13. He proposed to

enhance the allocation under Rural

Infrastructur e Development Fund t o

` 20,000 crore with ` 5,000 crore

exclusively earmarked for .creating

warehousing facilities. The Finance

Minister proposed an increase in

allocation by 21.7 per cent for Right t o

Education Sarva Shiksha Abhiyan to

` 25,555 crore and by 29 per cent for

Rashtr iya Madhyamik Shiksha Abhiyan

to ` 3,124 crore. He proposed to set up a

Credit Guarantee Fund to ensure bett er

flow of funds to students. Regarding

health sector he proposed an increase inallocation for NRHM to ` 20,822 crore

in 2012-13. He also said that National

Urban Health Mission is being launched.

The Finance Minister said that

Mahatma Gandhi National Rural

Employment Guarant ee Scheme has had

a positive impact. He proposed an

allocation of` 3915 crore for National

Rural Livelihood Mission (NRLM) which

represents an increase of 34 per cent. He

proposed to provide ` 200 crore to

enlarge the corpus to`

300 crore of theWomens SHGs Developmen t Fund. He

said the fund will also support the

objectives of Aajeevika i.e. NRLM and will

empower women SHGs to access bank

credit. He also proposed to establish a

Bharat Livelihoods Foundat ion of India

through Aajeevika which will support and

scale up civil society initiatives and

interventions particularly in the tribal

regions covering around 170 districts.

Allocation under National Social

Assistance Programme (NSAP) is

proposed to be raised by 37 per cent to

` 8447 crore. Under the Indira Gandhi

National Widow Pension Scheme and

Indira Gandhi National Disability Pension

Scheme for BPL beneficiaries, the

monthly pension amoun t per person is

being raised from ` 200 to ` 300.

FM announced a provision of

` 1,93,407crore for Defence Services

including ` 79,579 crore for capital

expenditure. He said the allocation is

based on present needs and any further

requirement would be met. Addressing

governance related issues, Mukherjee

said adequate funds are proposed to be

allocated to complete enrollments of

another 40 crore persons under UID

Mission. Outlining the steps taken by the

Government to address the issue of black

money, the Minister proposed to lay a

White Paper on Black Money in the

current session of Parliament. In the

Budget estimates for 2012-13, the GrossTax Receipts are estimated at ` 10,

77,612 crore which is an increase of 15.6

per cent over the Budget Estimates and

19.5 per cent over the revised estimates

for 2011-12. After devolution t o States,

the net tax to the Centre in 2012-13 is

estimated at ` 7,71,071crore.

The Non Tax Revenue Receipts are

estimated at ` 1,64,614crore and Non-

debt Capital Receipts at ` 41,650 cror e.

The total expenditure for 2012-13 is

budgeted at`

14,90,925 crore. Of this` 5,21,025crore is the Plan Expenditure

while ` 9,69,900 crore is budgeted as Non

Plan Expenditure. The tax proposals are

guided by the need to move towards the

Direct Tax Code(DTC) in the case of

direct t axes and Goods & Services Tax


4/9

6





(GST) in the case of indirect taxes.

Individual income up to ` 2 lakh will be

free from income tax; income upto ` 1.8

lakh was exempt in 2011-12. Income

above ` 5 lakh and upto ` 10 lakh now

carries tax at the rate of 20 per cent; the

20% tax slab was from ` 5 lakh to ` 8

lakh in 2011-12. A deduction of up to

` 10,000 is now available for interest

from savings bank accounts. Within the

existing limit for deduction allowed for

health insurance, a deduction of up to

` 5000 is being allowed for preventive

health check-up. Senior citizens not

having income from business will now not

need to pay advance tax.

While no changes have been made

in corporate taxes, the budget proposes

a number of measures to promote

investment in specific sectors. In order

to provide low cost funds to some stressed

infrastructure sectors, withholding tax on

interest payments on external borrowings

(ECBs) is being reduced from 20 percent

to 5 per cent for 3 years. These sectors

are power, airlines, roads and br idges,

ports and shipyards, affordable housing,

fertilizer, and dam. Investment linked

deduction of capital expenditur e in somebusinesses is proposed to be pr ovided at

150 per cent as against the current rate

of 100 per cent. These sectors include

cold chain facility, warehouses for storing

foodgrain, hospitals, fertilizers and

affordable housing. Bee keeping,

container freight and warehousing for

storage of sugar will now also be eligible

for investment linked deduction. The

budget also proposes weighted deduction

for R&D expenditure, agri-extension

services and expenditure on skilldevelopment in the manufacturing sector.

For small and medium enterpr ises

(SMEs) the turnover limit for compulsory

tax audit of accounts as well as for

presumptive taxation is proposed to be

raised from ` 60 lakh to ` 1 crore. In

order to augment funds for SMEs, sale of

resident ial property will be exempt from

capital gains tax, if the proceeds are used

for purchase of plant and machinery, etc.

A General Anti-Avoidance Rule (GAAR)

is being introduced in order to counter

aggressive tax avoidance. Securities

transaction tax (STT) is being reduced

by 20 per cent on cash delivery

transactions, from 0.125% to 0.1%.

Alternative Minimum Tax is proposed to

be levied from all persons, other than

companies, claiming profit linked

deductions.

The Finance Minister has proposed

a series of measures to deter the

generation and use of unaccounted

money. In the case of assets held abroad,

compulsory reporting is being introduced

and assessment up to 16 years will now

be allowed to be re-opened. Tax will be

collected at source on trading in coal,

lignite and iron ore; purchase of bullion

or jewellery above ` 2 lakh in cash; and

transfer of immovable property (other

than agricultural land) above a specified

thr eshold. Unexplained money, credits,

investments, expenditures etc. will be

taxed at the highest rate of 30 per centirrespective of the slab of income. The

Finance Minister has made an effort to

widen the service tax base, strengthen its

enforcement and bring it as close as

possible to the centr al excise. A common

simplified registration form and a

common return are being introduced for

centr al excise and service tax.

All services will now attract service

tax, except t hose in t he negative list. The

negative list has 17 heads and includes

specified services provided by thegovernment or local authorities, and

services in t he fields of education, renting

of residential dwellings, enter tainment

and amusement,public transportation,

agriculture and animal husbandry. A

number of other services including health

care, and services pr ovided by charities,

independent journalist, sport persons,

performing artists in folk and classical arts,

etc are exempt from service tax. Film

industry also gets tax exemption on

copyrights relating to recording of

cinematographic films. Service tax rate is

being increased from 10 per cent to 12

per cent, with consequential change in

rates for services that have individual tax

rates. The standard rate of excise duty

for non-petroleum goods is also being

raised from 10 per cent to 12 per cent.

No change is proposed in peak rate of

customs duty of 10 per cent on non-

agricultural goods.

The Budget offers relief to different

sectors of economy, especially those

under stress. Import of equipment for

fertilizer projects are being fully

exempted from basic customs du ty of 5

per cent for 3 years Basic customs du ty is

also being lowered for a number of

equipment used in agriculture and related

areas. In the realm of infrastructure,

customs relief is being given to power,

coal and railways sectors while steam coal

gets full customs du ty exemption for 2

years (with the concessional counter-veiling duty of 1 per cent), natu ral gas,

LNG and certain uranium fuel get full

duty exemption t his year. Different levels

of duty concessions are being provided

to help mining, railways, roads, civil

aviation, manufacturing, health and

nutr ition and environment. So as to help

modern ization of the textile industr y, a

number of equipment are being fully

exempted from basic customs duty, and

lower customs duty is being proposed for

some other items used by the textileindustry.

Customs duty is being raised for

gold bars and coins of certain categories,

platinum and gold ore. Customs dut y is

to be imposed on coloured gem stones.

Excise duty on certain categories of


5/9

7www.upscportal.com





cigarettes and bidis, pan masala and

chewing tobacco is being increased.

Customs duty is being increased on

complet ely built large cars/ SUVs/ MUVs

of value exceeding $40,000. Silver

jewellery will now be fully exempt from

excise duty. Unbranded precious m etal

jewellery will att ract excise duty on the

lines of branded jewellery. Operat ions are

being simplified and measur es taken to

minimize impact of this provision on

small artisans and goldsmiths. While

direct tax proposals in the Budget will

result in a net revenue loss of `

4,500crore, indirect t axes will result in a

net revenue gain of 45,940 crore. Thus,

the tax proposals will lead to a net gain of

` 41,440crore.

HIGHLIGHTS OF BUDGET :

v Cars to att ract ad valorem rate of

27 per cent.

v Upper limit raised from ` 8 lakh to

` 10 lakh for 20 per cent bracket

v Individual income tax payer

exemption limit to be raised to

` 200,000 from ` 180,000.

v Capital gains tax on residential

property exempted if sale proceedsused for SMEs.

v Customs duty on bicycles and parts

increased

v Customs du ty on standard gold bar

and coins exceeding 99.5 per cent

purity, platinum and non-standard

gold raised

v Import duty on large cars, MUVs,

SUVs enhanced

v Gold jewellery not bearing brand

name to be included in the one per

cent levy on precious metaljewellery

v Branded silver jewellery fully

exempted from excise duty

v Baggage allowance for people of

Indian origin increased from

` 25,000 to ` 35,000 and for

children from ` 12,000 to ` 15,000

v Customs and central excise

proposals to net a revenue of

` 27,280 crore

v Installation of solar plants exempted

from CVD.

v Oil cess on domestic crude raised

to ` 4,500 per ton from ` 2,500 per

ton.

v Standard excise duty rate raised

from 10 per cent to 12 per cent.

v Service tax to yield additional

revenue of 18,650 crore.

v No change in the peak rate customs

duty.

v Full exemption from basic customs

duty on natur al gas, LNG, uranium

for generation of electr icity for two

years.

v Import of equipment for fertilizer

plants fully exempt from customs

dut y for three years

v Full exemption from basic customs

duty for equipment for road and

highway construction

v Customs duty on import of parts of

aircraft, tyres and t esting equipment

fully exempted.

v Excise duty on handmade and semi-mechanised matches reduced from

10 to 6 per cent

v Introduction of compulsory

repor ting of assets held abroad.

v Securities Transaction Tax (STT)

reduced from 0.125 per cent to 0.1

per cent.

v Withholding tax on power, airlines,

road and brides, ports and shipyard,

fertilisers, dams and affordable

houses lowered to 5 pc from 20 pc

for 3 years.v No change in corporate tax r ate.

v The Budget also exempts up to

` 10,000 of interest income from

tax.

v No IT for income up to ` 2,00,000;

10 pc on income between ` 2-5

lakh; 20 pc on income between

` 5-10 lakh and 30 pc on income

above ` 10 lakh.

v Tax exempt ion of up to ` 5,000 for

health insurance for annual

preventive health checkup

v Direct taxes proposals to result in

net revenue loss of 4,500 cror e.

v All services except 17 in the

negative list to be brought under

service tax net .

v Copyright relating to

cinematography in film industry

exempted from service tax

v Team to st udy common tax code

for service tax and central excise to

be set up

v No change in the peak rate customs

duty

v Service tax to yield additional

revenue of 18,650 cror e.

v Standard excise duty rate raised

from 10 per cent to 12 per cent.

v Determined to bring down fiscal

deficit to 5.1 per cent of GDP next

fiscal

v Total debt of the Centre will be 45

per cent of GDP

v Revenue deficit for 2012-13projected at ` 1,85,752 cror e.

v Non-plan expenditure ` 9,69,900

crore in 2012-13; 8.7 per cent

higher than current year

v Direct tax collection fell short by

` 32,000 crore in current fiscal.

v Fiscal deficit at 5.9 per cent of GDP

in revised estimates for 2011-12.

v Determined to bring down fiscal

deficit to 5.1 per cent of GDP next

fiscal.

v

Urban health schemes get higherallocation.

v 40 crore Aadhar enrollment in year

beginning April 2012.

v White Paper on black money to be

tabled in current session of

Parliament.


6/9

8





v Information on blackmoney

stashed abroad has started flowing

in; prosecution to be executed in

some cases.

v Net tax receipts of the Centre in

2011-12 stands at ` 7,71,071 crore.

v Interest subvention of 7 pc to

women self groups for loans up to

` 3 lakh, additional 3 pc for those

making timely repayment .

v ` 1000 crore to be provided for

National Skill Development

Corporation in 2012-13.

v ` 3,915 crore to be spent on

National Rural Livelihood Mission.

v ` 193,407 crore provision made for

defence services in 2012-13.v National Backward Region Grant

scheme outlay raised by 22 per cent

to ` 12,040 crore

v ` 20,000 cr to be spent on rural

infrastructure development,

including ` 5,000 cr for creating

warehousing facilities.

v ` 20,822 crore earmarked for

National Rural Health Mission

against ` 18,115 crore this year

v Govt to create PDS through Adhaar

platform by Dec to realise objectives

of Food Security Bill

v ` 15,850 cr to be allocated to

Integrated Child Development

Scheme in 2012-13 as against

` 10,000 cr this fiscal.

v Allocation for rural drinking water

and sanitation scheme increased

from ` 11,000 cr in FY 12 to

` 14,000 cr in 2012-13

v National Mission on Food Proce-

ssing to be start ed in 2012-13.

v Govt to allow use of Kisan credit

cards in ATMsv FM says computerisation of the

Public distribution system will be

done

v Additional 3 per cent interest

subvention t o farmers for promptly

repaying their dues.

v Investment in agriculture will be

hiked, says FM

v Government to provide ` 10,000

cror e to NABARD for refinancing

regional rural banks

v Farmers will continue to get interest

subsidy

v Government to set up ` 5000 crore

ventur e fund for MSME sector.

v Agriculture credit target to be raised

by ` 100,000 cr to ` 5,75,000 cr,

says FM

v Govt to double tax free bonds for

infrastructure financing to ` 60,000

crore in next FY

v Proposal to allow foreign airlines to

part icipate direct or indirectly in

India being considered actively.

v India will become self-sufficient in

urea production in five years, says

FM

v Microfin institut ion regulation bill,

natl housing bank regulation bill, reg

bank regulation b ill and public debt

management bill this session

v Income Tax deduction of 50 per

cent on investments of up to

` 50,000 in savings scheme named

after Rajiv Gandhi which will beintroduced

v IPO equity offer above ` 10 crore

will have to be made electron ically

in capital market reforms.

v ` 15,888 cr to be provided for

capitalisation of public sector and

regional rur al banks and NABARD.

v Infrastructure investment in 12th

Plan to go up to ` 50 lakh crore;

half of it to come from pvt sector

v Qualified institutional placement

(QIPs) will be allowed to accessIndian markets

v Government to r aise ` 30,000 crore

in 2012-13 from disinvestment of

stake in PSUs

v Efforts to arrive at broadbased

consensus with state governments

on allowing FDI in multibrand retail

up to 51 percent.

v FM expects cur rent account deficit

to be 3.6%

v Govt. will keep FY13 subsidy at

under 2% of GDP

v Direct Tax Code (DTC) Bill to be

enacted at the earliest, says FM, but

indicated its deferment .

v Govt to fully provide for food

subsidy and food security act in

2012-13.

v Food Security Act will be fully

provided for and subsidy to be 2

per cent of GDP for next two years.

v Pilot project for direct transfer of

subsidiary for kerosene has been

initiated in Alwar, Rajasthan.

v Amendment s to FRBM Act part of

the budget.

v Expectations are for economic

growth rate of 7.6% next year.

v Macro-economic policies must be

improved.

v RBIs monetary policy which has

been tight has impacted both

growth and consumption

Sectoral allocations are as follows:

AGRICULTURE AND ALLIED

ACTIVITIES

v Budgetary allocation for agriculture

and allied activities 2012-13

increased by 18%

v 9217 crore rupees allocated for

Rasht riya Krishi Vikas Yojana.

v 1000 crore rupees for Bringing

Green Revolut ion to Eastern India

(BGREI) project

v 300 crore rupees to Vidarbha

Intensified Irrigation DevelopmentProgram me under RKVY.


incentivising research with rewards


Accelerated Irrigation Benefit

Programme (AIBP)


7/9

9www.upscportal.com





v 500 crore rupees provided to

broaden scope of production of fish

to coastal aquacultur e

RURAL DEVELOPMENT

v 14,000 crore rupees allocated for

rural drinking water and sanitation


Pradhan Mantri Grameen Sadak

Yojna

v 12040 crore rupees provided for

Backward Regions Grant Fund

scheme

v 20,000 crore rupees allocated for

Rural Infrastr ucture Development

Fund

v 5000 crore rupees earmarked for

creating warehousing facilities

EDUCATION

v Sarva Siksha Abhiyan-Right to

Education- 25555 crore rupees


Rashtriya Madhyamik Shiksha

Abhiyan (RMSA)

HEALTH

v 20822 crore rupees National Rural

Health Mission

EMPLOYMENT AND SKILL

DEVELOPMENT


National Rural Livelihood Mission


Prime Ministers Employment

Generation Programme


National Skill Development Fund

DEFENCE AND SECURITY

v 193407 cror e rupees aallocated forDefence services including

79579crore rupees for capital

expenditure

v 1185 crore rupees to be allocated

for construction of nearly 4000

residential quarters for Central

Armed Police Forces

v 3280 crore ru pees proposed to be

allocated for construction of office

building of CentralArmed Police

Forces

INFRASTRUCTURE AND

INDUSTRIAL DEVELOPMENT


Road Transport and HighwaysMinistry

v 3884 crore rupees loan waiver for

handloom weavers and their

cooperative societies

v 500 crore rupees pilot scheme

announced for promotion and

application of Geo-textile in the

North Eastern Region

v 70 crore rupees allocated to set up

a powerloom mega cluster in

Ichalkaranji in Maharashtr a

v 5000 crore rupees IndiaOpportu nities Ventur e Fund t o be

set up with SIDBI

v 15888 cror e rupees to be provided

for capitalisation of public sector

banks and financial institu tions

OTHER MAJOR ALLOCATIONS


Scheduled Castes Sub Plan

v 21710 crore rupees earmarked for

Tribal Sub Plan

Golden Book Series

INDIAN HISTORY

For

Civil Services Preliminary Examinations

Buy Online at: www.upscportal.com/order-books

UPSCPORTALS

CSAT

PAPER1
http://www.upscportal.com/http://www.upscportal.com/civilservices/order-form/magazinehttp://upscportal.com/civilservices/current-affairshttp://www.civilservicesmentor.com/http://www.upscportal.com/order-bookshttp://www.upscportal.com/order-bookshttp://www.civilservicesmentor.com/http://upscportal.com/civilservices/current-affairshttp://www.upscportal.com/civilservices/order-form/magazinehttp://www.upscportal.com/


8/9

Buy Online at: http://upscportal.com/civilservices/order-books

Help Line No. 011- 45151781

Also Available at: http://www.flipkart.com


9/9

Budget 2012 13 Reality Check May 2012 Www.upscportal.com

Documents

Transcript of Budget 2012 13 Reality Check May 2012 Www.upscportal.com