Budget 2011: Tax relief for individuals, inflation 'a concern'
Sunday February 27, 2011 11:41 pm PST
Mukherjee however exuded confidence that the RBI's monetary policy would lead to moderation in inflation in the coming months. Mukherjee also put emphasis on increasing agricultural productivity to curb food inflation.
The Finance Minister did not disappoint individual tax payers either and raised the threshold income tax limit to Rs. 1.8 lakh from the present Rs. 1.6 lakh. This now becomes uniform for both men and women.
He brought down the eligibility age for senior citizen's tax exemption to 60 years from 65. Mukherjee also announced that exemption for senior citizens would be Rs. 2.5 lakh from the present Rs. 2.4 lakh.
He also announced a special category of tax-paying senior citizens. Those 80 or above would get an exemption of Rs. 5 lakh, he said.
Mukherjee also said last year had been a remarkable fiscal year and that the Indian economy was expected to grow steadily at 9 per cent.
Mukherjee said: "I see Budget 2011-12 as a transition towards more transparent and a result-oriented economic management."
Highlights of the Budget 2011/12
Sunday February 27, 2011 11:26 pm PST
NEW DELHI (Reuters) - Finance Minister Pranab Mukherjee on Monday presented to parliament India's federal budget for the coming financial year beginning in April.
Following are the highlights of the budget:
GROWTH, INFLATION EXPECTATIONS
* Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent
* Inflation seen lower in the financial year 2011-12
SPENDING
* Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent
REVENUE
* Gross tax receipts seen at 9.32 trillion rupees in 2011-12
* Non-tax revenue seen at 1.25 trillion rupees in 2011-12
DISINVESTMENT
* Disinvestment in 2011-12 seen at 400 billion rupees
POLICY REFORMS
* To create infrastructure debt funds
* To boost infrastructure development with tax-free bonds of 300 billion rupees
* Food security bill to be introduced this year
* To permit Securities and Exchange Board of India (SEBI) registered mutual funds to access subscriptions from foreign investments
* Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion
* Public debt bill to be introduced in parliament soon
SECTOR SPENDING
* To allocate more than 1.64 trillion rupees to defence sector in 2011-12
* Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12
* To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12
* To allocate 520.5 billion rupees for the education sector
* To raise health sector allocation to 267.6 billion rupees
AGRICULTURE
* Removal of supply bottlenecks in the food sector will be in focus in 2011-12
* To raise target of credit flow to agriculture sector to 4.75 trillion rupees
* Gives 3 percent interest subsidy to farmers in 2011-12
* Cold storage chains to be given infrastructure status
* Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner
* To provide 3 billion rupees for 60,000 hectares under palm oil plantation
* Actively considering new fertiliser policy for urea
FINANCE MINISTER ON THE STATE OF THE ECONOMY
* "Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future."
* Food inflation remains a concern
* Current account deficit situation poses some concern
* Must ensure that private investment is sustained
* "The economy has shown remarkable resilience."
FINANCE MINISTER ON GOVERNANCE
* "Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability ... such an impression is misplaced."
* Corruption is a problem, must fight it collectively
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