Union Budget 2011-12: Highlights

Key proposals made by Finance Minister Pranab Mukherjee in his Budget speech in Parliament

Union Budget 2011-12

• Pranab Mukherjee arrives in Parliament; Cabinet to approve budget before day's session begins
• Finance Minister Pranab Mukherjee begins presenting the Union Budget 2011-12 speech
• FM hints at inclusive growth, indicates double-digit growth in the near future
• Pranab Mukherjee: Food inflation declined in the last year but remains a concern
• Pranab Mukherjee: Reaching the end of a remarkable fiscal year
• Pranab Mukherjee: India has returned to pre-crisis growth trajectory
• Rural economic growth helped India avoid the quagmire of a global meltdown
• The implementation gaps in the PDS is a big challenge
• All sectors show growth, service sectors growing in double digits
• Consumers denied price falls during seasonal changes
• GDP estimates grew at 8.6% in 2010; 9.6 pct in services, 5.2 % in agriculture sector
• Corruption is a problem to be fought collectively
• Weakening governance is an impression that is misplaced
• Exports grew 29 percent, imports by 17.6 percent
• FM wants RBI to make more interventions to curtail inflation
• Wholesale-retail price imbalance unacceptable. Need to improve the distribution system of food and agriculture
• GST network to be spruced up further
• Industrial growth seen at 11% in 2011-12
• GDP to grow 9% in FY 2011-12with outside band of 0.1% to 0.2%
• New bill to initiate GST, both at central and state levels
• General Sales Tax (GST) to be simplified
• Public Debt Management Institute of India to be set up soon
• Disinvestment momentum to be maintained; target set to 40,000 crores
• Implement strong IT infrastructure across states for GST
• FDI policy liberalisation being looked into

• 36.4% of total budget outlay to be allocated for social sector development
• Finance Ministry to take up study to assess the incidence of money laundering and suggest corrective measures
• Government joins global forums and 11 tax information agreements to stop money laundering
• Government puts into operation a five-fold strategy to control black money
• Metro projects in Mumbai, Bangalore and Chennai to receive more funds in 2011-12
• National Mission of Hybrid Transportation to be created to bolster green transportation
• Ministerial group to study existing mining laws and suggest changes
• Manufacturing sector growth to account for 20% of GDP in next 10 years; up from 15% now
• Tax-free bonds of Rs 30,000 crore for developing infrastructure in railways, roads, etc.
• Comprehensive policy to develop public-private participation in infrastructure development
• Cold storage to be recognised as an infrastructure sector
• 150 lakh mT of storage capacity for food items being created under Rural Godown scheme
• FM proposes 15 more food parks
• Direct Tax Code to be implemented from April 1, 2012
• Agricultural credit to farmers to grow from Rs 3,75,000 crore to Rs 4,75,000 crore
• Vegetable initiative to set in motion a virtual cycle of production and distribution
• Oilseed production to go up in 2010-11 as against 2009-10; 100,000 hectares added to oilseed farming
• Outlay of Rs 500 crore to increase agriculture productivity
• Green revolution in eastern region to be given a fillip with additional allocation to bolster paddy growth
• FM announces Women's Self-help Group Development Fund of Rs 500 crore
• India Micro-finance Equity Fund of Rs 100 crore proposed
• FM proposes removal of bottlenecks in supply of essential food items
• Capital infusion into PSU banks; Rs 20,000 crore proposed
• Slew of bills to make the financial sector more open in 2011-12
• Direct transfer of subsidy on kerosene to the poor; Task force headed by Nandan Nilekani working on modalities
• Cash subsidies for fertiliser, kerosene
• Government will retain 51% control over central PSUs
• FII limit in infrastructure bonds to be increased to US $40 billion

• Direct Tax exemption limit raised from Rs 1.6 lakh to Rs 1.8 lakh for individuals
• Senior citizens: Reduction in qualifying age to 60 years from 65; exemption limit at Rs 2.5 lakh
• New tax slab for senior citizens above 80 years; exemption limit at Rs 5 lakh
• Revenue Deficit is 3.4% of GDP as against target of 4.1%
• Fiscal Deficit targeted at 4.6% for FY12
• Fiscal Deficit reduced from 5.5% to 5.1% in FY11
• Eleventh plan expenditure in nominal terms is the highest so far in India's planned development
• GoM to study issues relating to corruption like state-funding of elections, discretionary quotas of ministers, etc
• Eleventh plan expenditure in nominal terms is the highest so far in India's planned development
• GoM to study issues relating to corruption like state-funding of elections, discretionary quotas of ministers, etc
• Gove to launch new scheme to modernise stamp duty administration across all states
• FM lists a slew of online systems to bring transparency
• Government keen to make tax filing and refunds an online process
• 10 lakh Aadhar (UID) cards per day from September 2011
• Rs 3,000 crore provided for enhancing judicial infrastructure including e-courts
• FM allocates Rs 23,000 crore for literacy mission
• Allocation to Backward Region Grant Fund increased from Rs 7,300 crore to Rs 9,890 crore
• Rs 1,64,415 crore allocated in budget outlay for defence
• Additional funds of Rs 500 crore announced for Ladakh and Jammu
• FM allocates additional funds worth Rs 8000 crore for J&K development programs
• FM allocates Rs 600 crore for various environmental schemes in 2011-12
• Old age pension in BPL category: Beneficiaries age lowered to 60 years from 65 years
• Scheme to help banks operate across 70,000 villages in 2 years
• Rs 1 crore global award in memory of Rabindranath Tagore announced
• National Knowledge Network: 1,500 colleges of higher education will be linked via cables by 2012
• Rs 2 lakh crore from National Clean Energy Fund allocated for Green India Mission
• FIIs allowed to invest in Mutual Funds
• Food Security Bill to be introduced this year
• Total allocation for Education: Rs 52,057 crore
• Rs 58,000 crore allocated to Bharat Nirman
• To index NREGA wage rate to consumer price index
• Renumeration for Anganwadi helpers increased from Rs 750 to Rs 1,500
• Renumeration for Anganwadi workers raised from Rs 1,500 to Rs 3,000
• Rural broadband connectivity to all 2.5 lakh villages in 3 years

• Fertiliser companies to get investment-linked tax deductions
• Notified infrastructure debt funds proposed
• Fiscal Deficit in FY12 pegged at Rs 4.12 lakh crore
• Special Economic Zones to come under MAT
• Service Tax retained at 10%
• Investment-linked tax deduction proposed in fertiliser and housing sectors
• Foreign dividend tax rate cut to 15% for Indian companies
• Corporate surcharge reduced from 7.5% to 5%
• Minimum Alternate Tax (MAT) raised from 18% to 18.5%
• No resource mobilisation made through fresh taxation
• Propose a public debate on GST; relevant documents to be shared soon
• Tax surcharge for companies to be cut from 7.5% to 5%
• Air-conditioning equipment for cold storages exempt from excise
• Base excise duty up to 5%
• Customs peak rates to be retained
• 20% ad valorem export duty on iron ore
• Customs duty on yarn reduced from 7.5% to 5%
• Proposal to align customs duty with that of ASEAN countries
• 1 percent Central Excise levied on 100 new items in the CENVAT list
• FM to not roll back standard rate of excise duty and maintain it at 10%
• Additional deduction of Rs 20,000 for long-term infrastructure investment to continue for another year
• All small tax payers and small business owners with revenue of upto Rs 60 lakh exempt from audit
• New services in tax net: Hotels charging over Rs 1,000 per day as room rent, Air-conditioned restaurantsserving liquor, Hospitals with central air-conditioning, Diagnostics services outside hospitals, Life insuranceservices
• Customs duty on raw steel reduced
• Excise duty rates rationalised for cement industry
• Finance Minister Pranab Mukherjee ends his presentation in Parliament