Highlights of Union Budget 2012-13

After a long wait, Union Finance Minister Pranab Mukherjee delivered his annual budget for 2012-2013. He focused on subsidy management and equity investment this time and came up with several schemes that would not only widen the social safety net but make sure that the GDP keeps growing at a much faster rate. He also announced incentives for people who are interested to invest in the share market. Given are the highlights from the Budget 2012-2013.

• This time the excise duty on big cars has been raised from 22 per cent to 24 per cent.
• The luxury items, eating out, travelling in aeroplanes and other leisure activities will be costlier from now onwards.
• Service tax rates have been increased from 10 to 12 per cent.
• Service tax net was surprisingly widened so that it can include most sectors.
• A special team would be set up to study common tax code for service tax and central excise.
• Now the copyright of cinematography would be exempted from service tax.
• Mostly all the services, with the exception of 17 in the negative list, would be brought under service tax net.
• This time the direct taxes proposals would result in net revenue loss of Rs 4,500 crore.
• If someone has hoarded assets abroad he/ she has to report that. This has been made compulsory.
• Securities Transaction Tax (STT) has been reduced from 0.125 per cent to 0.1 per cent.
• Capital gains tax on residential property would now be exempted if the person selling the property can show that the sale proceeds have been used for SMEs.
• Health sector is cheaper now. There would be a tax exemption of up to Rs 5,000 for health insurance for the annual preventive health checkups.
• Withholding tax have been lowered from 20 pc to 5 pc for 3 years at least for now on power, airlines, road and brides, ports and shipyard, fertilisers, dams and affordable houses.
• No change for corporate as the corporate tax rate remains as it is.
• No taxes have been levied on saving bank interest up to 10,000 for those people who have an income up to Rs 5 lakh.
• For people who have an income of 2 lakh to 5 lakh, they would have to pay a tax at 10 per cent rate.
• The individual tax payer’s exemption limit has been increased to Rs 200,000 from Rs 180,000.
• DTC rates have been newly introduced on personal income tax.
• Now there is revenue deficit for 2012-13 that is projected at Rs 1,85,752 crore.
• The total debt incurred by Centre will be now 45 per cent of the GDP.
• The budget is convinced to reduce the fiscal deficit to 5.1 per cent of GDP in the next fiscal.
• The fiscal deficit at 5.9 per cent of GDP is now in the revised estimates for 2011-12.
• The direct tax collection now has fallen short by Rs 32,000 crore in the current fiscal.
• The non-plan expenditure of Rs 9,69,900 crore in 2012-13, which is 8.7 per cent higher than that in the current year.
• The net tax receipts of the Centre in 2011-12 now stands at Rs 7,71,071 crore.
• The income and corporate tax collections have fallen this time.
• 40 crore Aadhar enrollment to begin from the month of April.
• Rs 193,407 crore have been kept as provision for defence services in 2012-2013.
• Very interestingly this year the white paper on black money would be tabled in the current session of Parliament.
• The information on black money that was stashed abroad has started coming in; prosecution might be executed in some cases.
• National Rural Livelihood Mission to get a boost as Rs 3,915 crore to be spent on it.
• National Skill Development Corporation in 2012-13 would be getting Rs 1000 crore this time.
• The interest subvention of 7 pc to be allotted for women self groups for loans up to Rs 3 lakh, and an additional 3 pc for those who are making timely repayment.
• National Rural Health Mission has been allotted to receive Rs 20,822 crore against Rs 18,115 crore this year.
• Rs 20,000 crore have to be spent on rural infrastructure development, which includes Rs 5,000 cr for creating the warehousing facilities.
• The National Backward Region Grant scheme outlay has been raised by 22 per cent to Rs 12,040 crore.
• Good news for villagers. The allocation for rural drinking water and sanitation schemes have been increased from Rs 11,000 cr in FY 12 to Rs 14,000 cr in 2012-13.
• Rs 15,850 crores have to be allocated to Integrated Child Development Scheme in 2012-13 as against Rs 10,000 crore in this fiscal.
• Government to create PDS through Adhaar platform by December to fulfil the objectives of Food Security Bill.
• National Mission on Food Processing will start in 2012-13. Government will be providing Rs 10,000 crore to NABARD for refinancing regional rural banks.
• Agriculture credit target to be increased by Rs 100,000 crores to Rs 5,75,000 crores.
• Government will set up a Rs 5000 crore venture fund for financing the MSME sector.
• Pranab Mukherjee has promised that India will become self-sufficient in urea production in the coming five years.
• There are proposals to allow foreign airlines to participate directly or indirectly.
• External commercial borrowings up to USD one billion would be allowed for aviation sector.
• 8,800-km highway to be developed under the National Highway Development Project in 2012-13.
• Government to double tax free bonds for the purpose of infrastructure financing to Rs 60,000 crore in the next Fiscal Year.
• Infrastructure investment in 12th Plan will go up to Rs 50 lakh crore and the half of it will come from private sector.
• Rs 15,888 crores to be allocated for capitalisation of the public sector and regional rural banks and NABARD.
• IPO equity offer above Rs 10 crore to be made electronically from now onwards in the capital market reforms.
• Income Tax deduction of 50 per cent on investments of up to Rs 50,000 in savings scheme will now be named after Rajiv Gandhi.
• Subsidies to be provided for LPG, kerosene.
• Efforts will be taken to arrive at a consensus with the state governments to allow FDI in multi-brand retail up to 51 per cent.
• Now the government will increase Rs 30,000 crore in 2012-13 from disinvestment of stake in PSUs.
• Direct Tax Code (DTC) Bill to be enacted as soon as possible.
• Pilot project that would directly transfer subsidiary for kerosene would be taken up in Alwar, Rajasthan.
• Food Security Act to be provided for and subsidy to be 2 per cent of GDP for coming two years.
• Government to take the full responsibility to provide for food subsidy and food security act in 2012-13.
• Pranab Mukherjee has promised that GDP will grow by 7.6 per cent in 2012-13; plus, minus 0.25 per cent.
• Headline inflation will moderate more in the coming months and would then remain stable after that.

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