UNION BUDGET 2012 HIGHLIGHTS:Defence Budget hikes to Rs 1, 93,007 crore A welcome step.

But will they try to spend this money on modernization and welfare of armed forces? Or its just another Commission and scams money? Defence Budget hiked by more than 17% Welcome decision... Friday, March 16, 2012: Indian finance minister Pranab Mukherjee has finished his budget speech and it has both good and bad news for the consumers. Bad news first. If you were planning to buy a new air conditioner or a refrigerator for your household, this budget has managed to upset your mood. The ACs and refrigerators will cost more in the upcoming financial year 2012-2013. The good news is that you can buy an LCD or an LED at a cheaper price. The prices of LCDs and LEDs will cost less in the next fiscal. Also, for the consumer electronics industry Mukherjee has announced that the goods and services tax (GST) will be operational from August 2012, much in line with what the industry was expecting from this budget. Offering some respite to the common man, Finance Minister Pranab Mukherjee today proposed that the personal income tax exemption limit will be raised to Rs 200,000 (Rs 2 lakh) from the existing Rs 180,000. For annual income up to Rs 2 lakh: No tax For annual income from Rs 2 lakh to Rs 5 lakh: Tax at 10% For annual income from Rs 5 lakh to Rs 10 lakh: Tax at 20% For annual income above Rs 10 lakh: 30% The finance minister also said that interest earned up to Rs 10,000 per year would be tax free too. No advance tax for senior citizens.

Health insurance deduction up to Rs 5000 for preventive health checkup. FY13 market borrowing at Rs 4.79 lakh crore. Service tax net widened; to include most sectors. Negative list to include pre-school and high school education, entertainment services. Sale of residential property exempted from capital gains if invested in equity or equipment of an SME. All services to be taxed except those in negative list. There has been no change in corporate tax. Pop the SUV dream as they now be more expensive. The excise duty on large cars has been increased to 27% from 22% earlier. Service tax has been increased from 10% to 12% making your weekend brunch dearer The service tax net has been widened making most leisure activities expensive Long cigarettes will cost more with an increase in excise duty on cigarettes Basic customs on gold has almost doubled. Is the yellow metal still a good investment? Platinum's got costlier too Refrigerator will now get costlier due to higher customs duty Get ready for a HOT summer. The hike in customs duty will hit airconditioners too.

Gold prices may have gone up due to taxes but silver prices will get cheaper Customs duty on LCD and LED have reduced making television sets cheaper Duty on bicycles and bicycles parts have been reduced making them cheaper Bollywood exempted from service tax. HIV, Cancer drugs to be cheaper. The FM has said that multi-brand retail will be supported so we can expect more number of Malls and Super Malls in the country.

The Ministry of Minority Affairs gets Rs. 385 Crore More as Central Plan Outlay in The Union Budget 2012-13 Major increase in Provisions for Scholarship Schemes Many New Schemes Provided for in the Budget Over Rs. 4 Crore Provision for Free Cycles for Girl Students of Class IX
The Ministry of Minority Affairs has got an outlay of Rs. 3,135 crore as Central Plan Outlay in the Union General Budget 2012-13 announced here today. This is an increase of Rs. 385 crore over the Revised Budget Estimates for the current FY 2011-12 (which stands at Rs. 2,750 crore). The Budget 2012-13 increases significantly the outlay for scholarship schemes being implemented by the Ministry for the students belonging to the Minorities: i. ii. Provision for Pre-Matric Scholarship has been increased from Rs. 540 crore to Rs. 810 crore; Post-Matric Scholarship gets Rs. 450 crore up from Rs. 405 crore;

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iv.

Merit-cum-means Scholarship scheme gets Rs. 198 crore - as against Rs. 126 crore in the Revised Budget Estimates for the current FY 201112. Provision for Maulana Azad National Fellowship for Minority students has been enhanced from Rs. 47 crore to Rs. 63 crore.

The Union General Budget 2012-13 also provides Rs. 4.50 crore for a new scheme to provide free cycles to girl students of class IX with the objective of retention of minority girl students from class IX onwards. Another new scheme: Skill Development Initiatives has been provided Rs. 18 crore in the Budget to allow urban and rural livelihoods to improve for inclusive growth by providing skill to the Minority communities who do not posses any, to allow them to gain employment. Rs. 45 crore each have been provided for i) Scheme for promotion of education in 100 Minority Concentration towns/cities; and ii) Village Development Programme for 1,000 villages not covered under Minority Concentration Blocks/ Minority Concentration Districts. The Ministry of Minority Affairs also gets Rs. 19.70 crore as Non-Plan provision so that the total finances available with the Ministry for the FY 2012-13 is Rs. 3,154.70 crore.

Union Budget 2012-13 Pranab ends his speech with a warning: "India stands on the brink of a recession" Long cigarettes will now cost more; Pranab announces an increase in excise duty on cigarettes. Sensex begins to tank with increase in service taxes and excise duties Duty on bicycle and bicycle parts has been reduced, duty on energy savings lamps have also been eased.

At 1230 hrs, the 30-share BSE Sensex is up 53 points at 17,729.09, a gain of 0.30%. The NSE Nifty is up 20 points at 5,400.25, a gain of 0.37%. Indirect Taxes 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 27 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 will be no change in tax rates for corporates Upto 2,00,000 - Nil 2,00,000 - 5,00,000 - 10% 5,00,000 - 10,00,00 - 20% Above 10,00,000 - 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 groups the 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. AGRICULTURE 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 multibrand 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%). AVIATION SOPS 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 recapitalize banks -- rural, urban and agriculturerelated 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 computerized 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 capitalization of PSUs. RETAIL SOPS 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... Disinvestment The FY13 divestment target is pegged at a whooping Rs 30,000 crore, Pranab proposes. The government's stake in PSUs where selloff 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 districts of the country.

5. Expedite coordinated efforts to improve governance, transparency 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 his seventh budget amid a lot of din in Parliament. This year has been one a year of recovery interrupted, 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 FMs 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. 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. Pranab has a tough task on hand trying to balance the wants of the aam admi, please India Inc and show that hes 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.