This term’s Budget that was supposed to come in as a short breather for the government that was crumbling under the weight of corruption, inflation and a global oil crisis unfortunately proved to be the same old wine in a new bottle without any mention of unemployment or inflation that is plaguing the Industry, leaving the rest of the nation to the mercy of Indra and Lakshmi (God of rain and Goddess of prosperity, as per Hindu belief) as Finance Minister Pranab Mukerjee said in the beginning of his budget speech, “I seek the blessings of Lord Indra to bestow on us timely and bountiful monsoons, I would pray to Goddess Lakshmi as well. I think it is a good strategy to diversify one's risks.” And then as the subsidiaries rolled out and a few new packages were announced came in another joke by the FM, “You must all be wondering why all new pancakes are being introduced at 300 crore, maybe because number three is lucky for me.”
- 5,000 crore to be provided to SIDBI for refinancing incremental lending by banks to these enterprises.
- 3000 crore to be provided to NABARD to provide support to handloom weaver co-operative societies which have become financially unviable due to non-repayment of debt by handloom weavers facing economic stress.
- Public sector banks to achieve a target of 15 per cent as outstanding loans to minority communities under priority sector lending at the earliest.
- Self assessment to be introduced in Customs to modernize the Customs administration.
- Proposal to introduce scheme for refund of taxes paid on services used for export of goods.
- Mega Cluster Scheme to be extended for leather products. Seven mega leather clusters to be set up during 2011-12.
- Jodhpur to be included for the development of a handicraft mega cluster.
- Share of manufacturing in GDP expected to grow from about 16 per cent to 25 per cent over a period of 10 years. Government will come out with a manufacturing policy.
- Various IT initiatives taken for efficient tax administration. These include e-filing and e-payment of taxes, adoption of ‘Sevottam’ concept by CBEC and CBDT, web based facility for tax payers to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity.
- Under Mission mode projects, funds released to 31 projects received from States/ UTs for computerization of Commercial taxes. This will allow States to align with roll out of GST.
- Bill to amend the Indian Stamp Act proposed to be introduced shortly.
- A new scheme with an outlay of ` 300 crore to be launched to provide assistance to States to modernize their stamp and registration administration and roll out e-stamping in all the districts in the next three years.
- A new simplified form ‘Sugam’ to be introduced to reduce the compliance burden of small tax payers falling within presumptive taxation.
- Three more benches of Settlement Commission to be set up to fast track the disposal of cases.
- Steps initiated to reduce litigation and focus attention on high revenue cases.
- Current surcharge of 7.5 per cent on domestic companies proposed to be reduced to 5 per cent.
- Rate of Minimum Alternative Tax proposed to be increased from 18 per cent to 18.5 per cent of book profits.
- To stay on course for transition to GST.
- Central Excise Duty to be maintained at standard rate of 10 per cent.
- Reduction in number of exemptions in Central Excise rate structure.
- Nominal Central Excise Duty of 1 per cent imposed on 130 items entering in the tax net.
- Lower rate of Central Excise Duty enhanced from 4 per cent to 5 per cent.
- Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 per cent.
- Peak rate of Custom Duty held at its current level
Important budget figures:
- Gross Tax receipts are estimated at ` 9,32,440 crore.
- Non-tax revenue receipts estimated at ` 1,25,435 crore.
- Total expenditure proposed at ` 12,57,729 crore.
- Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
- Net market borrowing of the Government through dated securities in 2011-12 would be 3.43 lakh crore.
- Central Government debt estimated at 44.2 per cent of GDP for 2011-12 as against 52.5 per cent recommended by the 13th Finance Commission
The FM said, “Swift and broad based growth in 2010-11 has put the economy back to its pre-crisis growth trajectory and fiscal consolidation has also been impressive.” He also took note of dynamism in the rural economy due to scaled up flow of resources to the rural areas. Reporting on the economic overview he said that Gross Domestic Product (GDP) estimated to have grown at 8.6 per cent in 2010-11 in real terms and the economy has shown remarkable resilience.
He admitted that consumers were denied the benefit of seasonal fall in prices despite improved availability of food items, revealing shortcomings in distribution and marketing systems, hence continued high food prices have been principal concern this year. He said that Indian economy is expected to grow at 9 per cent with an outside band of +/- 0.25 per cent in 2011-1, with average inflation expected to be lower next year and current account will also be deficit smaller. Further he added that 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 yea