New Delhi: Today's Budget is one of the biggest challenges of Pranab Mukherjee's long political career and the Finance Minister set the tone for it when he described the year gone by as a "year of recovery interrupted." He began with listing grim ground realities - the global economic scenario, the battle with double digit inflation and said it was time for tough decisions. Here are the highlights of this fiscal's financial budget.
- Service tax raised from 10 percent to 12 percent
- Income tax exemption limit raised to Rs.2 lakh to provide relief of relief of Rs.2,000 for assessees in this catergory; 20 percent tax on income over Rs.10 lakh, up from Rs.8 lakh.
- Deduction of up to Rs.10,000 from interest from savings bank accounts.
- No change in corporate taxes but measures to enable them better access funds
- Witholding tax on external commercial borrowings reduced from 20 percent to five percent for power, airlines, roads, bridges, affordable houses and fertiliser sectors.
- Defence to get Rs.1.93 lakh crore during 2012-13.
- National Skill Development Fund allocated Rs.1,000 crore.
- Four thousand residential quarters to be constructed for paramilitary forces with an allocation of Rs.1,185 crore.
- National Population Register to be completed in two years.
- Number of proactive steps taken on black money (stashed away abroad); information has started flowing in, prosecution to be initiated; White Paper in current session.
- Allocation of Rs.200 crore for research on climate change.
- Irrigation and water resource company to be operationalised.
- National mission on food processing to be started in cooperation with state governments.
- Integrated Child Development Scheme to be strengthened and restructured with allocation of Rs.15,850 crore.
- Allocation of Rs.14,000 crore for rural water supply and sanitation.
- Infusion of Rs.15,888 crore in public sector banks, regional rural banks and NABARD in 2012-13.
- Infrastructure will require Rs.50 lakh crore in 12th Plan, half of this from the private sector.
- Completion of highway projects 44 percent higher than in previous fiscal.
- External commercial borrowing of up to $1 billion permitted for airline sector.
- External commercial borrowing permitted to low-cost housing sector.
- From 2012-13, full subsidies for providing food security; in other sectors to the extent the economy can bear this.
- Hope to raise Rs.30,000 crore from disinvestments.
- New equity savings scheme to provide for income tax deduction of 50 percent for those who invest Rs.50,000 in equity and whose annual income is less than Rs.10 lakh.
- Corporate market reforms to be initiated.
- Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13.
- Addressing malnutrition, black money and corruption in public life among five priorities in year ahead.
- India's inflation structural, driven largely by agricultural constraints.
- Current account deficit 3.6 percent in 2011-12; this put pressure on exchange rate.
- Growth in 2012-13 estimated at 7.6 percent; expect inflation to be lower.
- Better monitoring of expenditure on government schemes.
- Fiscal 2011-12 year of recovery interrupted; reality turned out to be different.
- GDP growth in 2011-12 estimated at 6.9 percent; had to battle double digit inflation for two years.
- Good news: agriculture and services continued to perform well; economy is now turning around; recovery in core sectors.
- Now at juncture where it is necessary to take hard decisions; have to accelerate pace of reforms.
