Understanding “ Budget 2011-12”
– By Prof. Simply Simple
TM
The main impetus of the budget is to improve the growth rate and get it to
9 percent in the near term and to a double digit rate in the medium to longer term. The other two areas of focus are infrastructure development especially in rural India and improving governance
Any budget expresses two key things. 1. Source of Expenditure
2. Source of Income
Let’s first see the key sources of expenditure in Budget 2011-12
Key points of the budget:
The government is very keen on ensuring that inflation is controlled and food security is ensured for all citizens.
Food items: Since inefficient distribution has been found to be the culprit for the sky rocketing of food prices, the finance minister has proposed to focus on reducing production and distributions bottlenecks. Food, vegetables, meat etc will show an easing of prices in the medium term future.
Agriculture: Higher allotment under Rashtriya
Krishi Vikas Yojana of Rs 7860 Crores could see more support for the agriculture sector. Special focus on Vegetables in the form of Rs 300 crore for Vegetable initiative. Agriculture credit too raised to Rs 475, 000/- crores. Happier farmers could mean lower prices for the common man.
Focus on Cold Chains and Storage could also lead to efficiency and in return reduction in prices and better quality vegetables reaching our kitchens. Education: The finance minister has made provisions for a higher allotment of funds by hiking the budgetary allocation for the
Education sector by 24% as compared to last year
Infrastructure is King: Rs 214000 crores has been allotted for infrastructure for 2011-12. An increase of over 23% over the last year. We can see better highways and transport systems in the near
Housing Loan: Loan limit has been enhanced to
Rs 25 Lakh for housing under priority sector lending. Interest subsidy (subvention) of 1% on housing loan has been liberalized. People in the lower financial spectrum to get benefit from
Mortgage Risk Guarantee Fund.
Direct transfer of cash subsidy to be given to people below the poverty line so that delivery of
Kerosene, LPG and fertilizers happen in a more efficient and accountable manner and does not get siphoned-off in between by unscrupulous black marketers
And now let’s look where the government plans to raise resources from in order to make these expenditures. Income tax: More modernization of the taxation system is being mooted. A new form called "SUGAM" will make it easier for small tax payers to file their returns.
Income Tax:
1.
A miniscule hike of Rs 20000 in the exemption limit for tax payers has been introduced.
2.
The older citizens can feel happy the definition of
"senior citizen" has changed from age 65 to age 60
3.
And for those who live to be over 80 they get a higher tax free income limit of Rs 5 lacs
4. Deduction of Rs 20000 for infrastructure bonds has been retained.
5. The direct taxes code which has been proposed to be implement from April 1, 2012.
Selling off PSU's: Continuing the focus on divesting government stakes in Public Sector
Undertakings the FM has proposed to look at raising Rs 40000 crores from divestment in 11-12
