FISCAL

The Gross Tax Receipts estimated at Rs. 9,32,440 cr in FY12.

The Non Tax Revenue Receipts estimated at Rs. 1,25,435 cr.

Total expenditure at Rs. 12,57,729cr in the BE 2010-11, an increase of 13.4% over last year.

Plan and Non Plan expenditures in BE 2010-11 estimated at Rs. 4,41,547cr and Rs. 8,16,182cr respectively.

Targets for fiscal deficit pegged at 4.1% for 2012-13 and 3.5% for 2013-14 respectively.

Effective Revenue Deficit estimated at 2.3% of GDP in the Revised Estimates for 2010-11 and 1.8% for 2011-12.

Fiscal Deficit brought down from 5.5% in BE 2010-11 to 5.1% of GDP in RE 2010-11.

Fiscal Deficit kept at 4.6% of GDP for 2011-12.

Fiscal Deficit to be progressively reduced to 3.5% by 2013-14.

All subsidy related liabilities brought into fiscal accounting.

Net market borrowing of the Government through dated securities in 2011-12 would be Rs. 3.43 lakh crore.

Central Government debt estimated at 44.2% of GDP for 2011- 12 as against 52.5% recommended by the 13th Finance Commission.

XI Plan expenditure more than 100% in nominal terms than envisaged for the Plan period.

DIVESTMENT

Rs. 40000 crore to be raised through disinvestment in 2011-12.

AGRICULTURE

Allocation of Rs. 300cr per scheme: (1) to promote 60,000 pulses villages in rainfed areas, (2) to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries (3) for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages (4) to bring 60,000 hectares under oil palm plantations (5)to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties (6) for implementation of vegetable initiative to provide quality vegetable at competitive prices and (7) to promote organic farming methods, combining modern technology with traditional farming practices

To improve rice based cropping system in this region, allocation of Rs 400 crore has been made.

Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from Rs 6,755 crore to Rs. 7,860 crore.

Allocation of Rs. 300 crore to promote Allocation of Rs. 300 crore for Government Augmentation of storage capacity through private entrepreneurs and warehousing corporations has been fast tracked.

Credit flow for farmers raised from Rs. 3,75,000 crore to Rs. 4,75,000 crore in 2011-12.

Interest subvention proposed to be enhanced from 2% to 3% for providing short-term crop loans to farmers who repay their crop loan on time.

In view of enhanced target for flow of agriculture credit, capital base of NABARD to be strengthened by Rs. 3,000 crore in phased manner and Rs. 10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for2011

Approval for 15 more Mega Food Parks during 2011-12.

SUBSIDY

Nutrient Based Subsidy (NBS) has improved the availability of fertilizer; Government actively considering extension of the NBS regime to cover urea.

Government to move towards direct transfer of cash subsidy to people living below poverty line in a phased manner for better delivery of kerosene, LPG and fertilizers. Task force set up to work out the modalities for the proposed system.

INFRASTRUCTURE DEVELOPMENT

Rs 2,14,000 crore provided for infrastructure development which accounts for over 48.5% of the total plan allocation.

IIFCL’s disbursements are expected to touch Rs 20,000cr by end March 2011 and reach around Rs 25,000cr by March 2012.

Under take out financing scheme, seven projects sanctioned with debt of Rs. 1,500 crore. Another Rs. 5,000 crore will be sanctioned during 2011-12.

To boost infrastructure development, tax free bonds of Rs. 30,000 crore proposed to be issued by Government undertakings during 2011-12.

Government to come up with a comprehensive policy for further developing PPP projects.

Capital investment in fertilizer production proposed to be included as an infrastructure sub-sector.

ENVIRONMENT AND CLIMATE

200 crore proposed to be allocated for launching Environmental Remediation Programmes from National Clean Energy Fund.

Special allocation of Rs. 200 crore proposed to be provided for clean-up of some more important lakes and rivers other than Ganga.

Rs 200 crore proposed to be allocated for Green India Mission from National Clean Energy Fund.

INCLUSIVE DEVELOPMENT

Spending on social sector increased to Rs. 1,60,887cr in 2010-11 which is 36.4% of the total plan outlay in 2011-12.

Bharat Nirman: 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.

MGNREGA: The Government has decided to index the wage rates notified under the MGNREGA to the Consumer Price Index for Agricultural Labour. The enhanced wage rates have been notified by the Ministry of Rural Development on January 14, 2011. From 1st April, 2011, remuneration of Anganwadi workers increased from Rs.1,500 per month to Rs. 3,000 per month and for Anganwadi helpers from Rs. 750 per month to Rs. 1,500 per month.

Allocation for primitive Tribal groups increased from Rs. 185 crore in 2010-11 to Rs. 244 crore in 2011-12.

Education: Allocation for education increased by 24% to Rs. 38,484 in 2011-12 from Rs. 31036 in 2010-11, allocation for Sarva Shiksha Abhiyan increased to Rs 21,000 crore which is 40% higher than Budget for 2010-11.

Health: Plan allocations for health stepped-up by 20%, Scope of Rashtriya Swasthya Bima Yojana to be expanded to widen the coverage.

Financial Inclusion: Target of providing banking facilities to all 73,000 habitations having a population of over 2,000 to be completed during 2011-2012.

Skill Development: Additional Rs. 500 crore proposed to be provided for National Skill Development Fund during the next year.

Urban Development and Housing: Existing scheme of interest subvention of 1% on housing loan further liberalized, existing housing loan limit enhanced to 25 lakh for dwelling units under priority sector lending, Provision under Rural Housing Fund enhanced to Rs 3,000 crore, Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana to benefit economically weaker sections

Micro, Small & Medium Enterprises: Rs 5,000 crore to be provided to SIDBI for refinancing incremental lending by banks to these enterprises. Rs 3,000 crore to be provided to NABARD to provide support to handloom weaver co-operative societies.

INVESTMENT ENVIRONMENT

Discussions underway to further liberalise the FDI policy.

SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirements for equity schemes.

To enhance flow of funds to infrastructure sector, the FII limit for investment in corporate bonds issued in infrastructure sector being raised.

To take the process of financial sector reforms further, various legislations proposed in 2011-12.

Amendments proposed to the Banking Regulation Act in the context of additional banking licences to private sector players.

Rs. 6,000 crore to be provided during 2011-12 to enable public sector banks to maintain a minimum of Tier ICRAR of 8%.

Rs. 500 crore to be provided to enable Regional Rural Banks to maintain a CRAR of at least 9% as on March 31,2012.

“India Microfinance Equity Fund” of Rs. 100 crore to be created with SIDBI. Government considering putting in place appropriate regulatory framework to protect the interest of small borrowers.

“Women’s SHG’s Development Fund” to be created with a corpus of Rs. 500 crore. Rural Infrastructure Corpus of RIDF XVII to be raised from Rs. 16,000 crore to Rs.18,000 crore.

TAX PROPOSALS

DIRECT TAXES

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% on domestic companies proposed to be reduced to 5%.

Rate of Minimum Alternative Tax proposed to be increased from 18% to 18.5% 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% tax on dividends received by an Indian company from its foreign subsidiary.

Benefit of investment linked deduction extended to businesses engaged in the production of fertilizers.

Investment linked deduction to businesses developing affordable housing.

Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200%.

System of collection of information from foreign tax jurisdictions to be strengthened.

A net revenue loss of Rs. 11,500 crore estimated as a result of proposals.

INDIRECT TAXES

Excise Duty

Central Excise Duty retained at 10%.

Reduction in number of exemptions in Central Excise rate structure.

Nominal Central Excise Duty of 1% imposed on 130 additional items in the purview of excise duty.

Lower rate of Central Excise Duty enhanced from 4% to 5%.

Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 %.

Scope of exemptions from Excise Duty enlarged to include equipments needed for storage and warehouse facilities on agricultural produce.

A concessional rate of Central Excise Duty extended to batteries imported by manufacturers of electrical vehicles.

Concessional Excise Duty of 10% to vehicles based on Fuel cell technology.

Reduction in Excise Duty on kits used for conversion of fossil fuel vehicles into Hybrid vehicles.

Excise Duty on LEDs reduced to 5% Full exemption from basic Excise Duty granted to enzyme based preparation for pre-tanning.

Parallel Excise Duty exemption for domestic suppliers producing capital goods needed for expansion of existing mega or ultra mega power projects.

Customs Duty

Peak rate of Custom Duty held at its current level

Basic Custom Duty reduced for specified agricultural machinery from 5% to 2.5%.

Basic Custom Duty reduced on micro-irrigation equipment from 7.5% to 5%.

De-oiled rice bran cake to be fully exempted from basic Custom Duty. Export Duty of 10% to be levied on its export.

Rate of Export Duty for all types of iron ore enhanced and unified at 20% ad valorem. Full exemption from Export Duty to iron ore pellets.

Basic Custom Duty on two critical raw materials of cement industry viz. petcoke and gypsum is proposed to be reduced to 2.5%.

Cash dispensers fully exempt from basic Customs Duty.

Full exemption from basic Customs Duty extended to batteries imported by manufacturers of electrical vehicles.

Exemption granted from basic custom duty parts/assemblies needed for Hybrid vehicles.

Basic Customs Duty on solar lantern reduced from 10% to 5%.

Full exemption from basic Customs Duty to Crude Palm Stearin used in manufacture of laundry soap.

Full exemption from basic Customs Duty to bio-asphalt and specified machinery for application in the construction of national highways

Scope of exemptions from basic Customs Duty for work of art and antiquities extended to apply for exhibition or display in private art galleries open to the general public.

Exemption from Import Duty for spares and capital goods required for ship repair units extended to import by ship owners.

Concessional basic Custom Duty of 5% and CVD of 5% available to newspaper establishments for high speed printing presses extended to mailroom equipment.

Proposals relating to Customs and Central Excise estimated to result in a net revenue gain of Rs. 7,300 crore.

Service Tax

Standard rate of Service Tax retained at 10%

Hotel accommodation in excess of Rs. 1,000 per day and service provided by air

conditioned restaurants that have license to serve liquor to come into the tax net

All services provided by hospitals with 25 or more beds with facility of central air conditioning will be taxed

Service Tax on air travel both domestic and international raised.

Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net.

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 4,000crore. Proposals relating to Direct Taxes estimated to result in a revenue loss of Rs 11,500crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs. 11,300crore resulting in a net loss of Rs 200crore from the taxes.