Union Budget-2011-12

Union Budget-2011-12
Budget is an estimated or planned receipts and expenditure account for the ensuing year. It is not a policy statement.
There is no question of sitting for a judgment with regard to certain aspects of the Budget. The evaluation has to be consisted of the following factors:
The Economic Analysis
Agricultural
Industrial
Technological
Educational
Public Health
Transport
Scientific Development
National Defense and Security
Research and Development
The political Analysis
The Financial Analysis
Social Analysis
Prior to the evaluation we need to understand that the Budgets are not policy statements of the Govt. but however, project the design of the future policies which might be involved- an overview of the shape of things to happen or plan to happen.
Let us make a financial assessment of the Budget:
Total Revenue Receipts Rs. 9.32 Trillion - 2011-12
Total Expenses: Rs. 12.58 Trillion- 2011-12
Total Plan Expenditure: Rs. 4.41 Trillion- 2011-12
Fiscal Deficit: Rs. 7.67 trillion- 2011-12
5.1% of GDP (2010-11)
4.6% of GDP (2011-12)
3.5% of GDP (2013-14)
Revenue Receipts:
Gross Tax Receipts: Rs. 9.32 Trillion -2011-12
Non-tax Revenue Receipts: Rs. 1.25 Trillion - 2011-12
Corporate Tax Receipts: Rs. 3.6 Trillion – 2011-12
Customs revenue: Rs. 1.52 Trillion (2011-12)
Factory Gate collection: Rs. 1.64Trillion (2011-12)
Service Tax Receipts: Rs. 8.20 Billion (2011-12)
Indirect Taxes: Rs. 113 Billion (2011-12)
Market borrowing; Rs. Rs. 3.4 Trillion- 2011 -12(planned)
Revised/Actual borrowing 2010-11
Rs. 4.47Trillion (3.45 Planned)
Disinvestments: Rs. 400 Billion (51%-Govt.Holding)

Distribution –Expenses (Budgetary Plans)
Subsidies:
Total provision: Rs. 1.44 Trillion -2011-12
Food Subsidy: Rs. 605.7Billion -2011-12
Fertilizer: Rs. 500.0 Billion -2011-12
Petroleum: Rs. 550.0 Billion-2011-12
Revised:
Food: Rs. 606 Billion
Fertilizer: Rs. 550Billion
Petroleum: Rs. 384 Billion
State runs Oil Retailers: Rs. 200.0 Billion Cash Subsidy
Tax Proposals
Standard Rate of Excise Duty: 10%
Service Tax : 10%
Iron Ore export duty 20%
Nominal Excise Duty on 130 items: 1%
(Essential commodities exempted-Basic food, fuel, Gold, and silver)
Peak Rate of Custom Duty: 10%
Agro Machinery-custom duty; 4.5% (earlier 5%)
Service Tax on hotel charges above Rs.1000/- 10%
Service Tax on air Travel- Domestic: Rs.50/-
Service Tax on Air Freight-International; Rs.250/-
Service tax on Higher classes-Inter national; 10%
Personal Income Tax
Exemption Limit: Standard: Rs.180000/-
Senior Citizen: Rs. 2.50 Lacs. (60 years)
Senior citizen: Rs. 5.0 Lacs. (80 years)
Income tax Rates:
Normal Rates:
Income Slab Tax Rate
Upto180000 Nil
180001 to 300000 10%
300001 to 500000 20%
500001 upwards 30%
10% surcharge if Income exceeds Rs. 1000000/-
3% Education cess on income inclusive of surcharge
The surcharge is only on the amount in excess of Rs. 1000000/-
Rate on senior citizens: For Women:
Upto Rs. 240000/- Nil Upto 190000/- Nil
240001 to 500000 10% 190001 to 500000 10%
500001 to 800000 20% 500001 to 800000 20%
80000000 upwards 30% 800000 upwards 30%
Policy reforms enunciated:
To create infrastructure for debt funds.
Liberalize FDI Policies
Tax-free Bonds for 300 Bills Range for Infrastructure build up
Food Security Bill to be introduced for 2011-12
Mutual Fund to have Foreign Investments with SEBI’s permission.
FII limit increased to $20 Billion by 5 Years.
Independent set up for Debt Management.
GST introduction through out the country
A new Companies Bill.
The Budget as such is growth oriented both in the Rural Sector and at the Industrial sector. It is apparent that there are no specific measures to contain inflation. It might be due to the fact the inflation will have its play for sometime more as one has to pay the price for progress and development. With the growth in the employment ratio the Purchasing Power Parity on the increase hence a certain amount of inflation will have to be sustained. Probably this might be the reason that the Finance Minister is keeping silence on this front.
It is not a political populace Budget and therefore there can be criticism from the political front. It is possible that the Budget do not make any reference to the foreign Black money held by Indian citizen owing to International commitments to unearth the same.

M.S.Kumaran