Thursday, July 9, 2020
Finance

BUDGET ESTIMATE 2011 - 2012

Key Features of Budget 2011-2012

OVERVIEW OF THE ECONOMY
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Gross Domestic Product (GDP) estimated to have grown at 8.6 per cent in 2010-11 in real terms. Economy has shown remarkable resilience.
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Continued high food prices have been principal concern this year.
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Consumers denied the benefit of seasonal fall in prices despite improved availability of food items, revealing shortcomings in distribution and marketing systems.
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Monetary policy measures taken expected to further moderate inflation in coming months.
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Exports have grown by 29.4 per cent, while imports have recorded a growth of 17.6 per cent during April to January 2010-11 over the corresponding period last year
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Indian economy expected to grow at 9 per cent with an outside band of +/- 0.25 per cent in 2011-12.
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Average inflation expected lower next year and current account deficit smaller.

Budget Estimates 2011-12

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Gross Tax receipts are estimated at Rs 9,32,440 crore.
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Non-tax revenue receipts estimated at Rs 1,25,435 crore.
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Total expenditure proposed at Rs 12,57,729 crore.
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Increase of 18.3 per cent in total Plan allocation.
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Increase of 10.9 per cent in the Non-plan expenditure.
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XI Plan expenditure more than 100 per cent in nominal terms than envisaged for the Plan period.
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Increase of 23 per cent in Plan and Non-plan transfer to States and UTs.
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Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to 5.1 per cent of GDP in RE 2010-11.
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Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
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Fiscal Deficit to be progressively reduced to 3.5 per cent by 2013-14.
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“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.
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All subsidy related liabilities brought into fiscal accounting.
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Net market borrowing of the Government through dated securities in 2011-12 would be Rs 3.43 lakh crore.
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Central Government debt estimated at 44.2 per cent of GDP for 2011-12 as against 52.5 per cent recommened by the 13th Finance Commission

TAX PROPOSALS

Direct Taxes

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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.
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Exemption limit enhanced and qualifying age reduced for senior citizens.
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Higher exemption limit for Very Senior Citizens, who are 80 years or above.
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Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
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Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
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Tax incentives extended to attract foreign funds for financing of infrastructure.
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Additional deduction of ` 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year.
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Lower rate of 15 per cent tax on dividends received by an Indian company from its foreign subsidiary.
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Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers.
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Investment linked deduction to businesses developing affordable housing.
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Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 per cent.
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System of collection of information from foreign tax jurisdictions to be strengthened.
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A net revenue loss of Rs 11,500 crore estimated as a result of proposals.

Indirect Taxes

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To stay on course for transition to GST.
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Central Excise Duty to be maintained at standard rate of 10 per cent.
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Reduction in number of exemptions in Central Excise rate structure.
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Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.
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Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
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Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent.
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Peak rate of Custom Duty held at its current level.

Service tax

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Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.
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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.
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Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.
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Service Tax on air travel both domestic and international raised.
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Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net.
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All individual and sole proprietor tax payers with a turn over upto Rs 60 lakh freed from the formalities of audit.
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To encourage voluntary compliance the penal provision for Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws.
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Proposals relating to Service Tax estimated to result in net revenue gain of Rs 4,000 crore.
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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.

 

Source: http://indiabudget.nic.in