Union Budget 2012-13, as it happened
Income tax exemption limit hiked to Rs 2 lakh -- this and some other sops for small industries apart, there wasn't much to cheer about in the Finance Minister's Union Budget for 2012-13. The big blow to consumers came in the form of a revised sales tax (up to 12%). Read on for a blow-by-blow account of the Union Budget, as Pranab Mukherjee presented it.
A very strange Budget indeed. Despite the brouhaha unleashed on the Railway Minister Dinesh Trivedi, the Rail Budget was, by all accounts, very balanced. The same cannot be said, however, of the Union Budget presented by the Finance Minister, Pranab Mukherjee. While most analysts and experts have written this one off as a fence-sitting exercise, calling it 'bad to average', it is the aam aadmi who will bear the brunt, as the prices increase.
The big question today was whether Pranab Mukherjee would deliver to India the most populist budget yet? In the end, the answer, sadly, was a resounding 'No'.
We hope you enjoyed this Live coverage of the Union Budget 2012-13. This is Dipankar Paul, signing off.
1.17 pm: P Chidambaram, former Finance Minister, reacts to Pranab Mukherjee's budget: "Pranab Mukherjee has laid the foundation for fiscal consolidation. The next few budgets, combined with this one, will bring India back to the glory days of the past."
1.10 pm: Uday Ved, Head of Tax practices at KPMG believes that the common man will now end up paying more for most items.
From Twitter
Rajdeep Sardesai says Majority of panelists on CNN IBN rate the budget bad or average.
Pritish Nandy says the Budget shows that UPA2 has truly lost connect with the people. What an opportunity missed!
Rajdeep Sardesai says Majority of panelists on CNN IBN rate the budget bad or average.
Pritish Nandy says the Budget shows that UPA2 has truly lost connect with the people. What an opportunity missed!
12.50 pm: Pranab Mukherjee commends the Union Budget 2012-13 to the House.
12.49 pm: Customs duty on gold and platinum doubled to 4%, for jewellery doubled to 10%
- Branded silver jewellery exempted from Customs duty
- Import duty concessions on parts of hybrid/electric vehicles extended to other components.
12.46 pm: Highlights
- Aircraft tyres exempted from basic Customs and excise duty
- Thermal power companies exempted from Customs
- LNG expemted from import duty
- Basic Customs duty on bicycles raised to 30 per cent
Dipankar says --Amid the drone and groans of the Members of Parliament, and the maze of numbers, here's what stands out: most luxury items, eating out, air travel will now cost more. This was meant to be a populist budget. Has the UPA goofed up again?
12.39 pm: Cars to cost more. Excise tax on cars raised, small cars at 12% from 10%; large cars at 24% from 22%. On large cars, Rs15,000 additional excise removed, instead ad valorem rate of 27%.
12.38 pm: Highlights
- Tax exemption of up to Rs 5,000 for health insurance towards annual preventive check up
- Venture capital funds to be allowed to invest across sectors
- Dividend repatriation for foreign companies extended by a year
- Securities Transaction Tax reduced to 0.1%
- Compulsory reporting requirement for companies with assets abroad
- Direct tax proposals to result in net revenue loss of Rs 4,500 cr
- No change in tax structure for corporates
- All services to be taxed except those in the negative list under 17 heads
- Entertainment biz gets services tax exemption on copyright and on recording
- Peak Customs rate unchanged
12.34 pm: 12% general excise duty and service tax. Guess what that means: Yes, you pay more for household items.
12.33 pm: Total debt of central government to be 45 per cent of GDP.
12.30 pm: Cinema sector exempted from service tax.
12.27 am: Highlights
- Exemption on interest from savings bank accounts up to Rs 10,000
- Venture capital funds to be allowed to invest across sectors
- Dividend repatriation for foreign companies extended by a year
- Securities Transaction Tax reduced to 0.15%
- Cumpolsory reporting requirement for companies with assets abroad
- Direct tax proposals to result in net revenue loss of Rs 4,500 cr
- Defence outlay at Rs 1.95 lakh crore
- Happy to note that in the 11th plan met 99 per cent of the total Plan outlay
- Direct tax targ\]\et fell short by Rs 32,000 crore
- Non-plan expenditure for FY 2013 is Rs 9.69 lakh crore higher 18.8 per cent than estimated
- White paper on black money to be tabled in current session of Parliament
Prem says--Pranab Da says he has no issues with a "roll back of speech (read Budget) ". Is his country cousin Mamata listening?
12.16 pm: The big one, that falls flat: Pranab increases income tax exemption limit from Rs 1.8 lakh to Rs 2 lakh.
The new tax slabs:Income upto Rs 2 lakh - No tax
Rs 2 lakh - Rs 5 lakh - 10%
Rs 5 lakh - Rs 10 lakh - 20%
Rs 10 lakh and up - 30%
Rs 2 lakh - Rs 5 lakh - 10%
Rs 5 lakh - Rs 10 lakh - 20%
Rs 10 lakh and up - 30%
12.15 pm: Rural development fund of Rs 20,000 crores
12.14 pm: Disability pension hiked to Rs 300 per month
12.13 pm: White paper on black money soon
12.12 pm: Allocation of Rs 25,555 cr for right to education
12.14 pm: Disability pension hiked to Rs 300 per month
12.13 pm: White paper on black money soon
12.12 pm: Allocation of Rs 25,555 cr for right to education
12.10 pm: Highlights
- NRHM allocation hiked to 20820 crores
- Aim to build Rs 9,000 km new roads.
- Allocation of funds for mid-day meal Rs 11,937 cr
- Rs 5,000 cr venture fund for small and micro sector
- Agriculture outlay increased by 18 per cent
- No new polio case reported in last one year
12.04 pm: Interest subsidy for women SHGs up to Rs 3 lakh at 7 per cent; 3 per cent more for SHGs that repay promptly.
12.01 pm: Allocation to National Rural Livelihood Mission for women increased by 34 per cent.
12.00 pm: NRHM allocation of Rs 20,822 crore from Rs 18,115 crore.
11.59 am: PPP schemes for 2,500 schools announced. Credit guarantee fund for loans to students.
11.58 am: Rs 20,000 crore for rural infrastructure development fund, of which Rs 5,000 crore specifically for warehouses.
11.57 am: Budgetary allocation for rural, water and sanitation schemes hiked by 27% to Rs 14,000 crore.
11.56 am: To provide Rs 10,000 crore to Nabard for refinancing regional rural banks.
11.55 am: Additional 3 per cent interest subsidy for farmers proposed.
Infrastructure bottlenecks impeding growth, says Pranab. Can you tell us something new Pranab Da?New target to lay 24 km of roads a day, compared with 20 km last year. Just over 50 pct of that target was met, says a wag.
11.55 am: Highlights
- Interest subvention of 3 per cent for farmers who repay loan on time
- Borrowing cap set at $1 billion
- Foreign funds allowed for cheap housing
- FDI welcome in defence manufaturing
- Infra sector to open up for foreign investments
- Rs 15,888 cr to refinance PSU banks and RRBs
- IPOs over Rs 10 cr through electronic route
- Tax free bonds to fetch Rs 60,000 cr
- PPP scheme for infrastructure investment
- Foreign investors can enter bond markets
11.53 am: Kissan credit cards to be modified to make them into smart cards to be used at ATMs.
11.48 am: Target for agri-credit hiked to Rs 5,75,000 crore.
11.47 am: Rs 500 crore for geo-textile cluster in North-east region; handloom centres also in Nagaland, Mizoram and Jharkhand.
11.46 am: Proposes Rs 5,000 crore opportunity venture fund for MSMEs channelled through SIDBI.
Mayuresh says --Govt working to address working capital needs of aviation. Direct import of jet fuel allowed. Aviation stocks briefly up!
Fiscal deficit grew due to subsidies and to check that central subsidies are set to be under 2% of GDP. Well said, but the implementation part is where we always falter.
11.44 am: One per cent interest subvention scheme for housing loan of up to Rs 15 lakh extended.
11.43 am: Targets 8,800 km of national highway in next fiscal, 14 per cent increase in allocation for road transport.
11.42 am: ECB to part-finance rupee debt of power projects. ECB for working capital requirement for airlines industry with a ceiling $1 billion.
Disinvestment target set at 300 billion rupees. How much of that will be bankrolled by the state-run institutions, which have had to bail out many such flop shows, remains to be seen.
A GDP growth of 7.6 per cent seems to be a wild projection just to keep the market in goodhumour, given the dismal scenario with not much positive cues to look forward to.
11:40 am - Sensex up about 130 points at 17805.64. Market responds positively to the initial Budget proposals.
11:40 am - Sensex up about 130 points at 17805.64. Market responds positively to the initial Budget proposals.
11.38 am: To encourage investment in infrastructure sector tax-free bonds of Rs 60,000 crore for next fiscal. Of this Rs 10,000 crore each for NHAI, IRFC, IIFCL, Power; Rs 5,000 crore each for HUDCO, NHB, SIDBI, and Ports.
11.36 am: Proposes Rajiv Gandhi Equity Savings Scheme, 50% I-T deduction for those with income below Rs 10 lakh.
11.35 am: To protect the financial health of public sector banks. To provide Rs 15,888-crore for capitalisation of public sector banks and RRBs. To create financial holding company to look at the financial needs of the banks.
11.34 am: New tax exemptions for retail investments. Infrastructure investment to go up to Rs 50 lakh crore.
11.34 am: Reduction of taxes after implementation of DTC and GST.
Tax incentives to retail equity investors, albeit with a lock-in period, should pump in more money tomarkets, which have so far reacted positively to the budget speech. Sensex is up 134 points.
11.29 am: GST to come into force in August 2012.
11.28 am: Expect to raise Rs 30,000 cr through disinvestment.
11.28 am: DTC enactment steps to be taken at the earliest.
11.27 am: Govt to fully fund food subsidy. Food and fertiliser subsidies to continue.
11.26 am: Efforts on to arrive on a broad based consensus with states on FDI in retail.
11.24 am: Have to accelerate pace of reform, focus on domestic demand driven growth.
11.21 am: Will address black money and corruption in public life.
11.20 am: Food Security Act fully provided for; Direct subsidy for farmers, says Pranab.
11.18 am: FY12 avergage crude prices will be seen at around $115 per barrel.
11.17 am: Current Account deficit to be at 3.6% in FY12.
11.14 am: FRBM implementation back on track
11.13 am: Fiscal balance has deteriorated in 2012, however, I expect inflation to reduce.
11.12 am: Pranab expects India to grow at 7.6% in the FY12-13.
There is a lot of talk on whether Pranab Mukherjee will raise the tax exemption limit to Rs 3lakh. If that is done, it will certainly be a big boost to confidence levels and spending. However, given the concernover deficit, if the FM has to balance that through a hike in excise duties, much of the impact will be nullified bythe inflationary spiral. Pranab-da's task is surely not an enviable one today.
Related:Taxpayers may get some relief from Budget
11.05 am: For Indian economy it was a year of recovery interrrupted, says the Finance Minister
11.02 am: Pranab says India is battle double-digit inflation and that the outlook is grim.
11.00 am: Pranab Mukherjee begins his presentation of the Union Budget.
10:50 am: Sensex up about 78 points at 17,754. Hopes already high at Dalal Street!
10.45 am: Another 15 minutes to go. The big announcement that everyone expects Pranab Mukherjee to make is raising the income tax exemption limit to Rs 3 lakh from the current Rs 1.8 lakh.
10.15 am: The debates are raging on the many TV channels: Should Pranab Mukherjee go in for a reformist budget? Many agree and say that is the way forward.
One thought: Is Pranab Mukherjee the best man to be the finance minister of India. Notreally. Most people would vouch for P Chidambaram, bolder and more reform-oriented (once voted one of thebest finance ministers in the world). Pranab is known to be more cautious and staid on reforms. But, such is thepaucity of talent in the Congress party that stung by 26/11, Chidambaram was shifted out to Home, where by allaccounts he is doing a reasonably fine job. Meanwhile, Pranabda valiantly beavers away.
All the PMs from the Nehru-Gandhi family have presented the Union Budget -- JawaharlalNehru, Indira and Rajiv Gandhi. The last two because both their finance ministers -- Morarjee Desai and V P Singh,respectively -- resigned just before the presentation and they had to stand in. Rahul may well brush up on thebudget glossary, just in case!
9.58 am: Pranab Mukherjee reaches Parliament. He will present the Union Budget in just about two hours from now.
Those who decry and run down economic reforms and India's growth story may pleasechew on this. India's per capita income - national income divided by the population - has risen to over Rs 5,000per month or over Rs 60,000 per annum in 2010-11. A whopping increase of 14.3 per cent over the previousyear. This would have actually been higher but for the dip in growth from 8.5 per cent a year ago to 6.9 per centthis year. While this does not eradicate poverty, it is a sure sign that poverty is declining and the middle class isgrowing its numbers rapidly.
9.30 am: About 15 minutes ago, Finance Minister Pranab Mukherjee left for Parliament. In a grey suit, the senior-most member of the UPA looked relaxed as he smiled for the cameras and politely refused to take questions.
9:15am: BSE up 4 points at 17,679.87;
- Top gainers - HDFC Bank, BHEL, DLF, Sterlite
- Top losers - Reliance Inds, M&M, Tata Motors, ONGC