Union Budget 2012-13

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Introduction .

The Union Budget Of INDIA was Presented By Finance Minister Pranab Mukherjee In Lok Shabha on 16th March 2012. Late presentation of Budget happened Because of Election held in 4 states and 1 union territory (Punjab, Uttar Pradesh, Manipur, Uttarakhand and Goa)
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The

Inflow and Outflow

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Approach To Budget..
* For Indian economy, recovery was interrupted this year due to intensification of debt crises in Euro zone, political turmoil in Middle East, rise in crude oil price and earthquake in Japan. * GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years. * India however remains front runner in economic growth in any crosscountry comparison. * Monetary and fiscal policy response for better part of past 2 years aimed at taming domestic inflationary pressure. * Growth moderated and fiscal balance deteriorated . * core sectors and manufacturing show signs of recovery. * At this juncture, it is necessary to take hard decision to improve macroeconomic environment and strengthen domestic growth drivers. * Twelfth Five Year Plan to be launched with the aim of "faster, sustainable and more inclusive growth". Five objectives identified to be addressed effectively in ensuing fiscal year.

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Overview of Indian Economy.. per cent in real terms in 2011* GDP growth estimated at 6.9
* Headline inflation expected to moderate further in next few months and remain stable thereafter. * Steps taken to bridge gaps in distribution, storage and marketing systems have helped in more effective management of inflation. * Developments in India's external trade in the first half of current year have been encouraging. Diversification in export and import market achieved.

12. Slowdown in comparison to preceding two years is primarily due to deceleration in industrial growth.

* Current account deficit at 3.6 per cent of GDP for 2011-12 and reduced net capital inflow in the 2nd and 3rd quarters put pressure on exchange rate. * India's GDP growth in 2012-13 expected to be 7.6 per cent +/6/12/12 0.25 per cent.

FRBM Act..
* Introduction of amendments to the FRBM Act as part of Finance Bill, 2012. * Concept of "Effective Revenue Deficit" and "Medium Term Expenditure
6/12/12 * Framework" statement are two

Subsidies.
* Some subsidies, while being inevitable, may become undesirable if they compromise the macroeconomic fundamentals of economy. * Subsidies related to administering the Food Security Act will be fully provided for.
6/12/12 * Endeavour to keep central

Tax Reforms
* DTC Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee. * GST network to be set up as a National Information Utility and to become operational by August 2012.

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Income Tax
Tax

collection up 15%

Income Tax proposals:

Personal Income Tax slabs for individuals relaxed

6/12/12 Exemption limit

enhanced from

New Slabs
Upto Rs Rs

Rs 2 lakh Nil

2-5 lakh - 10% 510 lakh 20% Rs 10 lakh 30%

Above

Interest

from savings account up 6/12/12 to Rs 10,000 to be exempt from

Corporate Tax
Corporate

Tax structure left unchanged tax on certain overseas borrowings reduced to 5% from 20% Transaction Tax cut by 20% for stock market orders
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Withholding

Securities

Service tax
Service

Tax rate up from 10% to

12%
Higher

Service Tax to add Rs 186.6 bn in revenue baggage allowance for Indians increased to Rs 35,000 allowance for

Duty-free

6/12/12 Duty-free baggage

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