Highlights of the Budget 2011/12

GROWTH, INFLATION EXPECTATIONS

* Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent

* Inflation seen lower in the financial year 2011-12

SPENDING

* Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent

REVENUE

* Gross tax receipts seen at 9.32 trillion rupees in 2011-12

* Non-tax revenue seen at 1.25 trillion rupees in 2011-12

DISINVESTMENT

* Disinvestment in 2011-12 seen at 400 billion rupees

POLICY REFORMS

* To create infrastructure debt funds

* To boost infrastructure development with tax-free bonds of 300 billion rupees

* Food security bill to be introduced this year

* To permit Securities and Exchange Board of India (SEBI) registered mutual funds to access subscriptions from foreign investments

* Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion

* Public debt bill to be introduced in parliament soon

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SECTOR SPENDING

* To allocate more than 1.64 trillion rupees to defence sector in 2011-12

* Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12

* To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12

* To allocate 520.5 billion rupees for the education sector

* To raise health sector allocation to 267.6 billion rupees

AGRICULTURE

* Removal of supply bottlenecks in the food sector will be in focus in 2011-12

* To raise target of credit flow to agriculture sector to 4.75 trillion rupees

* Gives 3 percent interest subsidy to farmers in 2011-12

* Cold storage chains to be given infrastructure status

* Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner

* To provide 3 billion rupees for 60,000 hectares under palm oil plantation

* Actively considering new fertiliser policy for urea

FINANCE MINISTER ON THE STATE OF THE ECONOMY

* "Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future."

* Food inflation remains a concern

* Current account deficit situation poses some concern

* Must ensure that private investment is sustained

* "The economy has shown remarkable resilience."

FINANCE MINISTER ON GOVERNANCE

* "Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability ... such an impression is misplaced."

* Corruption is a problem, must fight it collectively

Finance Minister Pranab Mukherjee on Monday proposed to raise the income tax exemption limit for general tax payers to Rs 1.80 lakh per annum from Rs 1.60 lakh at present and introduced a high new tax slab for senior citizens of 80 years and above.
Unveiling the Budget proposals for 2011-12 in the Lok Sabha, he also proposed to reduce the age limit for consideration as senior citizens from 65 years to 60.
Senior citizens will get tax exemption for income up to Rs 2.5 lakh, higher from Rs 2.4 lakh now.
As per the announcement, the increase in the income tax exemption limit for general tax payers (excluding women and senior citizens) to Rs 1.8 lakh per annum would translate into a benefit of Rs 2,000 for all tax payers.
At present, the general tax payers earning more than Rs 1.6 lakhs per annum are required to pay income tax.
Introducing a new tax slab for very senior citizens (80 years and above), Mukherjee said, they will not have to pay any tax for annual income up to Rs 5 lakh. 


Goods and services tax bill in budget session: Pranab
Higher tax exemption limit for individuals, significant benefits for senior citizens, retention of service tax at 10 per cent and withdrawal of some duty exemptions were some of the major tax-related highlights of the Budget 2011-12 presented by Finance Minister Pranab Mukherjee on Monday.

Here are some major announcements:

*Tax exemption limit raised to Rs 1.8 lakh, from Rs 1.60 lakh for individual tax papers.

*For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.

*Citizens over 80 years to have exemption limit of Rs 5 lakh.

*Surcharge for companies cut to 5 per cent, from 7.5 per cent.

* A new revised income tax return form 'Sugam' to be introduced for small tax papers.

*Service tax retained at 10 per cent; duty exemptions to be withdrawn on various items.

*Net loss from direct tax proposals estimated at Rs 11,500 crore for the year.

*Excise and customs duty proposals to result in the net gain of Rs 7,300 crore.

*Standard rate of central exercise duty maintained at 10 per cent; No change in CENVAT rates.

*Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.

*Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.

*Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.

*Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.

*Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.