Monday, February 28, 2011

UNION BUDGET 2011-12

The Union Budget 2011-12 aims to sustain economic growth, strengthen infrastructure, moderate the price rise, particularly of agricultural produce and reduce social imbalances through inclusive development. Presenting the budget 2011-12 in the Lok Sabha February 28, the Finance Minister Shri Pranab Mukherjee said that the budget is a transition towards a more transparent and result oriented economic management system in India. He said while developments on India’s external sector have been encouraging, continued high food prices have remained our principal concern. He said that the trend revealed shortcomings in distribution and marketing system. The Finance Minister said that huge differences between wholesale and retail prices are at the expense of remunerative prices for the farmers and competitive prices for consumers.


For sustaining growth tax reform will continue with the Direct Taxes Code (DTC) to be operationalised from April, 2012 while a Constitution Amendment Bill is proposed to be introduced during the current session of Parliament as a step towards roll out of the Goods and Services Tax (GST). He said the introduction of DTC and GST will result in moderation of rates, simplification of laws and better compliance. The Finance Minister re-iterated the Government’s resolve to move towards direct transfer of cash subsidy to people living below poverty line in a phased manner. He said that the Nutrient Based Subsidy (NBS) has improved the availability of fertilizers and the Government is actively considering extension of NBS regime to cover urea.


Finance Minister announced a number of measures to strengthen the agricultural sector particularly in the areas of pulses, vegetables and oil palm . He announced Rs. 300 crore expenditure to promote 60,000 pulses villages in rain fed areas for increasing crop productivity and strengthening market linkages. He also proposed to spend Rs. 300 crore to promote oil palm plantation in 60,000 hectares and Rs. 300 crore for the initiative on vegetable cluster. Rs. 400 crore is proposed to be spent to improve rice based cropping system in the Eastern Region. Capital investment in fertilizer production is proposed to be included as an infrastructure sub-sector since investment in the sector is capital intensive.


The allocation for social sector has been increased by 17% to Rs. 1,60,887 crore which amounts to 36.4% of the total plan allocation. Bharat Nirman, which includes Pradhan Mantri Gram Sadak Yojana (PMGSY), accelerated irrigation benefit programme, Rajiv Gandhi Grameen Vidyutikaran Yojana, Indira Awas Yojana, National Rural Drinking Water Programme and Rural Telephony have together been allocated Rs. 58,000 crore. Remuneration for Anganwadi workers have been increased to Rs. 3000 per month from Rs. 1500 per month while the Anganwadi helpers will get Rs. 1500 per month. This will be effective from 1st April 2011 benefiting about 22 lakh Anganwadi workers and helpers.


The allocation on education has been increased by 24% to Rs. 52,057 crore. Sarva Shiksha Abhiyan gets Rs. 21,000 crore which is 40% higher than the previous year’s allocation of Rs. 15,000 crore. The Finance Minister also proposed to introduce a scholarship scheme for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in classes IX and X. It would benefit about 40 lakh students. Plan allocation for Health has also been increased by 20 per cent to Rs. 26,760 crores. The Rashtriya Swasthaya Bima Yojana will be extended to the unorganized sector workers in hazardous mining and associated industries.


Underlining the need to strengthen Public Sector Banks (PSBs) the Finance Minister proposed to provide Rs. 6000 crore to maintain tier 1 capital to risk weighted asset ratio. He also proposed to infuse Rs. 500 crore into Regional Rural Banks (RRB) . A Women’s Self Help Groups Development Fund with a corpus of Rs. 500 crore is proposed to be created. He also proposed to create a micro finance equity fund of Rs. 100 crore with Small Industrial Development Bank of India (SIDBI) for providing equity to smaller micro finance institutions. Rs. 3000 crore will be provided to NABARD to help handloom weaver cooperative societies to become financially viable.


Interest subvention of 1 per cent on housing loans will now be available for loans upto Rs. 15 lakh where the cost of house does not exceed Rs. 25 lakh. The present limit for the loan amount is Rs. 10 lakh while the cost of the house should not exceed Rs. 20 lakh.


The total plan expenditure has been increased by 18.3 per cent to Rs. 4,41,547 crore and the non-plan expenditure increases by 10.9 per cent to Rs. 8,16,182 crore. The gross tax receipts are estimated to grow by 24.9 per cent to Rs. 9,32,440. Rs. 2,01,733 crore will be transferred to the Sates and UTs as plan and non plan transfers. This also marks a rise of 23 per cent over budget estimates of last year. The fiscal deficit is estimated at Rs. 4,12,817 crore which works out to 4.6 per cent of the GDP.


Turning to the direct taxes, the Finance Minister proposed to increase the exemption limit for general category individual tax payers by Rs. 20,000 to Rs. 1,80,000 per year. This will provide a uniform tax relief of Rs. 2000 to every tax payer of this category. The benefit for senior citizens will now be available at 60 years of age and the exemption limit will go up from Rs. 2,40,000 to Rs. 2,50,000. Those who are 80 years and above have been brought under a new category called very senior citizens and the exemption limit in this category will be Rs. 5 lakhs.


The minimum alternate tax rate has been hiked from 18 per cent to 18.5 per cent of book profits. Developers of Special Economic Zones as well as units operating MAT in SEZs have been brought under MAT. Tax benefit for investment in long term infrastructural bonds will continue for one more year. Income from foreign subsidiaries of Indian Company will now attract a lower tax of 15 per cent tax on dividends.


Turning to indirect tax, the finance Minister said that there are 370 items that enjoy the exemption from Central Excise Duty but are chargeable to VAT. He proposed to withdraw the exemption on 130 of these items. The remaining 240 items would be brought into the tax net when GST is introduced. A nominal 1 per cent central excise duty is being imposed on 130 items. The basic customs duty has been reduced from 30 to 5 per cent on raw silk, from 5 to 2.5 per cent on certain textile intermediates and from 7.5 per cent to 5 per cent on certain inputs for manufacture of technical fibre and yarn. Stainless steel scrap has been fully exempted from customs. Export duty on iron ore has been increased to 20 per cent ad valorem both for lumps and fines. The basic customs duty on pet coke and gypsum has been reduced 2.5 per cent to give relief to cement industry.


On the service tax front a few new services have been brought under tax net. Hotel accommodation in excess of Rs. 1000 per day and service provided by air conditioned restaurants with licence to serve liquor have been brought under the tax net. Service tax on air travel has been raised by Rs. 50 in case of domestic air travel and Rs. 250 on international journey by economy class. Services provided by Life Insurance Company in the area of investment and some more legal services have also been brought under tax net.


Finance Minister said the proposals on direct taxes are estimated to result in a revenue loss of Rs. 11,500 crore while those on the service tax will yield Rs. 4000 crore more. The Finance Minister has kept the disinvestment target at Rs. 40,000 crore for the coming year. He, however, reiterated that the Government is committed to retain at least 51 percent ownership and management control of the CPSUs. He said that as an emerging economy India stands at the threshold at the decade which presents immense possibilities. He said we have the voice on the global stage and we must not let the recent trends and tensions hold us back from converting these possibilities into realities.


Union Budget 2011-12 Highlights:


· Critical institutional reforms set pace for double-digit growth

· Scaled up flow of resources infuses dynamism in rural economy

· GDP estimated to have grown at 8.6% in 2010-11

· Exports grown by 9.6%, imports by 17.6% in April-January 2010-11 over corresponding period last year

· Indian economy expected to grow at 9% in 2011-12.

· Five-fold strategy to deal with black money. Group of Ministers to suggest ways for tackling corruption

· Public Debt Management Agency of India Bill to come up next financial year

· Direct Tax Code (DTC) to be effective from April 01, 2012

· Phased move towards direct transfer cash subsidy to BPL people for better delivery of kerosene, LPG and fertilizer mooted

· Rs.40,000 crore to be raised through disinvestment in 2011-12

· FDI policy to be liberalized further

· SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirement

· FII limit for investment in corporate bonds in infrastructure sector raised

· Additional banking license to private sector players proposed

· Rs.6000 crore to be provided in 2011-12 for maintaining minimum Tier I Capital to Risk Weighted Asset Ratio (CRAR) of 8% in public sector banks

· Rs.500 crore to be provided to regional rural banks to maintain 9% CRAR

· India Microfinance Equity Fund of Rs.100 crore to be created by SIDBI

· Rs. 500 crore Women SHG Development Fund to be created

· Micro Small and Medium Enterprises MSME gets boost as Rs. 5000 crore provided to SIDBI and Rs.3000 crore to NABARD

· Existing housing loan limit enhanced to Rs.25 lakh for dwelling units

· Provision under Rural housing Fund enhanced to Rs.3000 crore

· Allocation under Rashtirya Krishi Vikas yojna (RKVY) increased to Rs.7860 crore

· Allocation of Rs.300 crore to promote 60000 pulses villages in rainfed areas

· Rs. 300 crore vegetable initiative to achieve competitive prices

· Rs.300 crore to promote higher production of nutri-cereals

· Rs.300 crore to promote animal based protein

· Rs.300 crore Accelerated Fodder Development Programme to benefit farmers in 25000 villages

· Credit flow to farmers raised from Rs.3,75,000 crore to Rs.4,75,000 crore

· Rs.10,000 crore for NABARD’s Short Term Rural Credit Fund for 2011-12

· 15 more mega food parks during 2011-12

· National food security bill to be introduced this year

· Capital investment in storage capacity to be eligible for viability gap funding

· 23.3% increase in allocation for infrastructure

· Tax-free bonds of Rs.30,000 crore proposed by government undertakings

· Environmental concerns relating to infrastructure projects to be considered by Group of Ministers

· National Mission for Hybrid and Electric Vehicles to be launched

· 7 Mega clusters for leather products to be set up

· Allocation for social sector increased by 17% amounting to 36.4% of total plan allocation

· Bharat Nirman allocation increased by Rs.10,000 crore

· Rural broadband connectivity to all 2.5 lakh panchayats in three years.

· Bill to amend Indian Stamp Act to introduce. Rs.300 crore scheme for modernization stamp and registration administration

· Significant increase in remuneration of Angawadi workers and helpers

· Allocation for education increased by24%. Rs.21,000 crore allocated for Sarv Shikshya Abhiyan registering an increase of 40%

· 1500 institute of higher learning to be connected by March 2012 with Knowledge Knowledge Network.

· National Innovation Council set up. Additional Rs.500 crore for National Skill Development Fund

· Plan allocation for health stepped up by20%

· Indira Gandhi National Old Age Pension Scheme liberalized further

· Rs.200 crore for Green India Mission

· Rs.200 crore for cleaning of rivers

· Rs.8000 crore provided for development needs of J&K

· 10 lakhs Aadhaar(UID) numbers to be generated everyday from 1st October

· Fiscal deficit kept at 4.6% of GDP for 2011-12

· Income Tax exemption limit for general category in individual tax payers enhanced from Rs.1,60,000 to Rs.1,80,000

· Qualifying age for senior citizens lowered to 60; senior citizen above 80 year to get Rs.5,00,000 IT exemption

· Surcharge on corporate lowered to 5%

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CURRENT AFFAIRS PREPARATION PLAN

“Current Affairs” and “General Knowledge” cover many topics like from economy to sports or education to politics, or even technology to automobiles. In every second some issues are happening around the world in these sectors, and to accumulate the excerpt of some highlighted news, and memorize it is a good plan to prepare current affairs and GK.

Some Important Tips to Follow:

Read Newspapers regularly

We all know that “Old is Gold”, same thing applies here too. We need to make a habit of reading newspapers regularly. I’ll suggest you to read more than one newspaper. It will be better if you read one newspaper of your mother language, and other of English. Some useful newspapers are “The Times of India”, “The Hindu”, “The Telegraph” etc. You need to start this habit at least 6 months before the actual exam that will help you to get access to all the important events of that period of time.

You need to keep an eye on what’s happening around you in your country and world as well. Trust me guys, you will surely find it interesting after several days. We all know that staying updated is always a good idea, as it will stand you apart from the rest.

Read Magazines thoroughly

This is another great option to prepare the subject we are talking about. There are many leading magazines that focus on current affairs and General Knowledge. You need to buy it from your local magazine seller, and start reading it thoroughly. These magazines beautifully categorize the articles with its genres to make it interesting to read on. Some of the useful magazines are Pratiyogita Darpan andManorma.

Try to read some business magazines and sports magazines too along with a general magazine. This will increase your chances of cracking the competitive exams with ease. Some useful business magazines areBusiness Today, Business Line etc.

Follow News Channels

You will need to follow news channels at least once a day. Now most of the leading news channels are active for 24*7. You need to pick up a suitable time for yourself to watch any favorite news channel of yours. You can watch ABP News, NDTV, Times Now, ET Now, Zee News etc. Try to go through all the breaking and highlighted news, and make it a habit.

I know that watching news channels for long will bore you, so I’ll suggest you to allocate only 30 minutes for it in a whole day. All the leading ones shows the glimpses of all important events of the day quite frequently, so 30 minutes will be enough for you to boost up your current affairs and GK knowledge.

Maintain a Diary

My teacher used to tell me that whenever you learn something try to write it down in your diary, as it will help you to memorize it in a better manner. He is so right, as this method helped me a lot to score good marks in every exam that I appeared for. As I already mentioned before that a lot of events are occurring in the country and around the world, so it is easily understandable that it is not easy to remember everything. It’s always a superb idea to maintain a diary of current events.

You need to update this diary on a daily basis with all the events that you consider as important ones. This diary will become quite useful for the revision part, as it will provide you information about all the important events at a place. You should keep revising the diary frequently, as it will help you to memorize important names, dates, awards etc.

Channelize your Preparation Accordingly

All the competitive exams are not same, as all of them have different pattern, even when it comes to the same topic as ‘Current Affairs’ or ‘GK’. For example for civil services exam, you need to give importance on events of National value. On the other scenario, in matter of bank job exam, the focus should be on the news on banking sectors, and economic and business news.

Thus I’ll suggest you to prepare as per the exams you are appearing for, as channelizing your preparation according to the pattern of the exam will accelerate your chance of getting selected.

Use Internet Resources

Google, YouTube and Wikipedia are my favorite teachers’; one of my friends told me this once. This is quite true indeed, so you should use all the available online resources to study current affairs and GK for exams. For example this blog is all about “Current Affairs”, so you can check this blog regularly by subscribing to us (check the sidebar for subscription options). You can actively take part some forums that are focusing on current events. The good part is you can follow the websites of all leadingnewspapers online if you don’t have enough time to read newspapers.

Use Social Networking Sites for Good

Believe me or not you can surely use social networking sites to your benefits. Especially to prepare current affairs and General knowledge Facebook, Twitter, LinkedIn and StumbleUpon may help you a lot. You can join some Facebook pages, or follow some twitter accounts that are related to current affairs. You can join our Facebook Page too for this matter, or connect with me at LinkedIn or circle me in Google Plus for all the information on recent happenings to boost up your General Knowledgeability.

Give Priority to your Strength

We usually find difficulties when we try to learn everything at once. In that process basically we study a lot, but remember a little. We need to first select our strength areas for our preparation. Try to givepriority to your strength areas. It may be Sports, economy, Government Affairs or technology. Suppose you are applying for Bank exams, then you should prepare industry related news. Along with that you may pick any 2-3 areas of your strength like sports or technology. You need to prepare these sections to the utmost level. I can assure you that these strategies will help you to score much better in Current Affairs section.

Participate in Online Quizzes

You should participate in some free quizzes that are available online to evaluate yourself. For this matter you can easily access our “Quiz Section”. This will give you proper idea whether you are ready for the big exam day or not. As an added factor it will also provide you confidence i.e. very much essential. You can download Monthly-wise current affairs questions from Here.