Budget 2012: Govt to table white paper on black money : Pranab Mukerjee No tax till Rs 2L; 20% slab raised to Rs 10L

NEW DELHI: Finance Minister Pranab Mukherjee on Friday announced tax relief for individual tax payers. Presenting Union Budget 2012-13 in Lok Sabha, Mukherjee said income up to Rs 2 Lakh would be tax free; income from Rs 2-5 Lakh to be taxed 10%; from Rs 5-10 lakh to be taxed 20%; and income above Rs 10 Lakh would attract tax of 30%. Mukherjee earlier said India continues to remain among front-runners in economic growth. Mukherjee however said the economic growth is estimated at 6.9 percent during the current fi scal year which was was “disappointing”. “The global crisis has affected us. India’s gross domestic product (GDP) is expected to grow at 6.9 percent in 2011-12, after having grown at 8.4 percent in each of the two preceding years,” the minister said. “But it is also a fact that in any crosscountry comparison, India still remains among the front-runners in economic growth,” he added. The minister stated that the Indian economy was at the cusp of a revival, as agriculture and services have continued to grow at a decent pace. It was industrial performance that was acting as a drag. The Finance Minister also exuded confi dence that headline infl ation would moderate in the next few months and remain stable. Budget Highlights •GDP to grow by 6.9% in 2011-12 •This year’s performance disappointing •India still among front runners in economic growth •Monetary policy was geared towards containing infl ation •Need to improve supply side of economy •Exports grew 23 % •Imports grew 29% •Past year was supposed to be year of recovery •To keep subsidies under 2% of GDP over next 3 years •We were facing several challenges; global situation a dampener •Industry pulled down growth in past two years •Industry now showing signs of recovery •Need to improve supply side of economy •Subsidy for food security law to be fully provided •Some subsidies inevitable •Agriculture to services performed well •Economy now turning around •Manufacturing on cusp of revival •Need to improve microeconomic environment •Expect headline infl ation to moderate in the next few months and remain stable •Agri growth at 2.5% •External trade growth encouraging •India has successfully achieved diversifi cation of import and export market •Diversifi cation has helped overcome global slowdown •Current account defi cit at 3.6% •Fiscal balance has deteriorated due to increase in direct tax seepages and increased subsidy •Expect smaller fi scal defi cit in the coming year •Concept of effective revenue defi cit is being brought in as a fi scal parameter •Crude oil prices to cross USD 115/barrel •Need to take a close look at revenue expenditure, particularly subsidies •Endeavour to restrict subsidy to under 2% of GDP •Recommendation of task force under Nandan Nilekani has been accepted •Direct transfer of fertilizer subsidy to retailer and then on to farmer to be rolled out •Direct transfer of kerosene subsidy pilot project in Alwar, Rajasthan •Direct subsidy transfer to be implemented in at least 50 more districts soon •DTC to be implemented at the earliest •The structure of GST network has been approved by EGoM •Treasury management for CPACs has been enhanced •Rs 30000 cr to be raised via disinvestment •At least 51% stake will remain with the govt •FDI in multi-band retail held in abeyance •GST to be operational by August 2012 •Provision for advance pricing agreement included in DTC bill •Reform in fi nancial sector has been pursued to ensure more market intervention •New scheme - Rajiv Gandhi equity scheme - to be introduced •Simplifying process of IPOs •Mandatory for companies to issue stocks over Rs 10 cr through online system •8 fi nancial amendments bills to be introduced this year •Central Know Your Customer repository would be set up •70,000 habitations have been provided with banking services •Ultra small branches would be set up •Swabhiman campaign to be extended to habitations with population of 1000 people •81 Regional Rural Banks have migrated to core banking •Weak RRBs to be recapitalized for another two years •Viability gap funding under PPP is an important factor •Oil and gas and LNG storage and oil gas pipeline, telecom towers will also be made eligible under viability gap fi nding •The fi rst infra debt fund with a outlay of Rs 8,000 cr has been launched •Tax free infra bonds to be raised to Rs 60,000 cr •Coal India has been advised to sign power purchase agreements with power plants •8,800 km roads to be covered under NHDP •ERCB for capex of toll system and maintenance •ECB for working capital requirement of aviation industry for a period of 1 year with an upper cap of USD 1 bn •Delhi-Mumbai industrial corridor has made progress •USD 4.5 bn has come Japan for DMIC •ECB for low cost housing •New handloom cluster Prakasam and Guntur districts of AP and leather cluster in other in Jharkhand •Power loom mega cluster in Ichalkaranji in Maharashtra •India opportunity venture fund to be launched •1% interested for home costing less than 25 lakhs to continue •RKBY under 300 cr for irrigation program •National food security mission, integrated development of pulses villages •National mission of sustainable irrigation being taken up •National mission on oil seed and oil palms •500 cr for aquaculture •10000 cr to NABARD to refi nance RRBS •Kisan card can be operated from ATMs •Allocation for SC/ST increased to 37113 crore •Food security a legal entitlement •PDS network being created using AADHAR platform •Multispectral programs to address maternal nutrition to be rolled out in select district •Budget OKs overseas borrowing to part-fund power projects’ rupee debts •Budget approves overseas borrowing of upto USD 1 bln for airlines’ working capital needs •Budget OKs overseas borrowing for low-cost housing projects •To increases outlay for agriculture by 18% to RS 202.08 bn •India to be self suffi cient in urea manufacturing in 5 years •Interest subvention on low cost homes extended by a year •Foreign borrow for capex maintain, operate toll roads •Irrigation including damns under viability gap funding FY 13 •Irrigation, fertilizer, terminal market under viability gap funding •To allow Rs 100 bn NHAI tax free bonds FY 13 •To allow Rs 100 bn IRFC tax free bonds in FY 13 •To allow Rs 50 bn HUDCO tax free bonds FY 13 •To allow Rs 50 bn SIDBI tax free bonds FY 13 •To allow Rs 100 bn power sector tax free bonds FY 13 •Inter ministerial panel to monitor allocated coal mines •To OK Rs 50 bn National Housing Bank tax free bonds •ECBs allowed to part fi - nance rupee debt of power projects •Hike in agri credit by Rs 1 tnh To Rs 5.75 tn next FY •Outlay for agriculture up by 18% to Rs 202.08 bn •Mid-Day meal scheme allocated 11937 cr •RG for empowerment of adolescent girls scheme gets 750 cr •Rural drinking water and satiation allocated 14000 cr •PMGSY get 24000 cr •Backward region development fund allocated 12040 cr •Development projects for drought mitigation in Bundelkhand and other select areas 20000 cr •5000 cr for developing warehousing facility •6000 schools to be set up at block levels and developed as model schools •No new case of polio was reported in last one year •New vaccine unit to be set up near Chennai •NRHM enlarged to include iodine defi ciency and vaccination •NRHM allocated 20822 cr •National urban health mission launched •Seven more govt medical colleges to be upgraded •National Rural Livelihood Mission to provide self employment - allocation upped to 3915 cr •Interest subvention of additional 3% on loans upto rs 3 lakhs to women self help groups - effective rate of 4% •Credit guaranty fund for skill development •In the eventuality of the death of the bread earner of a BPL family they will get Rs 10000 cr •Rs 25 cr to institute of rural management in Anand •Rs 100 cr for Kerala agricultural University •Rs 50 cr of Dharwad Agriculture University •Rs 50 cr to Agri universities in Haryana, Odisha •Indira Gandhi pension scheme benefi ciaries to get Rs 300 pm as against current Rs 200 • National population registry project to be completed in the next two years •14 cr AADHAR number generated •AADHAR is ready for payments under MGNERGA, pension scheme •82 double tax avoidance agreements have been fi nalized •17 tax info sharing agreements has been fi nalized •Will table white paper on black money •Dedicated information cells to track black money Five focus areas this year: •Revival of domestic consumption •Achieve condition for revival of high growth •Remove supply bottlenecks •Intervene decisively to address malnutrition •Expedite improvement in delivery systems and address black money