Budget is one of the biggest challenges of Pranab Mukherjee's long political career and the Finance Minister set the tone for it when he described the year gone by as a "year of recovery interrupted." He began with listing grim ground realities - the global economic scenario, the battle with double digit inflation and said it was time for tough decisions.
Here are the highlights of this fiscal's financial budget.
• Income tax exemption limit rose to Rs.2 lakh to provide relief of relief of Rs.2, 000 for all assesses; 20 per cent tax on income over Rs.10 lakh, up from Rs.8 lakh.
• Deduction of up to Rs.10, 000 from interest from savings bank accounts. Defense to get Rs.1.93 lakh crore during 2012-13.
• Service tax rate raised from 10 per cent to 12 per cent to bring in Rs.18, 660 crore.
• Number of proactive steps taken on black money (stashed away abroad); information has started flowing in, prosecution to be initiated; White Paper in current session.
• No change in corporate taxes but measures to enable them better access funds.
• Withholding tax on external commercial borrowings reduced from 20 per cent to five per cent for power, airlines, roads, bridges, affordable houses and fertilizer sectors.
• National Skill Development Fund allocated Rs.1, 000 crore.
• Four thousand residential quarters to be constructed for paramilitary forces with an allocation of Rs.1, 185 crore.
• National Population Register to be completed in two years.
• Excise duty rose from 10 to 12 per cent.
• Cinema industry exempted from service tax.
• Branded silver jewellery fully exempt from excise duty.
• Customs duty on warning systems/track upgrade equipment for railways reduced from 10 per cent to 7.5 per cent.
• Import duty on equipment for iron ore mining reduced from 7.5 to 2.5 per cent
OVERVIEW:
The main 3 things to be looked upon are:
1. Revenues
2. Expenditure
3. Deficit
Revenues
Direct Taxes:
• 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 Minimum 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 up to Rs 10,000 for interest from savings bank accounts.
• Proposal to allow deduction of up to Rs 5,000 for preventive health check-up.
• Senior citizens not having income from business proposed to be exempted from payment of advance tax.
• Proposal to continue to allow repatriation of dividends from foreign subsidiaries of Indian companies at a lower tax rate of 15 per cent up to 31.3.2012
Indirect taxes:
• Rate of service tax has been increased to 12.36% (including education cess, secondary and higher education cess)
• The composition in the work of service tax for works contract has been increased to 4.94%.
• Proposals from service tax expected to yield additional revenue of Rs 18,660 Cr
• Excise duty rate has been enhanced from 10.30 to 12.36%
• The reduced rate of penalty under section 11AC will be applicable only where the reduced amount of penalty so computed is also paid along with duty and interest within 30 days.
• Given the imperative for fiscal correction, 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
• No change proposed in the custom duty on non agricultural goods.
Disinvestment:
In 2011-12, as against a target of ` 40,000 crore, the Government will raise about ` 14,000 crore from disinvestment. For 2012-13, At least 51 per cent ownership and management control to remain with Government
Interest Income:
Interest income in 2011-2012 is 3, 19,000 crore.
EXPENDITURE
• Budget Estimates of Expenditure for 2012-13 show a net increase of 172205 crore over the Revised Estimates.
• Non-Plan expenditure has shown an increase of 77784 crore and Plan expenditure has also increased by ` 94421 crore
• Finance Minister Pranab Mukherjee earmarked Rs.1, 93,407 crore for Defense — which is 1.9 per cent of the GDP — in the budget proposals.
Subsidies
• The Government has decided that from 2012-13 subsidies related to food and for administering the Food Security Act will be fully provided for
• The expenditure on Central subsidies is restricted to fewer than 2 per cent of GDP in 2012-13. Over the next three years, it would be further brought down to 1.75 per cent of GDP
• Subsidy on petroleum products has been reduced by Rs 24,900 crore
Salaries
• No major development in the salaries.
DEFICIT
Fiscal Deficit:
• Budget now projects a revised fiscal deficit estimate at 5.9% of GDP.
• Against this, the government targets a fiscal deficit at 5.1% of GDP in FY2013: a decline of Rs 83 billion from the revised FY2012 estimates.
Current account deficit:
• It’s likely to be around 3.6%
Trade deficit
• The developments in India’s external trade in the first half of the current year were encouraging
• India has successfully achieved diversification of imports and exports market
• Asia’s share in total trade increase is from 33.3 per cent in 2000-2001 to 57.3 per cent in the first half of 2011-12.
Thursday, April 5, 2012
Monday, January 30, 2012
Entrepreneurs’ success story
From Rags to Riches...
Pyara Singh Saini, Chairman and MD of Satnam Roadways, aged 60 is enjoying the leisure for the hard work in Logistics he did years back, started in late 1940’s.
Pyara Singh at the age of 20 with his couple of friends started with absolutely nothing, which in a way encouraged him to take tremendous risks in life. “No matter what I did, I knew I had nothing to lose. While I was studying in college, my father had a government job, have seen him slog, work all day, all his life. That time I decided, business I will take up, work day and night for years but I will be in a position one day to only relax and spend my money. And well that is what I am doing now past 4-5 years, enjoying the leisure with family and sons look after the business I developed,” reminisces Saini.
“We were four friends who decided to commence the logistics business. It wasn’t easy, had no money and no family support. All four of us planned everything about the business till 6 months and in that period worked as newspaper sellers on the streets. Enough money we earned to kick start to our work. 100rs per day per head, so in 6 months we had, 18,000 per head! Multiply 18000 by four. Blessed!” continues with a satisfactory smile.
Ask him after completing graduation how he managed to work on his project with no family support and he replies, “Initially we purchased one truck because of financial difficulties, but that single had a lot of outcome. We kept it on hold for some time and worked under a logistics firm to earn as well as to know how to run this business. All of us worked at different places for a year and came up with different experiences to develop our project. Now we were financially stronger. I finally realized that if you have the passion and belief in whatever you do, you can achieve anything. I knew that if I continue to work under somebody, I would be fulfilling his/her dreams - and not mine. And from that day on, I started dreaming big and never stopped.”
How he managed to run a bigger set-up and Saini replies, "Of course, as the organization gets bigger, the responsibilities also increase. But I have always believed that if you are great at people management, nothing is too difficult in life. My family was happier with my work by the time I was 30. With every bigger step, we set bigger goals for ourselves and that is how we've never had to worry about the present.”
Talking about the ups and downs, the wrinkle faced man constringe and says, “The budget had affected immensely, earlier not being financially strong, the petrol diesel price hike was like a halt to our business, not knowing how to react, what to do, we only sat back and waited for some miracle.”
Asking what he advises his young sons developing his business, the old man says impatiently, “I want ‘Satnam Roadways’ to transport goods even via shipping, also develop itself in as many cities possible. I am sure it will be one of the best, in generations to come.”
Pyara Singh Saini, Chairman and MD of Satnam Roadways, aged 60 is enjoying the leisure for the hard work in Logistics he did years back, started in late 1940’s.
Pyara Singh at the age of 20 with his couple of friends started with absolutely nothing, which in a way encouraged him to take tremendous risks in life. “No matter what I did, I knew I had nothing to lose. While I was studying in college, my father had a government job, have seen him slog, work all day, all his life. That time I decided, business I will take up, work day and night for years but I will be in a position one day to only relax and spend my money. And well that is what I am doing now past 4-5 years, enjoying the leisure with family and sons look after the business I developed,” reminisces Saini.
“We were four friends who decided to commence the logistics business. It wasn’t easy, had no money and no family support. All four of us planned everything about the business till 6 months and in that period worked as newspaper sellers on the streets. Enough money we earned to kick start to our work. 100rs per day per head, so in 6 months we had, 18,000 per head! Multiply 18000 by four. Blessed!” continues with a satisfactory smile.
Ask him after completing graduation how he managed to work on his project with no family support and he replies, “Initially we purchased one truck because of financial difficulties, but that single had a lot of outcome. We kept it on hold for some time and worked under a logistics firm to earn as well as to know how to run this business. All of us worked at different places for a year and came up with different experiences to develop our project. Now we were financially stronger. I finally realized that if you have the passion and belief in whatever you do, you can achieve anything. I knew that if I continue to work under somebody, I would be fulfilling his/her dreams - and not mine. And from that day on, I started dreaming big and never stopped.”
How he managed to run a bigger set-up and Saini replies, "Of course, as the organization gets bigger, the responsibilities also increase. But I have always believed that if you are great at people management, nothing is too difficult in life. My family was happier with my work by the time I was 30. With every bigger step, we set bigger goals for ourselves and that is how we've never had to worry about the present.”
Talking about the ups and downs, the wrinkle faced man constringe and says, “The budget had affected immensely, earlier not being financially strong, the petrol diesel price hike was like a halt to our business, not knowing how to react, what to do, we only sat back and waited for some miracle.”
Asking what he advises his young sons developing his business, the old man says impatiently, “I want ‘Satnam Roadways’ to transport goods even via shipping, also develop itself in as many cities possible. I am sure it will be one of the best, in generations to come.”
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