RBI expected to lower policy interest rates, as inflationary pressures expected to ease in coming months; A low interest rate regime to encourage investment activity and push forward economic growth.
Steps required for deepening of domestic financial markets, especially corporate bond market and attracting longer-term inflows from abroad; Efforts at attracting dedicated infrastructure funds have begun.
The growth rate of investment in the economy is estimated to have declined significantly; borrowing costs up due to a sharp increase in interest rates.
Slowdown in Indian economy largely due to global factors, as also because of domestic factors like tightening of monetary policy, high inflation and slower investment and industrial activities.
Inflation high, but showing clear signs of slowdown by the year-end; Whole-sale food inflation down to 1.6 per cent in January 2012 from 20.2 per cent in February 2010.
India remains one of the fastest growing economies of the world; Country`s sovereign credit rating rose by a substantial 2.98 per cent 2007-12
Farm sector growth pegged at 2.5 percent for 2011-12.
Services sector to grow at 9.4 percent.
Services sector share in GDP to go up to 59 percent in the fiscal ending March 31.
Industrial growth pegged at 4-5 percent, expected to improve as economic recovery resumes.
Calibrated steps initiated to rein-in inflation on top priority.
Fiscal consolidation on track - savings and capital formation expected to rise.
Exports grew by 40.5 percent in the first half of this fiscal and imports grew by 30.4 percent.
Foreign trade performance to remain a key driver of growth.
Forex reserves enhanced - covering nearly the entire external debt stock.
Central spending on social services goes up to 18.5 percent this fiscal from 13.4 percent in 2006-07.
Following are some more key highlights of the Union Budget 2012-13, presented by Finance Minister Pranab Mukherjee in the Parliament on 16 March.
Tax burden for individuals to come down: Income tax exemption limit raised from Rs. 1,80,000 to Rs. 2,00,000; 10 per cent tax for 2-5 lakh income; 20 per cent for 5-10 lakh and 30 per cent beyond Rs. 10 lakh; Savings bank account interest up to Rs. 10,000 exempted from tax.
Many services and goods to cost more: No change in corporate tax rate, but standard rate of excise duty, as also service tax rates, raised from 10 per cent to 12 per cent; No change in peak customs duty of 10 per cent on non-agri goods.
Large cars, imported bicycles, cigarettes, bidis and some imported jewellery to cost more; branded silver jewellery may get cheaper.
Boost for capital markets: Securities Transaction Tax on cash delivery reduced by 25 per cent to 0.1 per cent; A new Rajiv Gandhi Equity Saving Scheme to allow income tax deduction to retail investors in stocks.
Economy expected to gain ground: GDP growth rate pegged at 7.6 per cent in 2012-13; Subsidy Expenditure to be checked and higher tax revenues targeted; Rs. 30,000 crore to be raised from disinvestment.
Capital boost to financial and infrastructure sectors: Rs. 15,888 crore to be provided for capitalisation of public sector banks and financial institutions; Infrastructure investment of Rs. 50 lakh crore in 12th period, with half from private sector; Tax free bonds of Rs. 60,000 crore to be allowed for financial infrastructure projects.
Fight against black money: White paper on black money in current session of Parliament; Introduction of compulsory reporting requirement for assets held abroad; tax collection at source on high-value cash purchase of bullion, jewellery, immovable property and trading in coal, lignite and iron ore.
Greater scrutiny of closely-held companies for funds; Taxation of unexplained money, credits, investments, expenses at highest rate of 30 per cent irrespective of income slab.
Tax reforms: Direct Taxes Code (DTC) at earliest; GST network to be operational by August 2012; Central Excise and Service Tax being harmonized. A General Anti-Avoidance Rule (GAAR) to be introduced to counter aggressive tax avoidance.
Attracting foreign funds: Efforts on to allow FDI in multi-brand retail and permitting foreign airlines invest in domestic players; External borrowings to the extent of USD one billion for aviation companies; Qualified Foreign Investors to get access to corporate bond market.
Tax relief for stressed sectors: Sectors like agriculture, infrastructure, mining, railways, roads, civil aviation, manufacturing, health and nutrition, and environment to get duty relief; Turnover limit for compulsory tax audit for SMEs raised from Rs 60 lakh to Rs 1 crore.
Farming for growth: Target for agricultural credit raised to Rs 5,75,000 crore; Interest subvention for short-term crop loans to farmers at 7 per cent interest continues; additional 3 per cent for prompt paying farmers.
Financial Highlights of Budget 2012-12:
Direct proposals to give in net revenue loss of Rs. 4,500 crore and net gain of Rs. 45,940 crore from indirect taxes, resulting into a net gain of Rs. 41,440 crore.
Fiscal deficit targeted at 5.1 per cent of GDP in 2012-13, down from 5.9 per cent in 2011-12; Central Government debt at 45.5 per cent of GDP.
Defence services get Rs. 1,93,407 crore; any further requirement to be met.
Total expenditure budgeted at Rs. 14,90,925 crore; plan expenditure at Rs. 5,21,025 crore, 18 per cent higher than 2011-12 budget; non-plan expenditure at Rs. 9,69,900 crore.
Gross Tax Receipts estimated at Rs. 10,77,612 crore, 15.6 per cent higher than original budget estimates and 19.5 per cent over the revised estimates for 2011-12.
Net tax to the Centre in 2012-13 estimated at Rs. 7,71,071 crore; Non-Tax Revenue Receipts estimated at Rs. 1,64,614 crore and Non-debt Capital Receipts at Rs. 41,650 crore.
Railway Minister Dinesh Trivedi Presented the annual Railway Budget for the financial year 2012-13 in Parliament on 14 March. He made the following key proposals:
Passenger fares to be hiked by 2 paise per km for suburban and ordinary second class travel; 3 paise per km for mail/ express second class; 5 paise per km for sleeper class; 10 paise per km for AC chair car/AC 3-tier and First Class; 15 paise per km for AC 2-tier and 30 paise per km for AC 1-tier.
Minimum fare and platform tickets to cost Rs 5.
75 new Express trains to be introduced, along with 21 new passenger services, nine DEMU services and 8 MEMU services trains.
Railways to hire more than one lakh employees in 2012-13; 80,000 persons hired last year.
Indian Railways Stations Development Corp to be set up to re-develop stations and maintain them like airports.
To set up an independent Railway Safety Authority as a statutory body.
The open discharge toilets on trains to be replaced with green (bio) toilets.
All unmanned level crossings to be abolished in next five years; To target zero deaths due to rail accidents.
To provide rail connectivity to neighbouring countries, a new line from Agartala to Akura in Bangladesh to be set up.
Double-decker container trains to be introduced.
Two new members, one for marketing, and other for safety, to be inducted into Railway Board.
Specially designed coaches for differently-abled persons to be provided in each Mail/Express trains.
Railway Tariff Regulatory Authority to be considered.
National High Speed Rail Authority to be set up; Pre-feasibility studies on six high speed corridors completed; study on Delhi-Jaipur-Ajmer-Jodhpur to be taken up in 2012-13.
Institution of ‘Rail Khel Ratna’ Award for 10 rail sportspersons every year.
A wagon factory at Sitapali, Odisha, rail coach factory at Palakkad, two additional new coach manufacturing units in Kutch (Gujarat) and Kolar (Karnataka); component factory at Shyamnagar (West Bengal); new coaching terminal at Naihati, the birth place of Bankim Chandra Chattopadhyay.
Freight loading of 1,025 MT targeted; 55 MT more than 2011—12; Passenger growth targeted at 5.4 per cent.
Passenger earnings to increase to Rs 36,200 crore.
The union government decided to increase public spending in the health sector to 2.5 per cent of GDP from the current 1.4 per cent in the 12th Five Year Plan period beginning 2012.The Prime Minister’s Office (PMO) directed the Planning Commission to allocate funds during the 12th Five-Year Plan. The decision to increase the funds in this sector was in tune with the recommendations of the Srinath Reddy-led committee on universal healthcare coverage set up by the plan panel.
The union government decided to increase public spending in the health sector to 2.5 per cent of GDP from the current 1.4 per cent in the 12th Five Year Plan period beginning 2012.The Prime Minister’s Office (PMO) directed the Planning Commission to allocate funds during the 12th Five-Year Plan. The decision to increase the funds in this sector was in tune with the recommendations of the Srinath Reddy-led committee on universal healthcare coverage set up by the plan panel.