In a double whammy to the services sector Pranab has increased the service tax from 10 per cent to 12 per cent and has widened the service tax net to include most sectors . All services excepting those in the negative list will be taxed. Negative list to include pre-school and high school education, entertainment services. This increase in service tax will result in Rs 18,660 cr of additional revenues.
Excise Duty on large cars have been increased from 22 per cent to 24 per cent
Full exemption on custom duty on coal has been proposed
INCOME TAX EXEMPTION HIKED!
Pranab increases tax exemption limit to Rs 2,00,000 from 1,80,000. Senior citizens will have to pay no advance tax while there wil be no change in tax rates for corporates
Upto 2,00,00 – Nil
2,00,000 – 5,00,00 – 10%
5,00,00 – 10,00,00 – 20%
Above 10,00,00 – 30%
“Life of the Finance Minister is not easy. I must be cruel to be kind” Pranab quips
Tax on stock trading has been reduced.The cut in STT the stock exchange toll fee for buying and selling share is cut by 20 percent. Just crumbs for traders
Fiscal deficit for FY12 stand at 5.9%.
NEW SAVINGS SCHEME FOR TAX BENEFIT!
The finance minister said that a new equity-linked savings scheme, named after former prime minister Rajiv Gandhi, will offer income tax deduction of up to 50 per cent for those who invest Rs 50,000 in the stock market. However, only those whose annual income is less than Rs 10 lakh will be eligible for the tax deduction.
In a bid to increase India’s literacy rate the FM proposes to set up 6,000 schools in 12th Five-Year Plan. Rs 25,555 cr will be allotted for Right to Education in FY13. The FM also cuts interest rates on loans to women self help groupsThe government is considering issuing Resident i cards to all individuals above the age of 18 years to help in e governance procedure. Allocation toward UID will be at Rs 14,232 crore in FY13.
The plan outlay for agriculture has been raised by 18% to Rs 20,208 crore in FY13. Irrigation and dams will be eligible for special funding, says the Finance Minister
The bank index extended gains to more than 2 percent after Pranab Mukherjee said the government will provide nearly Rs 160 billion capital infusion in state-run banks in fiscal year 2013 that starts in April.
The FM proposes Rs 12,040cr for backward area projects and Rs 14,000cr for rural drinking water and sanitation in FY13.
Retail stocks rise as the finance minister commits to multi-brand FDI in his budget speech. Shopper’s Stop up 3.3%, Pantaloon up 1.5%, Trent rises 1.8%.
Market now slipping off day’s highs as no major announcement on subsidy cuts
FM promises tax incentive for new investors. A good move, considering that the share of household savings invested into the stock markets has declined. However, it remains to be seen if this works for the markets. Markets seem to be happy: The Sensex is at 17,796.19 points, up +120.34 (0.68%), while the NSE Nifty is at 5,423.10 points, up +42.60 (0.79%).
The finance minister said that the move to allow foreign airlines to participate direct or indirectly in India being considered actively. The plan to allow foreign airlines to invest up to 49% in domestic airlines is being considered actively too. External commercial borrowings to the extent of $1 billion to be allowed for aviation sector for next year. Aviation sector stocks however remain limp, showing hardly any movement.
Micro-finance Institution Regulation Bill, National Housing Bank Regulation Bill, Bank Regulation Bill and Public Debt Management Bill likely to be passed this session. The finance minister also proposes to recapitalise banks — rural, urban and argiculture-related banks — to the extent of Rs 15,000 crores.
11:35 pm: Sensex at 17858, up 182 points,
Good news for investors: Changes in IPO norms will also be introduced which will increase participation in small towns
The finance minister seeks to bring down subsidies to a level of 1.7% of the GDP over the next three years. He also plans to roll out a computerised scheme for transfer of fertilizer subsidy.
The finance minister assured the Lok Sabha that he plans to implement the Direct Taxes Code “at the earliest”. Speaking about the Goods and Services Tax, he said that GST would be operational by August 2012.
The Finance Minister has allotted Rs 15,888 cr for capitalisation of PSUs.
Pranab announces sops for new retail investors under the Rajiv Gandhi Equity Scheme. The Rajiv Gandhi Equity Scheme that is to be introduced will have lock-in period of 3 years – details of which the FM says would be announced in due course.
An Income Tax deduction of 50 per cent on investments of up to Rs 50,000 in savings scheme named after Rajiv Gandhi has been proposed. Efforts are being made to arrive at broadbased consensus with state governments on allowing FDI in multi-brand retail up to 51 per cent, says FM.
The finance minister seems to have begun on a note that might get the hopes of the industry up a bit. He spoke about reforms, driving up growth, fighting corruption and the menace of black money. He also mentions the need to follow a roadmap that would help the nation arrive at the various checkpoints on time and in a planned manner.So will be bite the bullet and push through the reforms? Let’s listen further…
The FY13 divestment target is pegged at a whooping Rs 30,000 crore, Pranab proposes. The government’s stake in PSUs where sell-off is decided would not be less than 51%.
Rate hikes hit growth
The Reserve Bank’s hawkish stance has hit India’s consumption and growth. The Finance Minister, however, promises lower inflation number and expects to narrow the fiscal deficit gap. The economy has been steadily turning around and manufacturing appears to be on revival, he adds.
India stands tall amidst crisis
Performance this year was disappointing but as compared to peers India was better. Middle East crisis, debt worries in EU have intensified.
The FM says he will focus on five broad issues:
1. Focus on domestic investments and driving up growth
2. Stress on rapid revival in private sector investment.
3. Emphasis on removing supply die bottlenecks in sectors like agriculture, energy, etc.
4. Make timely intervention to address the scrourge of malnutrition in certain disctricts of the country.
5. Expedite coordinated efforts to improve governance, transperancy and address the problem of black money.
At 1110 hrs, the Sensex is up 82 points at 17,758.28, a gain of 0.47%. The NSE Nifty is up 31 points at 5,401.55, a gain of 0.39%. The market is keeping its fingers crossed.
“We have to improve the supply side management of the economy. Mere words are not enough and we need to take some action,” says Pranab
Pranab Mukherjee has started presenting the his seventh budget amid a lot of din in Parliament.
This year has been one a year of recovery interupted, Pranab says. Despite global recession, Indian economy has been growing at an impressive pace, says the finance minister. However he agrees that the global economic crisis has affected India.
Finance Minister Pranab Mukherjee has already arrived in Parliament and is ready to present his Budget. Of course, he stopped over at the Rashtrapati Bhavan to meet President Pratibha Patil
Meanwhile, the stock market is waiting with bated breath for the FM’s budget proposals. The Sensex at 10.48 am is at 17,745.59 points, up +69.74 (0.39%), while the NSE Nifty is at 5,409.10 points, up +28.60 (0.53%). So what can the FM do? Will he give a push to the reforms process? Or will he make this one a populist budget given the trouble that the UPA-2 finds itself in today?
TAX RATES TO GO UP?
News reports suggest that the finance minister could increase the income tax exemptions available to the common man, but others speculate that the tax rates could even be hiked.
For those of you who are wondering what this Budget is all about and how it’s important to you. Click here
Even as the General Budget is to be presented in just a couple of minutes, the drama over the Railway Budget continues. Also, the DMK MPs too are absent and are not attending Parliament. Apparently, they are readying for the by-polls.
The Budget will be presented against a backdrop of slowing economic growth and a soaring fiscal deficit. GDP growth for fiscal year 2011-12 is expected to be at a mere 6.8 per cent, the lowest in three years.
Where is India’s economy headed?
NDTV’s Dr. Prannoy Roy discusses the direction the country is taking with the economy, what expectations are riding on the budget, and if its scope is limited and if there is more in the economy that we should be focusing on.
Pranab has a tough task on hand trying to balance the wants of the aam admi, please India Inc and show that he’s being pro growth
Expectations from this Budget run high. Salaried employees may have reasons aplenty to cheer this budget as the Finance Minister is expected not only to raise the income tax exemption limit to Rs 3,00,000 but also increase the rebate amount under Section 80CCF to Rs 50,000 from Rs 20,000.