1. WEL COME
TO
BEC-DOMS
BAGALKOT
Monday, November 14,
1
2011

2. INDIAN CENTRAL BUDGET
2011-12
Monday, November 14, 2011 2

3. CONTENTS
 Introduction
 Budget Estimation
 Key Features
 Taxation
 Subsidies
 Types of Sectors
 Impacts
 Conclusion
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3
2011

4. INTRODUCTION
Budget is plan for income and expenditure over a future period
which is supposed to achieve stated objectives - in a government's
case raising taxes and other revenue and spending to provide services
such as defense, education or social security etc...
The Union Budget of India for 2011-2012 was present by
Pranab Mukherjee the finance Minister of India on 28th February,
2011. This budgetary proposals would be applicable from 1st April
2011 to 31st March 2012.
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5. BUDGET ESTIMATION 2011-2012
 Total expenditure proposed at ` 12,57,729 crores.
 Increase of 18.3 per cent in total Plan allocation.
 Increase of 10.9 per cent in the Non-plan expenditure.
 Increase of 23 per cent in Plan and Non-plan transfer to States
and UTs.
 Fiscal Deficit brought down from 5.5 per cent in BE 2010-11 to
5.1 per cent
 Fiscal Deficit kept at 4.6 per cent of GDP for 2011-12.
 Fiscal Deficit to be progressively reduced to 3.5 per cent by 2013-
14.
 “Effective Revenue Deficit” estimated at 2.3 per cent of GDP .
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5
2011

6. 2010-11 (Revised estimates) 2011-12 (Budget Estimates)
Sector Share(%) in Total Central Government Sector Share(%) in Total Central Government
Budget Allocations , 2010-11(RE) Budget Allocations , 2011-12 (BE)
Total Agri Total Agri
Total 1.9 Total
2.0 Others Defence
Defence
Others 20.7 16.1
15.6
22.2
24.2% (Transfer to 28 % Transfers to
Social States/UTs
Social States & UTs) Sector
Sector
20.4 72 % Interest
20.4 75.8 % ( Interest Payments + Others)
Payments
+ Others) Total Total
Total
Total Finance Industry(He Finance
Industry 36.1 avy+Small) 36.8
(Heavy+Sm Total Home 0.2 Total Home
all), 0.2 3.4 3.9
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2011

7. Key Features of Budget 2011-12
OPPORTUNITIES
 Swift and broad based growth in 2010-11 has put the
economy back to its pre-crisis growth trajectory. Fiscal
consolidation has been impressive.
 Significant progress in critical institutional reforms that
would set the pace for double-digit growth in the near future.
 Dynamism in the rural economy due to scaled up flow of
resources to the rural areas.
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7
2011

8. CHALLENGES
 Structural concerns on inflation management to be addressed by
improving supply response of agriculture to the expanding
domestic demand and through stronger fiscal consolidation.
 Implementation gaps, leakages from public programmes and the
quality of outcomes pose a serious challenge.
 Impression of drift in governance and gap in public accountability
is misplaced. Corruption as a problem to be fought collectively.
Government to improve the regulatory standards and
administrative practices.
 Inputs from colleagues on both sides of House are important in the
wider national interest.
 Budget 2011-12 to serve as a transition towards a more
transparent and result oriented economic management system in
India.
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2011

9. -Printers
-Paper
-
-Soap
Dearer -Steel
-Diapers &
Sanitary napkins
-Legal Services -Homoeopathic
Medicines
-Healthcare in -Yarn/raw silk
top – end Pvt. -Mobile Phones
hospitals. -Agarbatti
-Solar Lantern,
-Branded Cloths LED Lights
-Battery Driven-
-Gold Vehicles
-Agriculture
-A/c restaurants machinery
serving Liquor
Cheaper
-Hotel Services
Monday, November 14, 2011 9

10. Taxation
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10
2011

11. Direct Taxes
 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.
 Exemption limit enhanced and qualifying age reduced for senior
citizens.
 Higher exemption limit for Very Senior Citizens, who are 80 years
or above
 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.
 Tax incentives extended to attract foreign funds for financing of
infrastructure.
 Additional deduction of Rs 20,000 for investment in long-term
infrastructure 2011
Monday, November 14, bonds proposed to be extended for one more year
11

12. Contd….
 Lower rate of 15 per cent tax on dividends received by an Indian
company from its foreign subsidiary.
 Benefit of investment linked deduction extended to businesses
engaged in the production of fertilisers.
 Investment linked deduction to businesses developing affordable
housing.
 Weighted deduction on payments made to National Laboratories,
Universities and Institutes of Technology to be enhanced to 200
per cent.
 System of collection of information from foreign tax jurisdictions
to be strengthened.
 A net revenue loss of Rs 11,500 crore estimated as a result of
proposals.
Monday, November 14, 2011 12

13. Indirect Taxes
 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.
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13
2011

14. Service Tax
 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.
 Tax on all services provided by hospitals with 25 or more beds with
facility of central air conditioning.
 Service Tax on air travel both domestic and international raised.
 All individual and sole proprietor tax payers with a turn over upto
Rs 60 lakh freed from the formalities of audit.
 To encourage voluntary compliance the penal provision for Service
Tax are being rationalised. Similar changes being carried out in
Central Excise and Custom laws.
 Proposals relating to Service Tax estimated to result in net revenue
gain of Rs 4,000 crore.
 Proposals relating to Direct Taxes estimated to result in a revenue
loss Monday, Rs 11,500 crore and those related to Indirect Taxes
of November 14,
estimated to result in net revenue gain of Rs 11,300 crore. 14
2011

15. Personal Taxation
For Men:
Current Slabs (`) Proposed Slabs (`) Basic rate of
tax
Upto 1,60,000 Upto1,80,000 Nil
1,60,001 to 5.00,000 1,80,001 to 5,00,000 10%
5,00,001 to 8,00,000 5,00,001 to 8,00,000 20%
Above 8,00,001 Above 8,00,001 30%
Monday, November 14, 2011 15

16. For WOMEN
No change in tax Structure
Current Slabs (`) Proposed Slabs (`) Basic rate of tax
Upto 1,90,000 Upto 1,90,000 Nil
1,90,001 to 5,00,000 1,90,001 to 5,00,000 10%
500,001to800,000 5,00,001 to 8,00,000 20%
Above 8,00,000 Above 8,00,000 30%
Monday, November 14, 2011 16

17. o Age for eligibility reduced from 65 years to 60 Years
Current Slabs (`) Proposed Slabs (`) Basic rate of
tax
Upto 2,40,000 Upto 2,50,000 Nil
2,40,001 to 5,00,000 2,50,001 to 5,00,000 10%
5,00,001 to 8,00,000 5,00,001 to 8,00,000 20%
Above 8,00,001 Above 8,00,001 30%
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2011

18. For Senior Citizen (80years & above)
Hike in exemption limit to ` 5 lakh will result on big gains
Current Slabs (`) Proposed Slabs (`) Basic rate of tax
Upto 2,40,000 Upto 5,00,000 Nil
2,40,001 to 5,00,000 - 10%
500,001 to 8,00,000 5,00,001 to 8,00,000 20%
Above 8,00,001 Above 8,00,001 30%
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18
2011

19. SUBSIDIES
o Food subsidy bill in 2011-12 seen at 605.7 billion rupees
o Revised food subsidy bill for 2010-11 at 606 billion rupees
o Fertiliser subsidy bill in 2011-12 seen at 500 billion rupees
o Revised fertiliser subsidy bill for 2010-11 at 550 billion
rupees
o Petroleum subsidy bill in 2011-12 seen at 236.4 billion
rupees
o Revised petroleum subsidy bill in 2010-11 at 384 billion
rupees
o State-run oil retailers to be provided with 200 billion rupee
cash subsidy in 2011-12
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19
2011

20. Types of Sectors
Defence
Education
Rural Development
Infrastructure & Industry
Agriculture
Health
Banking
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2011

21. Defence
 In the Union Budget for the year 2011-2012, the Indian Finance Ministry has
given special attention to defence by increasing the defence outlay.
 As per the defence budget for the fiscal 2011-12, the Indian Finance Ministry
has given a 11.6 per cent hike which amounts to $34 billion.
The total budgetary allocation:
 Indian Army - $14.2 billion.
 Indian Navy $2.35 billion
 Indian Air Force (IAF) $3.53 billion
 Defence Research and Development Organisation (DRDO) $1.25 billion.
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2011

22. Education
 Allocation for education increased by 24 per cent over
current year.
 Sarva Shiksha Abhiyan 21,000 crore allocated, which is 40
per cent higher than Budget for 2010-11.
 Pre-matric scholarship scheme to be introduced for needy
SC/ST students studying in classes IX and X.
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22
2011

23. Rural Development
12 percent increase in the department's plan outlay
from Rs.66,100 crore in the current fiscal to Rs.74,100
crore for 2011-12
Allocation for Pradhan Mantri Gram Sadak Yojana is
proposed to be increased to Rs 12,000 crore. For Indira
Aawas Yojana, the allocation has been increased to Rs
8,800 crore.
Monday, November 14, 2011 23

24. Infrastructure and Industry
 Allocation of ` 2,14,000 crore for infrastructure in
2011-12. This is an increase of 23.3 per cent over
2010-11. This also amounts to 48.5 per cent of total
plan allocation.
 Government to come up with a comprehensive policy
for further developing.
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2011

25. Agriculture Sector
 Allocation under Rashtriya Krishi Vikas Yojana (RKVY)
increased from` 6,755 crore to ` 7,860 crore.
 Credit flow for farmers raised from ` 3,75,000 crore to `
4,75,000 crore in 2011-12.
 Interest subvention proposed to be enhanced from 2 per cent
to 3 per cent for providing short-term crop loans to farmers
who repay their crop loan on time.
 In view of enhanced target for flow of agriculture credit,
capital base of NABARD to be strengthened by ` 3,000 crore in
phased manner.
 10,000 crore to be contributed to NABARD’s Short-term Rural
Credit fund for2011-12.
25

26. Health
 Plan allocations for health stepped-up by 20 per cent.
 Scope of Rashtriya Swasthya Bima Yojana to be expanded to
widen the coverage.
 Centralised air conditioned (AC) hospitals with more than 25
beds brought under 10 percent service tax
 Diagnostic service providers levied 10 percent service tax
 The finance minister also proposed to provide outright
concession to factory-built ambulances in place of the existing
refund-based concession from excise duty
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26
2011

27. Banking
 The insurance legislation, if successfully passed in parliament, would
increase the FDI limit to 49 percent from the current 26 percent
 USD 6.6 bn to National Bank for Agriculture and Rural Development
(NABARD) from Union Budget 2011
 Home loan limit hiked to USD 55,000 for priority sector lending
 Rural housing fund to get USD 664 m
 Indian micro-finance equity with Small Industries Development Bank of
India (SIDBI) to be formed with USD 22 m
 Banking Laws Amendment Bill, SBI (State Bank of India) Subsidiaries Bill
and BIFR (Board for Industrial and Financial Reconstruction) Bill will be
introduced this year
 The LIC bill would increase the share capital of Life Insurance Corporation
(LIC) to USD 22 m from its current USD 1.1 m
 Financial Inclusion - Target of providing banking facilities to all 73,000
habitations having a population of more than 2,000 to be completed during
2011-2012
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2011

28. Impacts on Sectors
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2011

29. SECTORS EFFECTS JUSTIFICATION
Defence Positive The Union Budget 2010
-11 gave important in
the development of
agriculture and schemes
for farmers.
Agriculture Positive The budget is positive for
Banking sector. It
reduces the percentage
on income tax,
agriculture credits, on
excise duty etc…
Health Positive Education sector is
positive in budget
because Free &
compulsory education
act mainly privileges
given up to the age of 6-
14 years notified the
achievements of Sarva
Shiksha Abhiyan(SSA)
Monday, November 14,
2011 launched by the Govt.
29

30. Education Positive It has allowed rs 1900
cores by the
Government to IT
sector for unique
identity project.
Infrastructure & Positive Much important given to
Industry Health sector , Finance
minister proposed offer
health facilities & also
realized rs 22,300 crore
for the welfare of society.
Banking Neutral Excise tariff to be charged on
Diesel and Petrol at Re 1 on
the every litre. This can also be
translated as an increase in
price of Rs 2.58 per litre and
Rs 2.67 per litre on diesel and
petrol respectively
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30
2011

31. Conclusion
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2011

32. Thank You…
Monday, November 14, 2011 32