Union Budget 2011: Pranab reins in the masses?

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Pranab Mukherjee
New Delhi, Feb 28: Pranab Mukherjee, Finance Minister succeeded in presenting a populist budget with major focus on the worrying food inflation levels with major reforms aimed at that direction. Corporate India showed a thumbs up on the budget proposals, calling it a reformist budget rather than a populist budget. 

The tax exemption limit alteration bought some cheer to the salaried class. The agriculture sector also had some much needed cash-infusion. There was also reason for cheer for the senior citizens as a new tax slab for those above 80 was created. But urban hippies ,will have to dole out more for branded attire and jewellery.

The introduction of the Food Bill was a positive step that would ensure grains to the millions of poor in the country.

Overall, the budget was inclusive of the needs of the wide range of population divided in class and category. But a lot needs to be done before the proposals are implemented and the thoughts put into action.

- New tax category for those 80 yrs and above, tax limit is Rs 5 lakh
- Standard rate of excise duty to be maintained at 10 %
- Extension of investment on long-term infrastructure bonds by one more year.
- Service tax unchanged at 10 per cent
- Mandatory imposing of 10 % levy on branded garments
- Direct tax sops to result in Rs 11,500 cr net revenue loss
- Export duty at 20% for iron ore

Budget Presentation concludes.

- New series of coins with new rupee symbol to be introduced
- Exemption limit raised from Rs1.6 lakh to Rs 1.8 lakh for general tax payers
- Fiscal deficit down form 5.5% to 5.1% . Projected deficit for FY 12 at 4.6%
- The Net tax to Centre will be Rs 6,64,457 crore. Non-tax receipts pegged at Rs 1,25,435 crore
- Budget estimates for 2011-12 projects Rs 9,32,440 crore, a hike of 24 %

- Budget allocation for defence sector at more than 1.64 trillion rupees
- Rs 5,000 crore to be provided to National Skill Development Council
- A grant of Rs 10-crore for Delhi School of Economics; Rs 200 cr for Maulana Azad Education Foundation; Rs 200 cr as one-time grant to IIT-KGP. Plans to allocatte Rs 58,000 crore to various Bharat Nirman projects

- Rs 1000 crore to build judicial infrastructure so as to speed up justice-delivery system in country
- Funds of Rs 25 crore and Rs 30 crore allotted for naxal affected areas
- Rs 8000 cr assigned for J&K for development projects
- Award instituted for promoting international brotherhood in the name of Rabindranath Tagore with cash prize of Rs 1 crore
- Budget allocation of Rs 150 cr for projects for Jammu identified by the taskforce
- Proposal to infuse Rs 300 crore to modernise stamp and registration in states

- Massive plan for food storage, plans to underway to create 150lac metric tons food storage capacity
- Credit limit for the agricultural sector raised to Rs 4,75,000 crore
- 50 mega food parks proposed

- BPL pension age bar reduced from 65 years to 60 years
- A pension of Rs 500 to be given to those above 80 years as against Rs 200 earlier
- Massive boost for Ladakh, Rs 100 crore allotted for its development
- Disabled defence personnel to be given Rs 9 lakh ex gratia payment

- Food security bill to be introduced this year
- Huge educational sops for WB and Kerala, Rs 50 crore granted to Aligarh Muslim University centres in Murshidabad in West Bengal and Malappuram in Kerala
- Rural broadband connectivity to be provided in 3 years, allocation to be made under Rashtriya Krishi Yojana
- Comprehensive national policy to control the trafficking of narcotic drugs

- Rs 21,000 cr for Shiksha Abhiyan
- Good news for anganwadi workers, remuneration raised from Rs 1500 to Rs 3,000 per month. Helpers also benefit, to get Rs 1,500 from Rs 750
- Education sector gets a boost with Rs 52,057cr allotted that will see an increase of 24%
- Rs 10,000 crore allotted to the cause of rural telephony

- Rs 2.14 cr to be allocated towards infra development
- PPP endeavour's to be further developed
- Rs 300 cr to be allotted for fodder development
- Rs 300cr provided to promote the production of seasonal crops bajra, jowar, ragi
- Rs 300 cr to be allocated for palm oil production

- 3 % interest subsidy to farmers in 2011-12
- A strengthening of the NABARD capital base to Rs 10,000 cr to be provided as short term credit fund
- Not ignoring the weaker sections of society, mortgage risk guarantee fund created
- Keeping up with the global concerns, agriculture growth considered key to development. The FM also agrees that Green Revolution is waiting to happen in the eastern region

- Good news for those availing home loans, 1% interest subvention on loans upto 15 lakh
- Proposal to create a womens self help group with a corpus of Rs 500cr
- PSU banks boost with capital infusion of Rs 6000cr in 2011-12
- Tax free bonds to boost infra development to the tune of Rs 300 billion

- On the topic of disinvestment, Public Sector Undertakings index extends rise to 3 %
- NRIs will now be allowed to invest in mutual funds
- Portfolio investment to be permitted in SEBI registered mutual funds from foreign subscriptions
- FII limit in corporate infra bonds to be raised by USD 20bn

- FM proposes to raise Rs 40,000cr via disinvestment
- Keeping in mind the large-scale diversion of kerosene, LPG and fertilisers, the budget plans a move towards direct cash transfer of cash subsidy towards the same from Mar 2012.
- The govt will move to direct transfer of fertiliser subsidy to companies.

- The FM suggests that the Direct Tax Code Bill likely to be passed by next financial year after receipt of Standing Committee report.
- Moderate Inflation expected in coming months.
- Exports have grown by 29.4%, while imports by 17.6%
- Projects account deficit and average inflation to be less than current year.
- Overall economic growth expected at 8.6 %, agriculture growth at 5.4 %, industry at 8.1 % and services at 9.3 %

Pranab seeks divine intervention to the ills in the Indian economy. Seeks Goddess Laxmi's blessings for nation's prosperity and Lord Indra's blessings for a bountiful monsoon. Talking on corruption, he said it has to be fought collectively. He also added that ecological concerns need to be in line with development.

The Minister added that the budget is a transition towards transparent economy. He expressed optimism and said that the fiscal consolidation has been impressive and macro economic environment will need to be more stable. He also expressed concern over rising food inflation levels.

Finance Minister comments that they could have done better and development needs to be more inclusive. He also added that lots needs to be done in rural India.

Pranab Mukherjee has started his budget speech in Parliament.

Finance Minister Pranab Mukherjee will present India's Union Budget in Parliament today. The nation is facing huge economic upheavals and a dramatic rise in inflation levels that is a cause of major worry.

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