Tuesday, March 1, 2011

Indian Union Budget 2011-2012 Estimates & Highlights

  • Direct Taxes Code (DTC) to be finalized for enactment during 2011-12. DTC proposed to be effective from April 1, 2012.
  • Rs. 40,000 crore to be raised through disinvestment in 2011-12.
  • Rs. 6,000 crore to be provided during 2011-12 to enable public sector banks to maintain a minimum of Tier I CRAR of 8 per cent.
  • “India Microfinance Equity Fund” of Rs. 100 crore to be created with SIDBI.
  • Existing housing loan limit enhanced to Rs. 25 lakh for dwelling units under priority sector lending.
  • Provision under Rural Housing Fund enhanced to Rs. 3,000 crore
  • Credit flow for farmers raised from Rs. 3,75,000 crore to Rs. 4,75,000 crore in
  • Rs. 10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for 2011-12.
  • Allocation of Rs. 2,14,000 crore for infrastructure in 2011-12. This is an increase of 23.3 per cent over 2010-11.
  • To boost infrastructure development, tax free bonds of Rs. 30,000 crore proposed to be issued by Government undertakings during 2011-12.
  • Proposal to introduce scheme for refund of taxes paid on services used for export of goods.
  • Five fold strategy to be put into operation to deal with the problem of generation and circulation of black money.
  • Allocation for social sector in 2011-12 (Rs. 1,60,887 crore) increased by 17 per cent over current year. It amounts to 36.4 per cent of total plan allocation.
  • Allocation for Bharat Nirman programme proposed to be increased by Rs.10,000 crore from the current year to Rs. 58,000 crore in 2011-12.
  • Plan to provide Rural Broadband Connectivity to all 2,50,000 Panchayats in the country in three years.
  • Allocation for education increased by 24 per cent over current year.
  • Rs. 21,000 crore allocated for Sarva Siksha Abhiyan, which is 40 per cent higher than Budget for 2010-11.
  • Through National Knowledge Network, connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber backbone to be providedby March, 2012.
  • Plan allocations for health stepped-up by 20 per cent.
  • Target of providing banking facilities to all 73,000 habitations having a population of over 2,000 to be completed during 2011-2012.
  • Rs. 8,000 crore provided in current year for development needs of Jammu and
  • Provision of Rs. 1,64,415 crore, including Rs. 69,199 crore for capital expenditure to be made for Defence Services in 2011-12.
  • From 1st October, 2011 ten lakh Aadhaar (UID Scheme) numbers will be generated per day.
  • Provision of web based facility for tax payers to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity.
  • A new simplified form ‘Sugam’ to be introduced to reduce the compliance burden of small tax payers falling within presumptive taxation.
    Tax Proposals
  • Exemption limit for the general category of individual taxpayers enhanced from Rs. 1,60,000 to Rs. 1,80,000 giving uniform tax relief of Rs. 2,000.
  • Exemption limit enhanced and qualifying age reduced for senior citizens.
  • Higher exemption limit for Very Senior Citizens, who are 80 years or above.
  • Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
  • Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
  • Tax incentives extended to attract foreign funds for financing of infrastructure.
  • Additional deduction of Rs. 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.
  • Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
  • System of collection of information from foreign tax jurisdictions to be
  • A net revenue loss of Rs. 11,500 crore estimated as a result of proposals.
  • Central Excise Duty to be maintained at standard rate of 10 per cent.
  • Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
  • Concessional Excise Duty of 10 per cent to vehicles based on Fuel cell technology
  • Basic Customs Duty on solar lantern reduced from 10 to 5 per cent.
  • Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.
  • Hotel accommodation in excess of Rs. 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax.
  • Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.
  • Service Tax on air travel both domestic and international raised.
  • All individual and sole proprietor tax payers with a turn over upto Rs. 60 lakh freed from the formalities of audit.
  • Proposals relating to Service Tax estimated to result in net revenue gain of
    Rs. 4,000 crore.
  • Proposals relating to Direct Taxes estimated to result in a revenue loss of
    Rs. 11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs. 11,300 crore
  • Union Budget Estimates

  • Gross Tax receipts are estimated at Rs. 9,32,440 crore.
  • Non-tax revenue receipts estimated at Rs. 1,25,435 crore.
  • Total expenditure proposed at Rs. 12,57,729 crore.
  • Increase of 18.3 per cent in total Plan allocation.
  • Increase of 10.9 per cent in the Non-plan expenditure.
  • Increase of 23 per cent in Plan and Non-plan transfer to States and UTs.
  • Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to 5.1 per cent of
    GDP in RE 2010-11.
  • Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
  • Fiscal Deficit to be progressively reduced to 3.5 per cent by 2013-14.
  • “Effective Revenue Deficit” estimated at 2.3 per cent of GDP in the Revised
    Estimates for 2010-11 and 1.8 per cent for 2011-12.
  • Central Government debt estimated at 44.2 per cent of GDP for 2011-12 as against 52.5 per cent recommended by the 13th Finance Commission.’

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