- India’s GDP growth in 2012-13 expected to be 7.6 per cent +/- 0.25 per cent
- GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years
- Current account deficit at 3.6 per cent of GDP for 2011-12 and reduced net capital inflow in the 2nd and 3rd quarters put pressure on exchange rate
- Growth moderated and fiscal balance deteriorated due to tight monetary policy and expanded outlays.
- Deterioration in fiscal balance in 2011-12 due to slippages in direct tax revenue and increased subsidies
- Endeavour to keep central subsidies under 2 per cent of GDP in 2012-13. Over next 3 year, to be further brought down to 1.75 per cent of GDP
- Twelfth Five Year Plan to be launched with the aim of “faster, sustainable and more inclusive growth”. Five objectives identified to be addressed effectively in ensuing fiscal year.
- DTC Bill to be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee
- Drafting of model legislation for the Centre and State GST in concert with States is under progress & GST network to be set up as a National Information Utility and to become operational by August 2012
- For 2012-13, Rs. 30,000 crore to be raised through disinvestment. At least 51 per cent ownership and management control to remain with Government
- Foreign Direct Investment- Efforts to arrive at a broad based consensus in consultation with the State Governments in respect of decision to allow FDI in multi-brand retail upto 51 per cent.
- External Commercial Borrowings (ECB) to be allowed to part finance Rupee debt of existing power projects
- Proposal to allow foreign airlines to participate upto 49 per cent in the equity of an air transport undertaking under active consideration of the government
- ECB to be permitted for working capital requirement of airline industry for a period of one year, subject to a total ceiling of US $ 1 billion
- Tax free bonds of Rs. 60,000 crore to be allowed for financing infrastructure projects in 2012-13
- National Manufacturing Policy announced with the objective of raising, within a decade, the share of manufacturing in GDP to 25 per cent and creating of 10 crore jobs
- Various proposals to address the shortage of housing for low income groups in major cities and towns including allowing ECB for low cost housing projects and setting up of a credit guarantee trust fund etc
- Government has announced a financial package of Rs.3,884 crore for waiver of loans of handloom weavers and their cooperative societies
- Rs.5,000 crore India Opportunities Venture Fund to be set up with SIDBI
- Target for agricultural credit raised by Rs.1,00,000 crore to Rs.5,75,000 crore in 2012-13
- Enrolment of 20 crore persons completed under UID mission. Adequate funds to be allocated to complete enrolment of another 40 crore persons
- Proposal to lay a White Paper on Black Money in current session of Parliament
- Gross Tax Receipts estimated at Rs.10,77,612 crore
- Net Tax to Centre estimated at Rs.7,71,071 crore
- Non-tax Revenue Receipts estimated at Rs.1,64,614 crore.
- Non-debt Capital Receipts estimated at Rs.41,650 crore
- Total expenditure for 2012-13 budgeted at Rs.14,90,925 crore.
- Plan expenditure for 2012-13 at Rs.5,21,025 crore is 18 per cent higher than Budeget Estimates of 2011-12.
- 99 per cent of the total plan outlay met in the Eleventh Plan.
- Non-plan expenditure estimated at Rs.9,69,900 crore.
- Rs.3,65,216 crore estimated to be transferred to States including direct transfers to States and district level implementing agencies.
- Entire amount of subsidy is given in cash and not as bonds in lieu of subsidies.
- Fiscal deficit at 5.9 per cent of GDP in RE 2011-12.
- Fiscal deficit at 5.1 per cent of GDP in BE 2012-13.
- Net market borrowing required to finance the deficit to be Rs.4.79 lakh crore in 2012-13.
- Central Government debt at 45.5 per cent of GDP in 2012-13 as compared to Thirteenth Finance Commission target of 50.5 per cent.
- Effective Revenue Deficit to be 1.8 per cent of GDP in 2012-13.
- Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs.1,80,000 to Rs.2,00,000 giving tax relief of Rs.2,000.
- Upper limit of 20 per cent tax slab proposed to be raised from Rs.8 lakh to Rs.10 lakh.
- Proposal to allow individual tax payers, a deduction of upto Rs.10,000 for interest from savings bank accounts.
- Proposal to allow deduction of upto Rs.5,000 for preventive health check up.
- Senior citizens not having income from business proposed to be exempted from payment of advance tax.
- To provide low cost funds to stressed infrastructure sectors, rate of withholding tax on interest payment on ECBs proposed to be reduced from 20 per cent to 5 per cent for 3 years for certain sectors.
- Restriction on Venture Capital Funds to invest only in 9 specified sectors proposed to be removed.
- Proposal to continue to allow repatriation of dividends from foreign subsidiaries of Indian companies at a lower tax rate of 15 per cent upto 31.3.2013.
- Investment link deduction of capital expenditure for certain businesses proposed to be provided at the enhanced rate of 150 per cent.
- New sectors to be added for the purposes of investment linked deduction.
- Proposal to extend weighted deduction of 200 per cent for R&D expenditure in an inhouse facility for a further period of 5 years beyond March 31, 2012.
- Proposal to provide weighted deduction of 150 per cent on expenditure incurred for agri-extension services.
- Proposal to extend the sunset date for setting up power sector undertakings by one year for claiming 100 per cent deduction of profits for 10 years.
- Turnover limit for compulsory tax audit of account and presumptive taxation of SMEs to be raised from Rs. 60 lakhs to Rs. 1 crore.
- Exemption from Capital Gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant and machinery.
- Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50 per cent to new retail investors, who invest upto Rs.50,000 directly in equities and whose annual income is below Rs. 10 lakh to be introduced.
- Proposal to provide weighted deduction at 150 per cent of expenditure incurred on skill development in manufacturing sector.
- Reduction in securities transaction tax by 20 per cent on cash delivery transactions.
- Proposal to extend the levy of Alternate Minimum Tax to all persons, other than companies, claiming profit linked deductions.
- Proposal to introduce General Anti Avoidance Rule to counter aggressive tax avoidance scheme.
- Measures proposed to deter the generation and use of unaccounted money.
- A net revenue loss of Rs.4,500 crore estimated as a result of Direct Tax proposals
- All services barring 17 negative list services, now under Service Tax net Increase in Service Tax rate from 10% to 12%
- Exemption from service tax is proposed for some sectors.
- Service tax law to be shorter by nearly 40 per cent.
- New scheme announced for simplification of refunds.
- Rules pertaining to point of taxation are being rationalised.
- Number of alignment made to harmonise Central Excise and Service Tax. A common simplified registration form and a common return comprising of one page are steps in this direction.
- Revision Application Authority and Settlement Commission being introduced in Service Tax for dispute resolution.
- Utilization of input tax credit permitted in number of services to reduce cascading of taxes
- Place of Supply Rules for determining the location of service to be put in public domain for stakeholders’ comments.
- Study team to examine the possibility of common tax code for Central Excise and Service Tax.
- Proposals from service tax expected to yield additional revenue of Rs.18,660 crore.
[ii] Other Indirect Taxes
- Standard rate of excise duty to be raised from 10 per cent to 12 per cent, merit rate from 5 per cent to 6 per cent and the lower merit rate from 1 per cent to 2 per cent with few exemptions.
- Excise duty on large cars also proposed to be enhanced.
- Proposal to increase basic customs duty on imports of gold and other precious metals
- No change proposed in the peak rate of customs duty of 10 per cent on nonagricultural goods.
- To stimulate investment relief proposals for specific sectors - especially those under stress.
- Proposals to increase excise duty on ‘demerit’ goods such as certain cigarettes, hand-rolled bidis, pan masala, gutkha, chewing tobacco, unmanufactured tobacco and zarda scented tobacco.
- Levy of excise duty of 1 per cent on branded precious metal jewellery to be extended to include unbranded jewellery. Operations simplified and measures taken to minimise impact on small artisans and goldsmiths.
- Branded Silver jewellery exempted from excise duty.
- Duty-free allowances increased for eligible passengers and for children of upto10 years.
- Proposals relating to Customs and Central excise to result in net revenue gain of Rs.27,280 crore.
- Indirect taxes estimated to result in net revenue gain of Rs.45,940 crore.
