Union Budget Analysis 2011-12-2

UNION BUDGET 2011-12

Impact Analysis

UNION BUDGET 2011-12: Impact Analysis

CONTENTS

BUDGET AT A GLANCE ............................................................................................ 1

UNION BUDGET 2011-12 : A MACROECONOMIC PERSPECTIVE .......................... 2-3

SECTORAL IMPACT ............................................................................................. 4-30

CHANGE IN CENTRAL PLAN OUTLAY ..................................................................... 31

RECEIPTS .......................................................................................................... 32-33

EXPENDITURE .................................................................................................. 34-35

KEY ECONOMIC INDICATORS (Absolute Values) ................................................... 36

KEY ECONOMIC INDICATORS (Percentage Change Over Previous Year) ............... 37

GLOSSARY ........................................................................................................ 38-39


1

BUDGET AT A GLANCE

(` bn) 2010-11 2011-12

Revised Estimates Budget Estimates

1) Revenue Receipts 7,838.33 7,898.92

2) Tax Revenue (net to centre) 5,636.85 6,644.57

3) Non-Tax Revenue 2,201.48 1,254.35

4) Capital Receipts (5+6+7)$ 4,327.43 4,678.37

5) Recoveries of loans 90.01 150.20

6) Other receipts 227.44 400.00

7) Borrowings and other liabilities * 4,009.98 4,128.17

8) Total Receipts (1+4)$ 12,165.76 12,577.29

9) Non-Plan Expenditure 8,215.52 8,161.82

10) On Revenue Account of which, 7,267.49 7,335.58

11) Interest Payments 2,407.57 2,679.86

12) On Capital Account 948.03 826.24

13) Plan Expenditure 3,950.24 4,415.47

14) On Revenue Account 3,269.28 3,636.04

15) On Capital Account 680.96 779.43

16) Total Expenditure (9+13) 12,165.76 12,577.29

17) Revenue Expenditure (10+14) 10,536.77 10,971.62

18) Of which, Grants for creation of Capital Assets

907.92 1,468.53

19) Capital Expenditure (12+15) 1,628.99 1,605.67

20) Revenue Deficit (17-1) 2,698.44 3,072.70

% of GDP (3.4) (3.4)

21) Fiscal Deficit {16-(1+5+6)} 4,009.98 4,128.17

% of GDP (5.1) (4.6)

22) Primary Deficit (21-11) 1,602.41 1,448.31

% of GDP (2.0) (1.6)

$ Does not include receipts in respect of Market Stabilisation Scheme. * Includes draw-down of Cash Balance.Note: GDP for BE 2011-2012 has been projected at ` 89,808.60 bn assuming 14.0% growth over the advance estimates of 2010-2011 (` 78,779.47 bn) released by CSO.


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UNION BUDGET 2011-12 : A MACROECONOMIC PERSPECTIVE

The Union Budget FY12 has been presented at a time when the Indian economy is heading towards a high growth trajectory, albeit certain challenges such as elevated inflation, high Current Account Deficit (CAD), and moderating growth of industrial production, which have surfaced in the recent past. At the current juncture, what was required from the Budget was to address the issue of inflation and support growth momentum, while maintaining the focus on fiscal consolidation and continuing ahead on the reform agenda. Increased allocation of planned resources towards infrastructure projects along with the proposals to direct foreign funds and private saving towards infrastructure sector will unlock much of the growth potential of the sector. Although the continued thrust on infrastructure along with agriculture and education sectors is expected to provide significant impetus to economic growth in the medium-term, measures to control inflation in the immediate future were missing in the budget announcements. Having said that, the emphasis on addressing structural concerns such as weak supply chain linkages, and shortcomings in distribution and marketing systems of agriculture commodities is expected to provide long term solution to these issues, which have been contributing to high inflation in the past. Nonetheless, effective and timely implementation of proposed initiatives remains the key to tackle these long pending issues in the agricultural supply chain.

Even as the Budget FY12 reinforces the need for continuation of the reform agenda, it lacks major announcements on this front. While the emphasis of the budget on active consideration of a new fertiliser policy for urea, direct transfer of cash subsidy to BPL people for better delivery of kerosene, LPG and fertiliser, further liberalisation of the FDI policy, et al is definitely positive, how these proposals fare on the implementation front remains to be seen. Rescheduling the implementation of Direct Tax Code (DTC) and Goods and Service Tax (GST) by April 2012 does spell out some concerns on the governance front, but were much anticipated. The decision to propose the revised Companies Bill in the current parliamentary session and intention to introduce the National Food Security Bill (NFSB) during the course of this year are indeed welcome.

On the fiscal deficit front, the budgeted fiscal deficit of 4.6% for FY12, below the Finance Commission’s target of 4.8% for the same year reiterates the Government’s commitment on the fiscal consolidation. This augurs well for India’s growth prospects, given that it enlarges the resource space for private enterprises.

Fiscal Arithmetic for FY12For FY12, total expenditure is budgeted to increase by 3.38% to ` 12,577.29 bn as compared to the revised estimates (RE) of ` 12,165.76 bn for FY11. As in the last budget, the Plan expenditure received a major boost with an allocation of ` 4,415.47 bn, an increase of 11.78% over the FY11 RE. The non-plan expenditure, however, is budgeted to register a marginal decline compared to the revised estimates of FY11; the expenditure on this front is slated to decline by 0.65%. The subsidy burden is budgeted to decline by 12.54% during FY12 over FY11 (RE), owing to relatively


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lower budgeted fertiliser & petroleum subsidy burden and decline in budgeted payments to lending institutions against debt waiver and debt relief scheme for farmers. It is important to note here that if the international crude oil prices continue to rise unabated, the strain on petroleum subsidy might increase.

The expectations regarding the economy moving back to the high growth trajectory of pre-crisis period seem to have guided the revenue target for FY12. Gross tax revenue for FY12 is budgeted to increase by 17.88% over the FY11 RE, driven by a 19.42% increase in direct tax revenue coupled with 17.36% increase in revenue from indirect taxes. On the direct tax front, improvement in corporate profitability along with marginal increase in the rate of minimum alternate tax (MAT) to 18.5% from 18% is expected to garner higher revenues from the corporate sector; revenue from corporate tax is budgeted to increase by 21.46%. Despite the broadening of the income tax slabs, the personal income tax collection is budgeted to increase by 15.40% in FY12 over the FY11 RE. Within indirect taxes, revenue from customs and excise duty is budgeted to increase by 15.10% and 19.12% respectively. The widening of the service tax gamut to include new services is expected to augment service tax revenue, which is budgeted to increase by around 18.16% over the FY11 RE.

Non-tax revenue, on the other hand, is budgeted to record a significant decline of 43.02% during FY12 compared to the RE of FY11. This decline is primarily due to substantially higher non-tax revenue collections during FY11 backed by one-time revenue gain from the 3G spectrum auction. Disinvestment proceeds, however, will play a role in augmenting revenue collections; proceeds from ‘disinvestment of equity in public sector enterprises’ is budgeted to increase to ` 400 bn in FY12 from ` 221.44 bn in FY11 RE. Further, market borrowings are slated to come down by around 6.68% and be around ` 4,171.28 bn during FY12 as compared to ` 4,470.00 bn in FY11 RE.

However, in the current scenario, fiscal deficit target though encouraging seems highly ambitious. Continuing its focus on the fiscal consolidation, the Budget has set the rolling targets at 4.1% and 3.5% for FY13 and FY14 respectively. Moreover, the decision to introduce an amendment to the FRBM Act, laying down the fiscal road map for the next five years during the course of the year reiterates Government’s commitment towards fiscal prudence in the years to come.


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SECTORAL IMPACT

Sector Rating

1. Agriculture Positive+

2. Social Sector Positive+

3. Infrastructure Positive+

Services

4. Banking, Financial Services and Insurance (BFSI) Positive+/Marginally Positive/Positive

5. Hospitality Negative

6. IT/ITeS Negative

7. Media & Entertainment Marginally Positive

8. Real Estate & Construction Positive

9. Telecom Positive

Manufacturing

10. Automotive Neutral

11. Capital Goods & Engineering Positive

12. Cement Positive

13. Consumer Goods Marginally Positive

14. Gems & Jewellery Negative

15. Leather Positive

16. Metals & Mining Positive

17. Oil & Gas Marginally Positive

18. Pharma & Healthcare Neutral/Negative

19. Power Positive

20. SMEs Marginally Positive

21. Textiles Neutral

Ratings:

Positive+ Predominantly positive proposals

Positive Positive proposals

Marginally Positive Positive proposals but not upto industry expectations

Neutral Negative proposals offsetting positive proposals

Negative Negative proposals impacting the sector


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Agriculture

The total plan outlay for agriculture & allied sector is to be increased by 19.79% to • ` 147.44 bn.

The target agricultural credit is proposed to be raised to • ` 4,750 bn in FY12 from ` 3,750 bn in FY11.

The Government raised the corpus of RIDF (Rural Infrastructure Development Fund) XVII to • ` 180 bn in FY12 from ` 160 bn in FY11 wherein the additional allocation would be dedicated to creation of warehousing facilities.

Interest subvention proposed to be enhanced from 2% to 3% 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 ` 30 bn in a phased manner.

`• 100 bn to be contributed to NABARD’s Short-term Rural Credit fund for FY12.

An allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased to • ` 78.60 bn in FY12 from ` 67.55 bn in FY11.

An allocation of • ` 17 bn for National Horticulture Mission including ` 5 bn for north east and Himalayan states.

An allocation of • ` 13.50 bn for National Food Security Mission.

An allocation of • ` 7.80 bn for Macro Management in Agriculture.

An allocation of • ` 11.50 bn for National Mission on Micro Irrigation.

An allocation of • ` 7 bn for National Agricultural Insurance Scheme including ̀ 1.50 bn for Modified national Agriculture insurance scheme.

An allocation of • ` 5.50 bn for integrated oilseeds, oil palms, pulses and maize development.

Removal of production and distribution bottlenecks for items like fruits and vegetables, milk, • meat, poultry and fish to be the focus of attention this year.

To improve rice based cropping system in the eastern region, an allocation of • ` 4 bn has been made.

An allocation of • ` 3 bn made to promote 60,000 pulses villages in rainfed areas.

An allocation of • ` 3 bn to bring 60,000 hectares under oil palm plantations - an initiative to yield about 3 lakh metric tonnes of palm oil annually in five years.

As an initiative on vegetable clusters, an allocation of • ` 3 bn made for implementation of vegetable initiative to provide quality vegetable at competitive prices.

An allocation of • ` 3 bn provided to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties.


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An allocation of • ` 3 bn provided for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.

The Government to promote organic farming methods, combining modern technology with • traditional farming practices.

An approval being given to set up 15 more Mega Food Parks during FY12.•

Augmentation of storage capacity through private entrepreneurs and warehousing corporations • has been fast tracked.

Capital investment in creation of modern storage capacity will be eligible for viability gap funding • of the Finance Ministry. It is also proposed to recognize cold chains and post-harvest storage as an infrastructure sub-sector.

In view of recent episode of inflation, need for State Governments to review and enforce a • reformed Agriculture Produce Marketing Act been recognised.

National Food Security Bill (NFSB) which will be introduced in the Parliament during the course of • the current year.

Extended full exemption from excise duty to air-conditioning equipment and refrigeration panels • for cold chain infrastructure.

Include conveyor belts in the full exemption from excise duty to equipments used in cold storages, • mandis and warehouses.

Basic customs duty reduced for specified agricultural machinery to 2.50% from 5% and the • concession is also being extended to parts of such machinery to encourage their domestic production.

Basic customs duty reduced on micro-irrigation equipment to 5% from 7.50%.•

De-oiled rice bran cake fully exempted from basic customs duty. Simultaneously, an export duty • of 10% to be levied on its export.

Positive+

The slew of measures announced for the agricultural sector highlights the Government’s thrust to facilitate storage and reduce the production and supply chain bottlenecks in the agricultural sector which played an important role in driving inflation in the economy. While establishing an efficient supply chain and removal of production and distribution bottlenecks, especially for food items which has led to inflation has received the Government’s focus during the budget, timely and effective implementation of the initiatives would not only help in reducing the price difference between the whole sale and the retail prices but also provide for better realisation of prices by the farmers. It would also help in combating supply side driven food inflation in the medium to long term. Moreover, if the Agriculture Produce Marketing Act is reformed as highlighted in the budget it would lead to further improvement in the supply chain linkages in the agricultural sector.


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In the budget the Government further enhanced its thrust to improve the storage facilities in the agriculture sector by allocating funds for creation of warehousing facilities. Facilitating for further private sector participation will ensure reduction in wastage of farm output, thereby enhancing greater food security going ahead. Moreover, in this budget there has been announcement of new initiatives such as accelerated Fodder Development Programme which bodes well for the sector.

While the Union budget for FY12 witnessed significant plan allocation, the Government also placed due emphasis on resolving the supply chain blockages in the agricultural sector which required serious attention besides, considerably stepping up the credit flow. It was also commendable that the Government placed emphasis on speedy implementation on various schemes under the RKVY and also recommended that the storage capacity through private entrepreneurs and warehousing corporations to be fast tracked.

Fertiliser

Capital investment in fertiliser production proposed to be included as an infrastructure sub-• sector.

Government actively considering extension of the Nutrient Based Subsidy (NBS) regime to • cover urea.

To ensure greater efficiency, cost effectiveness and better delivery for fertilisers, the • Government will move towards direct transfer of cash subsidy to people living below poverty line in a phased manner.

Extension of benefit of investment linked deduction to businesses engaged in the production • of fertilisers.

Positive

The overall outlook on the fertiliser sector remains positive. The major move in the sector which will drive investment is by including capital investment in fertiliser production as an infrastructure sub sector which will help to mitigate the risk of investing. Moreover, extending the benefits of investment linked deduction to businesses engaged in the production of fertilisers will increase the flow of capital in the sector. The government’s intention to move to a NBS of fertilisers not only bodes well for the industry but also promotes balanced use of fertiliser and would further link transparently the prices and subsidies to the composition of a product. Further, the proposed system of direct transfer of subsidy for fertilisers is seen as a good move as the domestic industry has long suffered from under recovery of cost and delay in disbursement of subsidy.


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Social Sector

The social sector expenditure is proposed to be increased to ̀ 1,608.87 bn during FY12 an increase of 17% over the previous year. It amounts to 36.40% of the total plan allocation.

Human Resource Development and Social Justice

An allocation of • ` 103.30 bn for Integrated Child Development Services.

An allocation made for Mahatma Gandhi National Rural Employment Guarantee Scheme • amounting to ` 400 bn in FY12 as compared to ` 401 bn in FY11.

An allocation of • ` 29.14 bn under the ‘Swaranjayanti Gram Swarozgar Yojana’ (SGSY) for establishing micro-enterprises in rural areas. At least 50% of the Swarozgaries will be SCs/STs, 40% women and 3% disabled. It has been decided to restructure SGSY into National Rural Livelihood Mission (NRLM).

To create in the course of the year “India Microfinance Equity Fund” with a corpus of • ` 1 bn with SIDBI. Government considering putting in place appropriate regulatory framework to protect the interest of small borrowers.

To empower women and promote their Self Help Groups (SHGs) creation of a “Women’s • SHG’s Development Fund” with a corpus of ` 5 bn.

Relaxation of exit norms under the pension scheme “Swavalamban” whereby a subscriber • under Swavalamban will be allowed to exit at the age of 50 years instead of 60 years or a minimum tenure of 20 years whichever is later. Moreover, proposal to extend the benefit of Government contribution from three to five years for all subscribers of Swavalamban who enroll during FY11 and FY12.

Under the on-going Indira Gandhi National Old Age Pension Scheme for BPL beneficiaries, • the eligibility for pension is proposed to be reduced from 65 years at present to 60 years. Further, for those who are 80 years and above, the pension amount is being raised from ̀ 200 at present to ` 500 per month.

Existing scheme of interest subvention of 1% on housing loan further liberalised.•

An allocation of • ` 5.20 bn for Indira Gandhi Matritva Sahyog Yojana.

The plan outlay for Women and Child Development is proposed to be increased to • ` 126.50 bn in FY12 from ` 110 bn in FY11.

An allocation of • ` 7.50 bn for Rajiv Gandhi Scheme for Empowerment of Adolescent Girls.

The plan outlay of the Ministry of Social Justice and Empowerment is proposed to be enhanced • to ` 53.75 bn in FY12, marking an increase of 19.40% as compared to FY11.

The plan allocation for the Ministry of Minority Affairs is proposed to be increased to • ` 28.50 bn for FY12 from ` 26 bn in FY11.


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Increase the budget allocation for primitive tribal groups to • ` 2.44 bn in FY12 from ` 1.85 bn in FY11.

For the first time, specific allocations are being earmarked towards Scheduled Castes Sub-• plan and Tribal Sub-plan.

Education

An allocation of • ` 520.57 bn in FY12 for education, which is an increase of 24% over FY11.

The proposal to increase the plan allocation for school education to • ` 389.57 bn in FY12 from ` 310.36 bn in FY11.

An allocation of • ` 210 bn for Sarva Shiksha Abhiyan which is 40% higher than ̀ 150 bn allocated in FY11. A revised Centrally Sponsored Scheme “Vocationalisation of Secondary Education” will be implemented from FY12 to improve the employability of the youth.

An allocation of • ` 103.80 bn for National Programme of Mid Day Meals in schools.

An allocation of • ` 52.54 bn for University Grants Commission; ̀ 56.60 bn for technical education and ` 9.43 bn for National Mission in Education through information & communication technology.

Connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber • backbone to be provided by March, 2012.

Additional • ` 5 bn proposed to be provided for National Skill Development Fund during FY12.

Introduce a scholarship scheme in FY12 for needy students belonging to the Scheduled Castes • and Scheduled Tribes studying in classes ninth and tenth which would benefit about 40 lakh Scheduled Caste and Scheduled Tribe students.

`• 500 mn each to upcoming centres of Aligarh Muslim University at Murshidabad in West Bengal and Malappuram in Kerala.

`• 1 bn as one-time grant to the Kerala Veterinary and Animal Sciences University at Pookode, Kerala.

`• 100 mn each for setting up Kolkata and Allahabad Centres of Mahatma Gandhi Antarrashtriya Hindi Vishwavidyalaya, Wardha.

`• 2 bn as one time grant to IIT, Kharagpur.

`• 200 mn for Rajiv Gandhi National Institute of Youth Development, Sriperumbudur, Tamil Nadu.

`• 200 mn for IIM, Kolkata, to set up its Financial Research and Trading Laboratory.

`• 2 bn for Maulana Azad Education Foundation.


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`• 100 mn for Centre for Development Economics and Ratan Tata Library, Delhi School of Economics, Delhi and ` 100 mn for Madras School of Economics.

Health & Sanitation

The plan allocation for the Ministry of Health and Family Welfare is proposed to be increased • to ` 267.60 bn in FY12 from ` 223 bn for FY11.

An allocation of • ` 178.40 bn for National Rural Health Mission.

The Rashtriya Swasthya Bima Yojana extended to cover unorganised sector workers in • hazardous mining and associated industries like slate and slate pencil, dolomite, mica and asbestos etc.

An allocation of • ` 93.50 bn for National Rural Drinking Water Programme.

An allocation of • ` 16.50 bn for rural sanitation

Regional Development

In order to boost development in the North Eastern Region and Special Category States, the • allocation for special assistance almost doubled to ` 80 bn for FY12 as compared to FY11. Out of this, ` 54 bn allocated as untied Special Central Assistance.

To give a boost to the development of backward regions, the allocation under the Backward • Regions Grant Fund increased to ` 98.90 bn in FY12 from ` 73 bn in FY11, an increase of over 35%.

The Government’s special support to Jammu & Kashmir is anchored in • ` 280 bn Prime Minister’s Reconstruction Plan. In addition, for the current year, about ` 80 bn has been provided for the State’s development needs.

Allocation made in FY12 to meet the infrastructure needs for Ladakh (• `1 bn) and Jammu region (` 1 bn).

Funds allocated under Integrated Action Plan (IAP) for addressing problems related to Left • Wing extremism affected districts. 60 selected Tribal and backward districts provided with 100% block grant of ` 250 mn and ` 300 mn per district during FY11 and FY12 respectively.

Positive+

By allocating 36.40% of the total plan outlay for the social sector during FY12, the Government has reiterated its emphasis for the upliftment of the weaker sections of the country. In order to enhance financial inclusion, a dedicated fund with a corpus of ̀ 1 bn have been created for smaller MFIs besides, forming a Women’s Self Help Group’s Development Fund which would enhance the empowerment of women.


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The Government has extended its thrust towards the development of education in the budget by enhancing the plan allocation by 24% over the previous budget. Emphasis has also been laid on developing vocational education to improve the employability of the youth in addition to making provision for National Skill Development Fund. The Government has also made special allocation for boosting higher education in the country.

While the senior citizens (BPL beneficiaries) have been given a special attention under the pension schemes, the Rashtriya Swasthya Bima Yojana has been extended to cover unorganised sector workers in hazardous mining and associated industries. The Government has also paid due attention for further development of the backward regions, allocating funds for the infrastructure needs for Ladakh and Kashmir besides directing funds for addressing problems related to Left Wing extremism affected districts. Moreover, for the first time, specific allocations have been earmarked towards Scheduled Castes Sub-plan and Tribal Sub-plan. Besides, the Government’s focus on drinking water, health and sanitation is another positive aspect for the social sector in this budget.

Infrastructure

An allocation of • ` 2,140 bn for infrastructure sector accounting for 48.50% of planned expenditure.

Capital investment in Fertiliser production to be classified as an infrastructure sub-sector.•

Designing of a comprehensive policy that can be used by the Centre and the State Governments • in further developing public-private partnerships under the National Capacity Building Programme.

Target for cumulative disbursement by India Infrastructure Finance Company Limited (IIFCL) • raised to ` 250 bn by March 31, 2012.

Additional deduction of • ` 20,000 for investment in long-term infrastructure bonds to be continued in FY12.

Permit to issue tax free bonds of • ` 300 bn by various Government undertakings including ` 100 bn by Indian Railway Finance Corporation (IRFC), ̀ 100 bn by National Highway Authority of India (NHAI), ` 50 bn by Housing and Urban Development Corporation Limited (HUDCO) and ` 50 bn by Ports in FY12.

FII limit for investment in corporate bonds, with residual maturity of over five years issued by • companies in infrastructure sector, raised by an additional limit of US$ 20 bn taking the total limit to US$ 25 bn.

Permit for FIIs to invest in unlisted bonds with a minimum lock-in period of three years with • permission to trade amongst themselves during the lock-in period.


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Creation of special vehicles in the form of notified infrastructure debt funds to attract foreign • funds for the infrastructure financing. Interest payment on the borrowings of these funds to be subject to a withholding tax rate of 5% instead of the current rate of 20%. The income on the fund would be exempt from tax.

Levy of Minimum Alternate Tax (MAT) on developers of Special Economic Zones (SEZs) and • units operating in SEZs.

Reduction in tax on dividend received by an Indian company from its foreign subsidiary to • 15%.

Ready mix concrete (RMC) to attract excise duty of 5%. The same would attract a concessional • rate of 1% without CENVAT credit.

Roads and Highways

Allocation of • ` 103.40 bn for National Highways Development Programmes (NHDP).

Full exemption from basic customs duty for bio-asphalt and specified machinery (including • tunnel-boring machines) for application in the construction of national highways.

Urban Infrastructure

Allocation under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) of • ` 125.20 bn for FY12 as against ` 116.20 bn in FY11.

Allocation of • ` 15.60 bn for FY12 towards equity investments for all Metro Rail Projects.

Proposal to take up the Delhi Metro Phase-III and the Mumbai Metro Line III in FY12.•

Financial assistance for ongoing Metro projects of Bengaluru, Kolkata and Chennai for speedy • implementation.

Rural Infrastructure

Total allocation under Bharat Nirman raised by • ` 100 bn to ` 580 bn for FY12.

Allocation of • ` 200 bn under Pradhan Mantri Gram Sadak Yojana (PMGSY) for FY12 as against ` 120 bn in FY11.

Creation of Mortgage Risk Guarantee Fund under Rajiv Awas Yojana (RAY) to guarantee • housing loans taken by EWS and LIG households and enhance their credit worthiness.

Enhancement of provisions under Rural Housing Fund to • ` 30 bn from existing ` 20 bn.

Backward Regions Grant Fund has been increased from • ` 73 bn to ` 98.90 bn amounting to an increase of over 35%.


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Outlays for Infrastructure Sector under Plan Expenditure

Major Components2010-11

(` bn)2011-12 (`bn)

Share in total 2011-12 (%)

Central Plan Outlay (Budgetary Support) on Infrastructure (including others)

Ministry of Civil Aviation 20.0 17.0 0.8

Ministry of Communication and IT 53.2 72.2 3.4

Ministry of Power 106.3 96.4 4.5

Ministry of Road Transport and Highways 180.0 200.0 9.3

Department of Rural Development 661.0 741.0 34.6

Department of Drinking Water Supply 105.8 110.0 5.1

Ministry of Urban Development 54.6 62.8 2.9

Railways 158.8 200.0 9.3

Central Assistance for States/UTs on Infrastructure (including others)

Accelerated Irrigation Benefit Programme and other water source programmes

115.0 126.2 5.9

MPs Local Area Development Scheme 18.5 21.8 1.0

Roads & Bridges 18.2 21.6 1.0

Backward Region Grant Fund 73.0 98.9 4.6

JNNURM 116.2 125.2 5.9

Additional Central Assistance for other projects 10.0 10.0 0.5

Total spending on infrastructure 1,735.5 2,140.0

Positive+

The plan expenditure for infrastructure sector to constitute around 48.50% of total plan outlay for FY12 – a growth of 23.03% over the Union Budget 2010-11, indicating an increased thrust on the sector. Over 11% rise in budgetary allocation on road transport & highways is expected to encourage the transportation and logistics sector in India.

To boost non-banking financial avenues for infrastructure companies, the Budget provides thrust through various financing schemes. Since most of the infrastructure companies are organised in the form of SPVs, FIIs would also now be permitted to invest in unlisted bonds with a lock-in of three years. A rise in the cap of FII investment in corporate bonds with residual maturity of five years, issued by infrastructure companies, to US$ 25 bn from US$ 20 bn would also provide impetus to the infrastructure development. Additionally, allowing for tax free bonds to the tune of ` 300 bn by various Government undertakings including IRFC, NHAI, HUDCO and Ports would further support infrastructure financing.

Reduction in taxation on foreign dividend, of Indian companies to help infrastructure companies repatriate money back in the country. However, MAT on SEZ developers to be a negative.

Given the increased plan outlay corroborated with facilitation through increased financing avenues for infrastructure sector, we rate the budget to be significantly positive for the sector.


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Services

Banking, Financial Services and Insurance (BFSI)

Banking

Banking Licenses

In order to enable the provision of additional banking licenses to private sector players, some • amendments in the Banking Regulation Act will be brought in FY12. Guidelines for banking licenses will be issued by the Reserve Bank of India (RBI) before the close of this financial year.

Agricultural and Rural Finance

The target for credit flow to farmers has been raised from • ` 3,750 bn in FY11 to ` 4,750 bn in FY12. Banks have been asked to step up direct lending for agriculture and credit to small and marginal farmers.

The existing interest subvention scheme of providing short term crop loans to farmers at 7% • interest has been extended to FY12. The additional subvention incentive has been enhanced to 3% in FY12 from 2% in FY11.

Financial Inclusion

In the last budget, banks were advised to provide banking facilities to habitations having • a population of over 2,000 by March, 2012. Of the 73,000 such habitations identified by banks for providing banking facilities using appropriate technologies, 20,000 will be covered in 2010-11 and the remaining in FY12.

A multi-media campaign, “Swabhimaan”, has been launched to inform, educate and motivate • people to open bank accounts.

Cash dispensers have been fully exempted from basic customs duty. Full exemption has also • been extended to parts of such machines to encourage their domestic production.

Housing Credit

The existing scheme of interest subvention of 1% on housing loans has been further liberalised • by extending it to housing loan upto `1.50 mn where the cost of the house does not exceed ` 2.50 mn from the present limit of ` 1 mn and ` 2 mn respectively.

The existing housing loan limit for dwelling units under priority sector lending has been • enhanced from ` 2 mn to ` 2.50 mn.


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The provision under Rural Housing Fund has been enhanced from • ` 20 bn to ` 30 bn.

A Mortgage Risk Guarantee Fund will be created under Rajiv Awas Yojana to guarantee • housing loans taken by Economically Weaker Sections (EWS) and Low Income Group (LIG) households, to enhance their credit worthiness and enable flow of credit.

To prevent frauds in loan cases involving multiple lending from different banks on the • same immovable property, the Central Electronic Registry under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002 will become operational by March 31, 2011.

Capital Support and Funding

A sum of • ` 60 bn has been allocated for FY12, to enable Public Sector Banks (PSBs) to maintain a minimum Tier I Capital to Risk Assets Ratio (CRAR) at 8%. This is in addition to the infusion of ` 201.57 bn in PSBs being done in FY11.

As a part of financial strengthening of Regional Rural Banks (RRBs), an amount • ` 5 bn will be provided to RRBs during FY12 to enable them to maintain a CRAR of at least 9% as on March 31, 2012.

The capital base of National Bank for Agriculture and Rural Development (NABARD) will be • strengthened by infusing ` 30 bn, in a phased manner, as Government equity, raising its paid-up capital to ` 50 bn.

A contribution of • ` 100 bn will be made to NABARD’s Short-term Rural Credit Fund in FY12, to enable NABARD to refinance the short-term crop loans of the cooperative credit institutions and RRBs at concessional rates. This contribution will be made from the shortfall in priority sector lending by Scheduled Commercial Banks.

An India Microfinance Equity Fund of • ` 1 bn is proposed to be set up with the Small Industries Development Bank of India (SIDBI), for providing equity to smaller Micro Finance Institutions (MFIs).

A Women’s Self Help Groups (SHGs) Development Fund with a corpus of • ` 5 bn is proposed to be set up to promote the interests of SHGs.

The corpus of the Infrastructure Development Fund (RIDF) will be raised from • ` 160 bn to `180 bn. The additional allocation would be dedicated to creation of warehousing facilities.

`• 50 bn to be provided to SIDBI for refinancing incremental lending by banks to Micro and Small enterprises.

`• 30 bn will be provided to NABARD in phases for Handloom Weavers Cooperative Societies.


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Positive+

The budget is expected to have a positive impact on the Banking industry. A number of measures were announced towards enabling better flow of credit to various sectors, including agriculture, housing and small & medium enterprises (SMEs), which is expected to encourage overall credit growth in FY12. The guidelines for grant of additional banking licenses are also expected to be issued in FY12, adding to the competition in the industry.

In addition, the budget emphasised the financial strengthening of PSBs and RRBs. The allocations made towards capital infusion in PSBs and RRBs is expected to bring more stability to the sector. Also, other initiatives like setting up of the Central Electronic Registry and Mortgage Risk Guarantee Fund will help the industry in reducing risk.

Overall, the budget is likely to have a positive impact on the Banking Industry by boosting credit growth and supporting capital base of banks.

Finance

Fiscal Consolidation

The Central Government to introduce an amendment to the FRBM Act, laying down the fiscal • road map for the next five years.

The Government has been in the process of setting-up an independent Debt Management • Office in the Finance Ministry. The Public Debt Management Agency of India Bill to be proposed in the parliament in the next financial year.

Taxation

The Direct Tax Code (DTC) proposed to be effective from April 1, 2012.•

The exemption limit for the general category of individual taxpayers increased from • `1,60,000 to ` 1,80,000.

Age limit for senior citizens reduced from 65 years to 60 years, and exemption limit enhanced • from ̀ 2,40,000 to ̀ 2,50,000. A new category of Very Senior Citizens, eighty years and above, introduced, who will be eligible for a higher exemption limit of ` 5,00,000.

Rate of taxation on dividends received by an Indian company from its foreign subsidiary • reduced to 15%.

Current surcharge of 7.50% on domestic companies, reduced to 5%. Additionally, the rate • of Minimum Alternate Tax (MAT) increased from the current rate of 18% to 18.50% of book profits to keep the effective rate of the MAT at the same level.

Inclusion of additional services such as hotel accommodation, air-conditioned restaurants serving • liquor, air travel, life insurance, legal services to business entities, in the service tax net.


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Investment Environment

Discussions are underway to further liberalise the FDI policy.•

SEBI registered Mutual Funds allowed to accept subscriptions from foreign investors who • meet the KYC requirements for equity schemes, enabling direct access to foreign investors. Earlier, only FIIs and sub-accounts registered with the SEBI and NRIs were allowed to invest in Indian mutual funds.

Black Money

Emphasis on Tax Information Exchange Agreements (TIEAs) and 13 new Double Taxation • Avoidance Agreements (DTAAs).

A comprehensive national policy to strengthen controls over prevention of trafficking and • improve the management of narcotic drugs and psychotropic substances to be introduced.

Others

An amendment proposed to the Indian Stamp Act. Introduction of a new scheme with an • outlay of ` 3 bn to provide assistance to States to modernise their stamp and registration administration and roll out e-stamping in all the districts in the next three years.

Marginally Positive

On the financial front, the budget did not have any major announcements. Individuals and corporates are expected to be marginally benefitted by the increased exemption limit and reduced taxation on foreign dividends. The mutual fund industry will be benefitted by opening up to direct foreign investors. Also, initiatives towards increasing transparency in the sector would help boost investor confidence.

Overall, the budget is expected to have only a marginally positive impact on the sector.

InsuranceProposal to move Insurance Laws (Amendment) Bill and LIC Amendment Bill in the current • session.

Services provided by life insurance companies in the area of investment are also proposed to • be brought into service tax net on the same lines as ULIPs.

The Rashtriya Swasthya Bima Yojana (RSBY) to be extended to cover unorganised sector • workers in hazardous mining and associated industries like slate and slate pencil, dolomite, mica and asbestos etc.


18

Positive

Announcements made in the budget towards proposed amendment to Insurance laws and LIC Bill is a big step in the sector’s reform process. The insurance legislation proposes to increase the FDI limit to 49% from the current 26%. Also, the share capital of Life Insurance Corporation (LIC) is proposed to be revised to ` 1 bn from its current ` 5 mn. The increased FDI ceiling can bring in the much-needed capital for the growth of the sector and its long-term development.

Overall, the announcements made in the budget would have a positive impact on the insurance sector, boosting investments and growth.

Hospitality

It is proposed that the hotel accommodation in excess of • ` 1,000 per day with an abatement of 50% so that the effective burden is 5% of the amount charged for levying Service Tax.

It is proposed that the services provided by air conditioned restaurants, that have license to • serve liquor giving an abatement of 70% will have an effective burden of 3% of the bill.

It is proposed to increase the service tax on air travel both domestic and international by • ` 50 and ` 250 respectively on travel by economy class. The tax travel by higher classes on domestic sector will be charged at 10%.

Standard rate of service tax retained at 10%, while seeking a closer fit between present • regime and its GST successor.

Negative

The introduction of service tax on hotels, air conditioned restaurants as well as increasing the same on air travel is a negative for the overall hospitality sector. With the introduction of 5% and 3% effective burden on hotels accommodation and air conditioned restaurants serving liquor respectively, billing amount to the customers will increase thereby impacting the overall business in the hotel industry. Further, rise in service tax on domestic as well as international air travel and introduction of 10% tax in the domestic higher class travel will increase the overall cost of air travel putting a negative impact on the aviation sector. The overall outlook on Indian hospitality sector remains negative as it will witness a decline in demand due to the increase in service tax which will make the services in the sector comparatively less affordable to the end user.

IT & ITeS

Minimum Alternative Tax (MAT) to be levied on units operating in Special Economic Zones • (SEZ).

MAT rates to be hiked from 18% to 18.50% while surcharge is reduced from 7.50% to 5%.•

Excise duty on parts of ink jet and laser jet printers reduced from 10% to 5%.•


19

Excise duty of 5% has been imposed on specified IT products such as microprocessor other • than motherboards, floppy disc drives, CD-Rom drive.

Full exemption is provided for components of computer connectivity cable imported for its • manufacture.

Full exemption on payment of additional duty of customs on packaged/canned software.•

Negative

The Government has announced in the budget to levy MAT on companies which are operating in SEZs from FY12. It is expected to significantly impact IT companies which had exemptions from MAT under the SEZ scheme. The budget also makes no mention of the extension of the sunset clause under the Software Technology Park of India (STPI) Act, related to deduction in respect of export profits beyond FY11. The levying of MAT and non-extension of STPI Act beyond FY11 is expected to negatively impact the IT sector as profit margins of IT companies (especially small and medium) who enjoyed tax exemptions under the above mentioned schemes is expected to come down. The non-STPI based IT companies and those IT companies which are not operating from SEZ are not expected to be impacted by this budget. Overall, the additional tax burden is expected to have a negative impact on the IT & ITeS sector.

Media & Entertainment

The concessional basic customs duty of 5% and CVD of 5%, presently applicable to high-• speed printing presses imported by newspaper establishments is extended to mailroom equipment.

Jumbo rolls of cinematographic film fully exempted from CVD by providing full exemption • from excise duty.

Expand the raw material list for manufacture of specified electronic components that are • fully exempt from basic customs duty.

Marginally Positive

The concession extended to mailroom equipment is expected to help the print media industry and boost imports. The duty exemption on jumbo rolls of cinematographic film will make them cheaper as currently the industry is solely dependent on import of these rolls.

The expansion of raw material list for specified electronic components from basic customs duty will make the optical drives such as combo drives, CD-ROM drives, parts of DVD drive or DVD writer etc. cheaper thereby helping the entertainment industry.

Overall, the announcements in the Budget is expected to have a marginally positive impact on the sector.


20

Real Estate and Construction

Investment linked deduction to businesses which develop affordable housing under a notified • scheme proposed.

Existing scheme of interest subvention of 1% on housing loan further liberalised on home • loans of upto ` 1.50 mn from the current limit of ` 1 mn.

The existing housing loan limit for dwelling units under priority sector lending enhanced from • ` 2 mn to ` 2.50 mn.

Provision under Rural Housing Fund enhanced to • ` 30 bn from the existing ` 20 bn.

Tax free bonds of • ` 50 bn to be issued by HUDCO in FY12.

MAT to be levied on developers of the Special Economic Zones (SEZs) as well as units operating • in SEZs to ensure equal sharing of corporate tax liability.

To enhance credit worthiness of economically weaker sections and LIG households, a • Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana (RAY).

Basic customs duty on two critical raw materials of cement industry viz. petcoke and gypsum • proposed to be reduced to 2.50%.

Positive

The Budget’s focus on providing low-cost and affordable housing is laudable. The enhanced limit for interest subvention and increase in the priority sector lending limit are expected to benefit buyers in tier-II, III cities and towns. The aforementioned measures may encourage private developers to invest in affordable housing projects. The incentives given to the construction sector is likely to have a multiplier effect on the economy via growth in downstream sectors and increase in employment. Overall the Budget is positive for the sector.

Telecom

Budget allocation for Bharat Nirman programme, which includes Rural Telephony, has been • increased by ` 100 bn from FY11 to ` 580 bn in FY12.

Plan to provide Rural Broadband Connectivity to all 250,000 Panchayats in the country in • three years.

Connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber • backbone to be provided by March 2012 under the National Knowledge Network (NKN) policy.

Extension in the concession available to parts, components and accessories for manufacture • of mobile handsets till March 31, 2012.

Allocation of • ` 21 bn for the schemes under Universal Services Obligation Fund (USOF).


21

Allocation of • ` 10 bn for optical fibre cable based network for the defence service.

Rate of Minimum Alternative Tax (MAT) proposed to be increased from 18% to 18.5% of book • profits.

Current surcharge of 7.5% on domestic companies proposed to be reduced to 5%.•

Lower rate of 15% tax on dividends received by an Indian company from its foreign subsidiary.•

Positive

The overall outlook for the telecom sector remains positive. The announcements for the sector were aimed to develop the communication in rural India. Increase in government investment through Bharat Nirman, rural broadband connectivity, NKN and USOF will boost the overall telecom infrastructure in rural India resulting in widening the business of telecom companies which is positive for the overall telecom sector.

Mobile equipment manufacturer will benefit from the announcements made in the budget with the extension of concession available to parts, components and accessories for one more year. Decrease in the surcharge on domestic companies to 5% will be seen as a positive impact towards the sector. Whereas, increase in MAT by 0.5% will have a marginally negative impact on the sector. Nonetheless, lower rate of 15% tax on dividends received by an Indian company from its foreign subsidiary will bring back the funds to the Indian telecom sector.

Manufacturing

Automotive

A National Mission for Hybrid and Electric Vehicles to be launched in collaboration with all • stakeholders.

Full exemption from basic customs duty and special countervailing duty (CVD) on specified parts • of hybrid vehicles. Further, prescription of a concessional rate of excise duty of 5% on specified parts (such as battery pack, battery charger, AC/DC electric motors and motor controllers).

Full exemption from basic customs duty on batteries imported by manufacturers of electrical • vehicles.

Reduction in the excise duty from 10% to 5% on the kits (and their parts) for converting fossil fuel • vehicles into hybrid vehicles.

Concessional excise duty of 10% on vehicles based on fuel cell or hydrogen cell technology.•

Concessional rate of excise duty at 10% on factory-built ambulances. Further, refund-based • concession to vehicles up to a seating capacity not exceeding 13 persons (including the driver).


22

Neutral

The Budget announcements for the auto sector are aimed at its long term development, with a focus on clean technology. We do not expect these announcements to have any significant impact in the short term, considering the fact that hybrid/electric vehicles have a meagre share in domestic vehicle sales. From a long term perspective, these measures are expected to encourage local manufacturing and consumption of hybrid/electric vehicles in the country.

Increased allocation to the infrastructure and defence sectors could indirectly benefit manufacturers of commercial vehicles such as Tata Motors and Ashok Leyland. Revision of wage rates under the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) and the Government’s continued thrust on rural development are encouraging factors for boosting demand for two-wheelers in the rural and semi-urban areas. The reduction in excise duty (from 10% to 5%) and full exemption of special CVD on LED is expected to bring down production costs of companies manufacturing LED lights for automobiles.

The announcements would favour hybrid/electric vehicle manufacturers, though only in the long term, when vehicle prices fall sharply. Since such vehicles have a miniscule share in total demand, from a short-to-medium term perspective, the Budget announcements would have a neutral impact on the industry.

Capital and Engineering Goods

Concessional customs duty of 5% on specified agricultural machinery to be reduced further to • 2.50% and the same is extended to parts of such machinery.

Capital investment in fertiliser production proposed to be included as an infrastructure sub-• sector.

Reduction of the basic customs duty on micro-irrigation equipment from 7.50% to 5%.•

Capital investment in creation of modern storage capacity will be eligible for viability gap funding • of the Finance Ministry. Cold chains and post-harvest storage to be included as an infrastructure sub-sector.

Full exemption from excise duty to air-conditioning equipment and refrigeration panels for cold • chain infrastructure.

Full exemption from excise duty to equipment used in cold storages, mandis and warehouses.•

Exemption from import duty for spares and capital goods required for ship repair units extended • to import by ship owners.

Concessional basic customs duty of 5% and countervailing duty of 5% applicable to high-speed • printing presses is extended to mailroom equipment.

Full exemption from basic customs duty is being extended to tunnel boring machines, bio-asphalt • and specified machinery for its application in the construction of national highways.


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Parallel excise duty exemption for domestic suppliers producing capital goods needed for expansion • of existing mega or ultra mega power projects.

Positive

Several positive measures focusing agricultural and related sectors were announced, including reduced customs duty on specified agricultural machinery and micro-irrigation equipment. Apart from this, cold storages commanded a whole bunch of duty exemptions.

The Union Budget FY12 also outlines the importance of the infrastructure sector with greater emphasis on capital investment required in construction of national highways and mega or ultra mega power projects. Huge mismatch in demand and supply of power sector would claim for setting up more power projects, a positive trigger for capital goods. There has been increase in defence expenditure with simultaneous increase in capital expenditure to be made for defence services. These allocations will provide boost to capital goods and engineering industry in FY12.

Overall, the budget is anticipated to positively contribute to the growth of the Capital Goods and Engineering sector. Cement

The existing excise duty rates have been proposed to be replaced with composite rates having • an ad valorem and specific component with some rationalisation.

The basic customs duty on two critical input materials of this industry viz. pet coke and • gypsum is proposed to be reduced to 2.50% from 5%.

A tariff rate of 5% excise duty is being prescribed on Ready-mix concrete (RMC). However, • these goods would attract the concessional 1% duty without CENVAT credit facility.

Positive

Cement sector has a complex duty structure with both excise duty and ad valorem duty in place primarily to control the prices. The current step of simplification and rationalisation of the duty structure is likely to have a positive impact on the industry. Further, the reduction in basic customs duty for pet coke and gypsum is likely to have a positive impact on the cement input prices leading to an expected boost in the profitability of the sector. The 1% hike in the excise duty of RMC has been offset by 1% concessional duty which implies that it is unlikely to have a significant impact on the overall cement sector.

Demand of cement is likely to be boosted owing to several positive proposals in the infrastructure sector like increase in infrastructure spending by 23%, proposed tax free bonds to the tune of `300 bn for development of railways, national highways, ports and HUDCO. This is likely to boost cement supply which was facing capacity utilisation woes in the past.


24

Consumer Goods

130 items, mainly in the nature of consumer goods including coffee, sauces, instant food • mixes, tooth powder, pencils, crayons, etc., that earlier attracted value-added tax but were exempt from central excise duty will now attract 1% central excise duty. Cenvat credit would not be available to the manufacturer of these items.

Proposal to enlarge the scope of exemptions under the package of measures to incentivise • food processing by providing full exemption from excise duty to air-conditioning equipment and refrigeration panels for cold chain infrastructure and conveyor belts used in cold storages, mandis and warehouses.

Full exemption from basic customs duty is being provided to crude palm stearin for use in the • manufacture of laundry soap to promote laundry soaps which conserve water and are gentle on the soil.

Reduction in basic customs duty on bamboo for agarbatti from 30% to 10%.•

Concessions available to parts, components and accessories of mobile handsets in the form • of exemptions from basic countervailing duty and special additional duty are being extended till March 31, 2012.

Reduction of excise duty on parts of ink-jet and laser-jet printers from 10% to 5%.•

Marginally Positive

Union Budget FY12 can be termed as marginally positive for the consumer goods sector. Enhancement of the exemption limit for the general category of individual taxpayers is expected to leave the consumers with a higher disposable income adding to the demand for consumer goods.

The reduction in central excise duty on parts of ink-jet and laser-jet printers is likely to result in a fall in prices of these products. The extension of concessions available to parts, components and accessories for manufacture of mobile handsets has been extended till March 31, 2012 which is likely to result in stability of price of the product. Increased thrust on measures to incentivise food processing is likely to have positive impact on the processed food category of the consumer goods sector in medium to long term period.

In the medium term the consumer goods sector is expected to remain buoyant on the backdrop of positive announcements in the current budget coupled with strong domestic consumption. Negative announcements of withdrawal of exemption on 130 items from central excise and slight increase in the minimum alternate tax rate are likely to have a marginally negative impact on the sector. However, on the overall basis, current budget is marginally positive for the consumer goods sector.


25

Gems & Jewellery

A nominal central excise duty of 1% is being imposed on 130 items to bring them under tax • net. These items will include jewellery and articles of gold, silver and precious metals that are sold under a brand name. No Cenvat credit would be available for the manufacture of these items.

Special Economic Zones (SEZs) developers and units to come under Minimum Alternate Tax • (MAT)

Negative

Although the levy will not apply to precious metals and stones, the jewellery and articles of gold, silver and precious metals that are sold under a brand name will come under this levy. This is expected to make the branded jewellery costly. Further, the levy of MAT on SEZs and units operating in such SEZs will affect the margins on the gems and jewellery units operating out of SEZs.

Overall, the additional tax burden is expected to have a negative impact on the gems and jewellery sector.

Leather

Proposal to extend the Mega Cluster Scheme for development of leather products.•

Seven mega leather clusters would be set up during the year FY12. •

To encourage use of green processes, full exemption from basic excise duty is being proposed • to enzyme based preparations for pre-tanning.

Positive

The cluster development initiative may surely be a positive for the leather industry viewed from the perspective of organising the leather industry in a structured manner. This may lead to enhanced quality, price and trading as has been the experience with other clusters.

The announcements made in the budget would have an overall positive impact on the leather sector, particularly in the medium term.

Metals & Mining

Proposal to enhance the rate of export duty for all types of iron ore and unify it at 20% ad • valorem.

Full exemption from export duty is being proposed on iron ore pellets to encourage the value • addition process for fines.


26

Proposal to fully exempt stainless steel scrap from basic customs duty.•

A Group of Ministers is proposed to be set up to consider all issues relating to reconciliation • of environmental concerns emanating from various departmental activities including those related to infrastructure and mining.

Proposal to further extend Rashtriya Swasthya Bima Yojana to cover unorganised sector • workers in hazardous mining and associated industries like slate and slate pencil, dolomite, mica and asbestos etc.

Positive

A higher budgetary allocation for the infrastructure would have positive implications for the metals sector driven by demand for core metals like steel, iron, copper etc. Enhancement of iron ore duty may be construed as negative for iron ore industry and positive for the steel industry, and hence overall neutral for the metals sector. Proposal to fully exempt stainless steel scrap from basic customs duty would also be positive for the steel industry. Including the sector under the health and insurance benefits would be an overall positive due to enhanced security of workers of the included sector.

The announcements made in the budget would have an overall positive impact on the metals sector, particularly in the medium term.

Oil & Gas

Direct transfer of cash subsidy to people living below poverty line in a phased manner for • better delivery of kerosene and LPG. Task force set up to work out the modalities for the proposed system.

Rate of Minimum Alternative Tax (MAT) proposed to be increased from 18% to 18.50% of • book profits.

Marginally Positive

After declining along with oil prices in FY10, petroleum subsidies have again started to rise. Petroleum subsidies are budgeted to increase to an enormous ` 236.40 bn in FY12 as against ` 31.08 bn budgeted in FY11. While this certainly renews concerns about the fiscal costs, the proposal to directly transfer cash subsidy in the case of kerosene and LPG is positive and long-awaited.

Kerosene subsidy in India is badly targeted and a sizeable portion of subsidised kerosene supplies is illegally diverted either to non-subsidised sectors or resold to households (at prices higher than the subsidy price). The cash transfer programme is likely to ensure that kerosene subsidies reach the intended recipients, thereby eliminating the opportunity for profiteering and corruption.


27

With global crude oil prices surpassing the US$ 100 per barrel, a customs duty waiver on crude oil and a reduction in excise duties on petroleum products was widely anticipated in order to lower the financial burden of oil companies. In the absence of these announcements, the oil & gas industry will have a marginally positive impact from the current Budget.

Pharmaceuticals & Healthcare

Pharmaceuticals

Planned allocation to the Ministry of Health & Family Welfare increased by 20% to • ` 267.60 bn during FY12.

Weighted deductions on payments made for scientific research to National Laboratories, • Universities and Institutes of Technologies increased from 175% to 200%.

Minimum Alternative Tax (MAT) to be levied on units operating in Special Economic Zones • (SEZ).

Basic customs duty on lactose for the manufacture of homeopathic medicines reduced from • 25% to 10%.

Existing exemptions from excise duty on medicinal grade hydrogen peroxide and anaesthetics • is withdrawn and excise duty of 1% without cenvat credit will be applicable.

Concessional rate of 5% of basic customs duty is being provided on four live saving drugs, • with no additional duty of customs on bulk drugs used in the manufacture of said drugs.

Neutral

The increase in the weighted deductions for scientific research is expected to promote R&D activities in the pharmaceutical industry. On the other hand, there was no mention of the extension of the sunset clause related to the Export Oriented Units (EOU) which provided tax exemption to export oriented companies. Moreover, MAT will be levied on those pharmaceutical companies which were earlier exempted under the SEZ scheme. Thus, the overall benefit from increased weighted deductions in R & D is expected to be offset by higher tax burden for the pharmaceutical sector.

Healthcare

Hospitals with more than 25 beds and diagnostic service providers will be levied service tax • of 10%. However, there is a 50% rebate on it, which will bring the effective service tax rate to 5%. All Government hospitals will be outside this levy.

The existing exemption on surgical rubber gloves or medical examination gloves is withdrawn • and would now attract 1% duty without cenvat credit facility.

Import duties on specified raw material for manufacturing syringes and needles reduced • from 5% to 4%.


28

Negative

The expected hike in medical expenses of individuals on account of the effective 5% service tax on hospitals and diagnostic will prove detrimental for the non-Government companies in the healthcare sector. The reduction in import duty for raw materials which are used for manufacturing syringes and needles is more likely to be offset by the additional 1% excise duty on surgical gloves for hospitals. Overall, we expect the levy of service tax to negatively impact the healthcare sector.

Power

Budget allocation for Bharat Nirman programme proposed has been increased by • ` 100 bn from FY11 to ` 580 bn in FY12. ` 60 bn has been allocated towards Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) under the Bharat Nirman programme.

Parallel excise duty exemption for domestic suppliers producing capital goods needed for • expansion of existing mega or ultra mega power projects.

Allocation of • ` 20.34 bn towards Restructured Accelerated Power Development and Reforms Programme (RAPDRP).

Allocation of • ` 8.13 bn towards the National Hydro Electric Power Corporation (NHPC).

Allocation of • ` 10.25 bn towards Bharatiya Nabhikiya Vidyut Nigam Ltd.

Allocation of • ` 27.35 bn towards research and development as well as ` 10.47 bn towards industries sector projects under atomic energy.

`• 2 bn proposed to be allocated for 10 year Green India Mission and ` 2 bn for launching Environmental Remediation Programmes from National Clean Energy Fund (NCEF).

Basic customs duty on solar lantern reduced from 10% to 5%.•

Basic customs duty on a few more inputs used in the manufacture of solar modules/cells is • being reduced to nil.

Rate of Minimum Alternative Tax (MAT) proposed to be increased from 18% to 18.50% of • book profits.

Current surcharge of 7.50% on domestic companies proposed to be reduced to 5%.•

Lower rate of 15% tax on dividends received by an Indian company from its foreign subsidiary.•

Positive

The overall outlook on the power sector remains positive plus. The overall focus of the Government was towards widening the renewable energy generation and usage in India through the investment in NHPC, NCEF, reduction of customs duty on solar lantern to 5% and 0% on a few more inputs used in the manufacture of solar modules/cells. Parallel excise duty exemption for


29

domestic suppliers producing capital goods needed for mega or ultra mega power projects would increase the demand in domestically produced equipment instead of imported one. Further, investment in rural electrification has been increased under RGGVY indicating a positive impact on the power sector.

Decrease in the surcharge on domestic companies to 5% will be seen as a positive impact towards the sector. Whereas, increase in MAT by 0.50% will have a marginally negative impact on the sector. Nonetheless, lower rate of 15% tax on dividends received by an Indian company from its foreign subsidiary will bring back the funds to the domestic power sector.

SMEs

`• 50 bn to be provided to SIDBI for refinancing incremental lending by banks to SMEs.

The Mega Cluster Scheme extended for development of leather products. Seven mega leather • clusters to be set up during FY12.

Jodhpur to be included for the development of a handicraft mega cluster.•

A new scheme is also being introduced by which units in SEZs will be able to obtain tax-free • receipt of services wholly consumed within the zone and get their refunds in a much easier manner.

The current surcharge of 7.50% on domestic companies reduced to 5%.•

Marginally Positive

With access to credit being one of the key challenges faced by SMEs, the increase in outlay for SIDBI is a welcome step. Lowering of the surcharge tax limit on corporate tax may give SMEs some additional capital that can be used for further expansions. The cluster-based approach for developing SMEs is also a step in the right direction. The resolve to implement Goods and Service Tax will particularly be of benefit to SMEs as it will synchronise the sale of goods across the country and simplify taxation.

On the overall basis, current budget is marginally positive for the SME sector.

Textiles

Excise duty at a unified rate of 10% on branded readymade garments (RMG) and made-ups • of textiles (Full SSI exemption to be extended to these products). The tariff value for charging duty on RMG and textile made-ups would be at the rate of 60% of the retail sale price.

Laminated jute bags to attract excise duty of 1%.•

Reduction in basic customs duty on raw silk (not thrown) from 30% to 5%.•


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Reduction in central excise duty on sanitary napkins, and baby and adult diapers from 10% • to 1%.

Reduction in basic customs duty on certain specified inputs for manufacture of certain • technical fibre and yarn from 7.50% to 5%.

Provision of • ` 30 bn to the National Bank for Agriculture and Rural Development (NABARD) for handloom weaver cooperative societies.

Neutral

The mandatory levy of excise duty on branded readymade garments and textile made-ups would result in increased cost burden to the manufacturers who are already reeling under the impact of rising cotton prices. However, manufacturers are likely to pass on the increased burden to the consumers by way of hike in prices.

On the positive front, a reduction in the basic customs duty on raw silk would make imports cheaper. The reduction in duty is expected to result in increased imports, mainly from China, and help in partially bridging the demand-supply gap for raw silk in the domestic market. Reduction in excise duty on certain technical textile products (sanitary napkins, and baby and adult diapers), and cut in basic customs duty on certain inputs would benefit textile manufacturers.

Reduction in excise duty from 10% to 5% on parts of 40 specified textile machinery and equipments is expected to encourage modernisation of plants among textile manufacturers. Provision of ` 30 bn to NABARD would help in the upliftment of the handloom weavers.

The positive announcements made for the textiles industry would negate the negative announcement on the apparel sector. Hence, the overall Budget announcements would have a neutral impact on the overall industry.


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CHANGE IN CENTRAL PLAN OUTLAY

(` bn)2010-11 2011-12

% ChangeRevised Estimates Budget Estimates

Min. of Rural Development 895.78 878.00 -1.98

Min. of Petroleum and Natural Gas 700.88 748.52 6.80

Min. of Power 456.68 663.83 45.36

Railways 402.18 565.89 40.71

Min. of Human Resource Development 438.36 520.60 18.76

Ministry of Shipping 66.76 65.25 -2.26

Ministry of Road Transport and Highways 262.10 275.00 4.92

Min. of Communications and Information Technology 162.16 243.00 49.85

Min. of Health and Family Welfare 215.18 267.60 24.36

Min. of Civil Aviation 67.31 90.71 34.76

Min. of Agriculture 140.49 136.62 -2.75

Min. of Women and Child Development 103.70 126.50 21.99

Min. of Coal 83.88 93.03 10.91

Department of Atomic Energy 76.28 100.12 31.25

Min. of Urban Development 85.19 80.54 -5.46

Min. of Finance 99.97 98.95 -1.02

Min. of Textiles 47.25 50.00 5.82

Min. of Social Justice and Empowerment 43.00 53.75 25.00

Min. of Commerce and Industry 27.30 33.00 20.88

Min. of Mines 11.29 15.89 40.74

Min. of Micro, Small and Medium Enterprises 27.25 32.50 19.27

Min. of Environment and Forests 22.00 23.00 4.55

Min. of Minority Affairs 25.00 28.50 14.00

Min. of Labour and Employment 12.27 13.00 5.95

Min. of Information and Broadcasting 8.50 8.61 1.29

Min. of External Affairs 8.25 8.00 -3.03

Min. of Food Processing Industries 4.00 6.00 50.00

^^ In Budget 2008-09 Department of Shipping was under the Ministry of Shipping, Road Transport and Highways.


32

RECEIPTS

(`bn)2010-11

Revised Estimates2011-12

Budget Estimates

REVENUE RECEIPTS

Tax Revenue

Gross Tax Revenue 7,868.88 9,324.40

Union Excise Duties 1,377.78 1,641.16

Customs 1,318.00 1,517.00

Corporation Tax 2,963.77 3,599.90

Income Tax 1,490.66 1,720.26

Service Tax 694.00 820.00

Taxes of the Union Territories 19.10 19.73

Wealth Tax 5.57 6.35

Less NCCD transferred to the National Calamity Contingency Fund/NDRF

39.00 45.25

Less States' Share 2,193.03 2,634.58

Centre's Net Tax Revenue 5,636.85 6,644.57

Non-Tax Revenue

Interest Receipts 197.28 195.78

Dividend and Profits 487.27 426.24

External Grants 27.56 21.73

Other Non-Tax revenue 1,477.94 598.91

Receipts of Union Territories 11.43 11.69

Total Non-tax Revenue 2,201.48 1,254.35

Total Revenue Receipts 7,838.33 7,898.92


33

RECEIPTS (Contd...)

(` bn)2010-11


Budget Estimates

CAPITAL RECEIPTS*

Non-debt Receipts

Recoveries of Loans & Advances@ 90.01 150.20

Miscellaneous Capital receipts 227.44 400.00

Total 317.45 550.20

Debt Receipts

Market Loans 3,354.14 3,430.00

Short term borrowings 100.00 150.00

External Assistance (Net) 222.64 145.00

Securities issued against Small Savings 177.81 241.82

State Provident Funds (Net) 100.00 100.00

Other Receipts (Net) 205.39 -138.66

Total 4,159.98 3,928.16

Total Capital Receipts (A+B) 4,477.43 4,478.36

Draw-Down of Cash Balance (150.00) 200.00

TOTAL RECEIPTS (1+2+3+4) 12,165.76 12,577.28

Financing of Fiscal Deficit (2+Draw-Down of Cash Balance) 4,009.98 4,128.17

Receipts under MSS (Net) -27.37 200.00

@ excludes recoveries of short-term loans and advances from States and loans to Government servants, etc.

167.90 114.90

* The receipts are net of repayments.


34

EXPENDITURE

(` bn)2010-11


Budget Estimates

1. NON-PLAN EXPENDITURE

1 A. Revenue Expenditure

1 Interest Payments and Prepayment Premium 2,407.57 2,679.86

2 Defence Services 907.48 952.16

3 Subsidies 1,641.53 1,435.70

4 Grants to State and U.T. Governments 526.06 663.11

5 Pensions 532.62 545.21

6 Police 275.87 296.85

7 Assistance to States from National Calamity Contingecy Fund (NCCF)/NDRF

35.60 45.25

8 Economic Services (Agriculture, Industry, Power, Transport, Communications, Science & Technology, etc.)

322.16 253.91

9 Other General Services (Organs of State, tax collection, external affairs, etc.)

186.82 191.05

10 Social Services (Education, Health, Broadcasting, etc.) 350.85 208.62

11 Postal Deficit 58.54 50.18

12 Expenditure of U.T. without Legislature 36.60 35.92

13 Amount met from NCCF/NDRF -35.6 -45.25

14 Grants to Foreign Govts. 21.39 23.01

Total Revenue Non-Plan Expenditure 7,267.49 7,335.58

1 B. Capital Expenditure

1 Defence Services 608.33 691.99

2 Other Non-Plan Capital Outlay 276.96 132.12

3 Loans to Public Enterprises 58.71 4.96

4 Loans to State and U.T. Governments 0.85 0.85

5 Loans to Foreign Governments

6 Others 3.18 -3.68

Total Capital Non-Plan Expenditure 948.03 826.24

Total Non-Plan Expenditure 8,215.52 8,161.82

Note: Issue of Special Securities in lieu of Subsidies


35

EXPENDITURE (Contd...)

(`bn)2010-11


Budget Estimates

2. PLAN EXPENDITURE 2 A. Revenue Expenditure

1 Central Plan 2,420.34 2,682.87

2 Central Assistance for States & Union Territory Plans 848.94 953.17

State Plan 824.89 921.68

Union Territory Plan 24.05 31.49

Total Revenue Plan Expenditure 3,269.28 3,636.04

2 B. Capital Expenditure

1 Central Plan 565.78 672.34

2 Central Assistance for State & Union Territory Plans 115.18 107.09

State Plan 104.90 90.67

Union Territory Plan 10.28 16.42

Total Capital Plan Expenditure 680.96 779.43

Total-Plan Expenditure 3,950.24 4,415.47

Total Budget Support for Central Plan 2,986.12 3,355.21

Total Central Assistance for State & U.T. Plans 964.12 1,060.26

TOTAL EXPENDITURE* 12,165.76 12,577.29

DEBT SERVICING

1 Repayment of Debt** 1,496.78 1,009.27

2 Total Interest Payments 2,407.57 2,679.86

3 Total Debt Servicing (1+2) 3,854.35 3,689.13

4 Revenue Receipts 7,838.33 7,898.92

5 Pecentage of 2 to 4 30.72% 33.93%

*Excludes expenditure matched by receipts (Details in Annex-2 to Expenditure Budget, Volume-1, 2011-2012) ** The figures excludes discharge of all Treasury bills, discharge of Cash Management Bills, discharge of Ways and Means Advances including Overdraft repayment under MSS and all Public Accounts Disbursements


36

KEY ECONOMIC INDICATORS (Absolute Values)

2008-09 2009-10 2010-11

Gross Domestic Product at factor cost (` bn)

At current prices 52,820.9 PE 61,332.3 QE 72,565.7 AE

At 2004-05 prices 41,625.1 PE 44,937.4 QE 48,792.3 AE

Output

Foodgrains (mn tonnes) 234.5 218.1 a 232.1 b

Power generation ( by utilities) (bn kWh)* 723.8 771.6 597.3 e

Prices

Wholesale Price Index (All commodities) 125.9 130.4 141.5 d

CPI-IW (Average) 145.0 163.0 177.7 d

External Sector (US$ mn)

Imports 303,696.0 288,373.0 24,6724 e

Exports 185,295.0 178,751.0 16,4707 e

Current Account Balance -27,915.0 -38383 PR -27881.0 f

Foreign Direct Investment (net) 19,816.0 18771 PR 5340 f

Monetary and Finance

Money Supply (M3) (` bn) 47,948.1 55,997.6 62,024.3 g

Foreign Currency Assets** (US$ mn) 241,426.0 254,685.0 26,9368 h

Exchange rate (`/US$) (Average) 45.92 47.42 45.63 i

FootnotesQE: Quick Estimates; AE: Advance Estimates; PE: Provisional Estimatesa: Final Estimates; b: Second Advance Estimates; d: Apr 10-Jan 11; e: Apr 10-Dec 10; f: Apr 10-Sept 10; g: Outstanding as on December 31, 2010; h: As on February 11, 2011; i: Apr 10-Feb 11Excludes ` 11.44 bn /US$ 250 mn invested in foreign currency denominated bonds issued by IIFC (UK).PR : Provisionally Revised* Excludes generation from hydro stations up to 25 MW.** Excluding gold,SDRs and Reverse Tranche Position at IMF

Source: RBI, CSO, Commerce Ministry, Economic Survey, 2010-11


37

KEY ECONOMIC INDICATORS (Percentage Change Over Previous Year)

(%) 2008-09 2009-10 2010-11

Gross Domestic Product at factor cost

At current prices 15.29 PE 16.11 QE 18.32 AE

At 2004-05 prices 6.76 PE 7.96 QE 8.58 AE

Sectoral Growth Rates at Constant (2004-05) prices

Agriculture & allied -0.15 PE 0.44 QE 5.41 AE

Industry 4.38 PE 7.96 QE 8.10 AE

Services 10.14 PE 10.06 QE 9.62 AE

Prices

Wholesale Price Index (All Commodities) 8.07 3.57 9.3 d

CPI-IW (Average) 9.02 12.41 11.0 d

External Sector

Imports 20.68 -5.05 19.01 e

Exports 13.59 -3.53 29.5 e

Foreign Direct Investment (net) 24.68 -5.27 PR -56.69 f

Monetary and Finance

Money Supply (M3) 19.34 16.79 16.5 g

Foreign Currency Assets ** -19.32 5.49 14.7 h

Exchange rate (`/US$) (Average) 14.12 3.27 -4.11 i

Footnotes

QE: Quick Estimates AE: Advance Estimates; PE: Provisional Estimates

d: Apr 10-Jan 11; e: Apr 10-Dec 10; f: Apr 10-Sept 10; g: Outstanding as on December 31, 2010; h: As on February 11, 2011 and Excludes ` 11.44 bn /US$ 250 mn invested in foreign currency denominated bonds issued by IIFC (UK); i: Apr 10-Feb 11

** Excluding gold,SDRs and Reverse Tranche Position at IMF

Source: RBI, CSO, Commerce Ministry, Economic Survey, 2010-11


38

GLOSSARY

Appropriation Bill: This Bill entails the Parliament’s approval for withdrawal of money from the Consolidated Fund to pay off expenses. After the Demands for Grants are voted by the Lok Sabha, the Parliament approves this bill. Under Article 114(3) of the Constitution, no amount can be withdrawn from the Consolidated Fund without the enactment of such a law by the Parliament.

Capital Expenditure: It is the expenditure incurred on acquisition of assets like land, buildings, machinery, equipment etc and also loans and advances granted by the Central Government to State and Union territories, Public sector enterprises and other parties. This expenditure is also categorised as plan and non-plan capital expenditure.

Capital Receipts: Capital receipts include loans raised by the Government from public which are called Market Loans, borrowings by the Government from the Reserve Bank of India and other parties through sale of Treasury Bills, loans received from foreign Governments and bodies and recoveries of loans granted by Central Government to State and Union Territory Governments and other parties.

Consolidated Fund: All revenues received by the Government, loans raised by it, and also its receipts from recoveries of loans granted by it, form the Consolidated Fund. All expenditure of the Government is incurred from the Consolidated Fund and no amount can be withdrawn from the Fund without authorisation from the Parliament.

Contingency Fund: It is an imprest from the Consolidated Fund, and may be used by the Government without waiting for an appropriation bill to be passed by the Parliament. If it becomes necessary for the Government to incur expenditure not included in the budget, it can do so from the Contingency Fund.

Customs Duties: Customs duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India.

Exceptional Grant: Through the Exceptional Grant the House of People can make provision for an exceptional grant that does not form part of the current service of any financial year.

Excise Duties: Central excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption.

Finance Bill: At the time of presentation of the Annual Financial Statement before the Parliament, a Finance Bill is also presented in fulfilment of the requirement of Article 110(1) (a) of the Constitution, detailing the imposition, abolition, remission, alteration or regulation of taxes proposed in the Budget. A Finance Bill is a Money Bill as defined in Article 110 of the Constitution.

Fiscal Deficit: The difference between the total expenditure of the Government by way of revenue, capital and loans net of repayments on the one hand and revenue receipts of the Government and capital receipts which are not in the nature of borrowing but which finally accrue to the Government on the other, constitutes fiscal deficit.

Non-Plan Expenditure: It includes expenses that do not form a part of the Government’s five year plan. These expenses consist of revenue and capital expenditure on defense, subsidies, interest payments, postal deficit, pensions, police, loans to public sector enterprises, economic services and loans as well as grants to State Governments, Union Territories and foreign Governments.

Non-Tax Revenues: Revenues earned by the Government from sources other than taxes are termed as non-tax revenues. The sources of non-tax revenues may include; dividends and profits received from


public sector companies, interest receipts, fines, penalties and fees for various services rendered by the Government.

Plan Expenditure: It consists of both revenue expenditure and capital expenditure of the Centre on the Central Plan and Central Assistance to States and Union Territories. Plan expenditure reflects the Government’s investment in enhancing the economy’s productive aptitude. It arises out of schemes freshly introduced in an ongoing Five Year Plan (FYP) period.

Plan Outlay: Plan Outlay refers to the amount sanctioned for expenditure on projects, schemes and programmes announced in the Plan. The provision for this amount is made through extra budgetary resources and from provisions in the Demands for Grants. The budgetary support is also reflected as plan expenditure in Government accounts.

Primary Deficit: The amount by which the Government’s total expenditure exceeds its total revenue generated, excluding the interest payments on debt. It is primarily the difference between the gross fiscal deficit and gross interest payments.

Public Account: Besides the normal receipts and expenditure of the Government which relate to the Consolidated Fund, certain other transactions enter Government accounts, in respect of which the Government acts more as a banker. For example, transactions relating to provident funds, small savings collections, other deposits, etc. The money thus received is kept in the Public Account and the connected disbursements are also made therefrom.

Public Debt: It refers to the total debt of the central and the State Governments. Public debt can be classified into internal debt (comprising of money borrowed within the country) and external debt (comprising of funds borrowed from non-Indian sources). The net accretion to public debt is the difference in borrowing and repayments during a fiscal year.

Revenue Deficit: Revenue Deficit is the excess of Government’s revenue expenditure over revenue receipts.

Revenue Expenditure: It is the expenditure incurred by the Government for running of Government departments and conducting various economic, social and general services, interest payments, subsidies, grants and assistance to State and Union territories etc. This expenditure is also categorised as plan and non-plan revenue expenditure.

Revenue Receipts: It includes revenues garnered by the Government through taxes and other non-tax sources. Other receipts of the Government mainly consist of interest and dividend on investments made by the Government, fees, and other receipts for services rendered by it.

Tax Revenues: It comprises of revenue receipts through taxes and other duties levied by the Government. Tax revenue includes revenue generated through both direct taxes (personal income tax, corporate tax, capital gain tax and wealth tax) and indirect taxes (central excise duty, customs duty, service tax and VAT).

Vote on Account: It means a grant made in advance by the Parliament, in respect of the estimated expenditure for a part of the new financial year, pending the completion of the procedure relating to the voting of the demand for grants and the passing of the Appropriation Act.

Vote of Credit: Through the Vote of Credit the House of People can approve grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service, the demand cannot be stated with the details ordinarily given in an annual financial statement.

Union Budget Analysis 2011-12-2

Documents

Transcript of Union Budget Analysis 2011-12-2