Union Budget 2011-2012: Crucial Highlights

Dear readers, the budget is out. This year, it was expected that the Finance Minister would announce some populist measures so as to tackle the tumbling image of the current Government on account of ineffective Governance. The picture's a bit different. We find that the Budget is very much Growth-oriented & is trying to tackle the I word(read Inflation. On a still deeper look, we can attest that the Budget is a calm & composed one with its core aims very clear. Let us look at some of the most important announcements by the Finance Minster.

1. Electronic filing of TDS returns at source stabilised; simplified forms to be introduced for small taxpayers. These will be called 'Sugam'.

2. Standard rate of excise duty held at 10 percent

3. New Senior Citizen catagory- Very Senior Citizen of above 80 years of age; exemption limit Rs. 5 Lakh.

4. Reduction of 2.5% on Corporate Surcharge to 5% from previous 7.5%; a good move

5. Air fares dearer; Rs. 50 & Rs. 250 increment on Domestic & International flight in Economy class. On higher classes- flat 10% Service tax.

6. Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests

7. Fiscal deficit seen at 4.6 percent of GDP in 2011-12; in current year it has come down to 5.1% from previous 5.5%.

8. Disinvestment in 2011-12 seen at 400 billion rupees; Government clear on retaining 51% share in PSEs

9. Constitution Amendment Bill for introduction of GST regime in this session; a laudable move as it is the need of the hour.

10. To create infrastructure debt funds; very clearly expressing Governments keen desire to boost up & develop the Infrastructure sector.

11. Cold Storage chain given Infrastructure status; a very good move as a huge portion of our national produce gets destroyed due to inefficient & inadequate cold storage facilities. A +ive move for Agro-sector.

12. A comprehensive Manufacturing Policy soon; Every country that aims to grow at huge numbers has seen its Manufacturing sector give highest share in GDP which India still lacks; its just 15% of GDP whereas its around 40% in China.

13. NREGA wages to be linked with CPI(Consumer Price Index. i.e. Inflation rates); a very practical move & was expected as we are in a state of Financial Inclusion wherein the Poor too needs resistance base agaisnt high inflation rates.

14. Direct transfer of Cash subsidy for Kerosene, LPG & Fertilizers; the logic of this move lies in the fact that most of the Subsidy given through PDS & other means is being eaten away by the middle entities involved in the transfer process.

15. Infusion of Rs. 30,000 crores in NABARD for boosting financial assistance to country's Agro-sector

16. Comprehensive policy on further developing PPP (public-private-partnership) model

17. Education sector's allocation up by 24%.


These are completely based on my own research of today's Budget. This is a highlight of some of the most important announcements of the Union Budget, knowing these shall help all the readers understand what the Government aims to do & how it shall affect us. Further sectoral analysis & analysis of its effects shall be posted soon. Do express your views by commenting upon these words.