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Budget 2011 | Highlights & FM’s speech

Budget 2011 | Highlights & FM’s speech
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First Published: Mon, Feb 28 2011. 05 10 PM IST
Updated: Mon, Feb 28 2011. 05 10 PM IST
Union finance minister Pranab Mukherjee on Monday presented to Parliament the budget for the coming financial year beginning in April.
The Finance Minister’s Speech (Download here)
Following are the highlights of the budget:
Borrowing
• Gross market borrowing for 2011-12 seen at Rs4.17 trillion (Reuters forecast Rs4.5 trillion)
• Net market borrowing for 2011-12 seen at Rs3.43 trillion (Reuters forecast Rs3.77 trillion)
• Revised gross market borrowing for 2010-11 at Rs4.47 trillion
Fiscal deficit
• Fiscal deficit seen at 5.1% of GDP in 2010-11
• Fiscal deficit seen at 4.6% of GDP in 2011-12
• Fiscal deficit seen at 3.5% of GDP in 2013-14
Spending
• Total expenditure in 2011-12 seen at Rs12.58 trillion
• Plan expenditure seen at Rs4.41 trillion in 2011-12, up 18.3%
Revenue
• Gross tax receipts seen at Rs9.32 trillion in 2011-12
• Corporate tax receipts seen at Rs3.6 trillion in 2011-12
• Tax-to-GDP ratio seen at 10.4% in 2011-12; seen at 10.8% in 2012-13
• Customs revenue seen at Rs1.52 trillion in 2011-12
• Factory gate duties seen at Rs1.64 trillion in 2011-12
• Non-tax revenue seen at Rs1.25 trillion in 2011-12
• Service tax receipts seen at Rs82,000 crore in 2011-12
• Telecoms fees, auction of broadband spectrum to raise Rs29,650 crore in 2011-12
Subsidies
• Subsidy Bill in 2011-12 seen at Rs1.44 trillion
• Food Subsidy Bill in 2011-12 seen at Rs60,570 crore
• Revised Food Subsidy Bill for 2010-11 at Rs60,600 crore
• Fertiliser Subsidy Bill in 2011-12 seen at Rs50,000 crore
• Revised Fertiliser Subsidy Bill for 2010-11 at Rs55,000 crore
• Petroleum Subsidy Bill in 2011-12 seen at Rs23,640 crore
• Revised Petroleum Subsidy Bill in 2010-11 at Rs38,400 crore
• State-run oil retailers to be provided with Rs20,000 crore cash subsidy in 2011-12
Growth, inflation expectations
• Inflation seen at 5% in 2011-12
• Economy expected to grow at 9% in 2012, plus or minus 0.25%
Taxes
• Standard rate of excise duty held at 10%
• Service tax rate held at 10%
• Scope of service tax to be widened
• Minimum alternate tax raised to 18.5% from 18%
• Iron ore export duty raised to 20%
• Personal income tax exemption limit raised to Rs1,80,000
Disinvestment
• Disinvestment in 2011-12 seen at Rs40,000 crore
Policy reforms
• Food Security Bill to be introduced this year
• Foreign direct investment policy to be liberalized further
• Infrastructure debt funds to be created
• Infrastructure growth to be boosted with tax-free bonds of Rs30,000 crore
• Foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure to be raised by $20 billion
• To permit Securities and Exchange Board of India (Sebi) registered mutual funds to access subscriptions from foreign investments
• Public Debt Bill to be introduced in parliament soon
Sector spending
• To allocate more than Rs1.64 trillion to defence sector in 2011-12
• Corpus of rural infrastructure development fund raised to Rs18,000 crore in 2011-12
• To provide Rs20,150 crore capital infusion in state-run banks in 2011-12
• To allocate Rs52,050 crore for the education sector
• To raise health sector allocation to Rs26,760 crore
Agriculture
• To focus on removing supply bottlenecks in the food sector
• To raise credit flow target to agriculture sector to Rs4.75 trillion
• Give 3% interest subsidy to farmers in 2011-12
• Cold storage chains to be given infrastructure status
• To provide Rs300 crore for 60,000 hectares under palm oil plantation
• Actively considering new fertilizer policy for urea
Finance minister on the state of the economy
• “Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future.”
• “At times the biggest reforms are not the ones that make headlines, but the ones concerned with details of governance which affect the everyday life of aam aadmi (common man). In preparing this year’s budget, I have been deeply conscious of this fact.”
• Food inflation remains a concern
• Current account deficit situation poses some concern
• Must ensure private investment is sustained
• “The economy has shown remarkable resilience.”
Finance minister on governance
• “Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability ... such an impression is misplaced.”
• Corruption is a problem, must fight it collectively
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First Published: Mon, Feb 28 2011. 05 10 PM IST