In a good sign, the government will depend less on borrowing to finance budgetary proposals in 2011-12 than in the ongoing 2010-11 financial year.Borrowings will comprise 27 paise out every rupee that the government plans to spend in 2011-12, compared to 29 paise in the current financial year, as per the proposals presented by Finance Minister Pranab Mukherjee in Parliament on Monday.
Finance Minister Pranab Mukherjee on Monday raised the income tax exemption limit raised by Rs 20,000 in his Budget proposals for 2011-12. So individual taxpayers will now get income tax exemption till an annual income of Rs 1.8 lakh (Rs 180,000). This will provide thousands of taxpayers some relief. The finance minister said that each taxpayer will save Rs 2,000 per year because of this proposal.
The government on Monday said low-cost housing loans of Rs 15 lakh (Rs 1.5 million) will be eligible for one per cent interest subsidy, which will help in increasing the demand for such housing. In his Budget speech, Finance Minister Pranab Mukherjee said he is liberalising the existing scheme of one per cent interest subvention on housing loans up to Rs 15 lakh, where the cost of house does not exceed Rs 25 lakh (Rs 2.5 million).
The Union Budget 2011-12 aims to sustain economic growth, strengthen infrastructure, moderate the price rise, particularly of agricultural produce and reduce social imbalances through inclusive development. Presenting the budget 2011-12 in the Lok Sabha today, the Finance Minister Shri Pranab Mukherjee said that the budget is a transition towards a more transparent and result oriented economic management system in India. He said while developments on India’s external sector have been encouraging, continued high food prices have remained our principal concern. He said that the trend revealed shortcomings in distribution and marketing system. The Finance Minister said that huge differences between wholesale and retail prices are at the expense of remunerative prices for the farmers and competitive prices for consumers.
Union Finance Minister, Shri Pranab Mukherjee today announced in his Budget Speech that discussions are underway to further liberalize the Foreign Direct Investment (FDI) policy. All prior regulations and guidelines have earlier been consolidated into one comprehensive document in order to make FDI policy more user friendly. This is reviewed every six months, said the Finance Minister. The last review was released in September 2010.
The Finance Minister also stated that amendments are proposed to the Banking Regulation Act to give some additional licenses to the private sector players. He mentioned that the discussion by way of inviting feedback from the public on the paper issued in this context by the Reserve Bank of India (RBI) in August 2010 is complete. Shri Mukherjee said, he proposes to bring in this regard in the current Session and RBI is planning to issue the guidelines for banking licenses before close of this financial year.
The Union Finance Minister, Shri Pranab Mukherjee announced today that the Government has set up a Financial Sector Legislative Reforms Commission under the Chairmanship of Justice B. N. Srikrishna in pursuance of the announcement made in Budget 2010-11. The Commission will rewrite and streamline the financial sector laws, rules and regulations and bring them in harmony with the requirement of a modern financial sector. It will complete its work in 24 months.
Hotel accommodation, in excess of declared tariff of Rs. 1000 per day and service provided by air conditioned restaurants that have license to serve liquor are the new services which have been brought under the service tax net. While proposing to levy service tax on these services, the Union Finance Minister, Shri Pranab Mukherjee has said that the hotel accommodation with declared tariff of over Rs. 1000 per day will have to pay the service tax with an abatement of 50 per cent.
Union Budget 2011-12 estimates to make net revenue gain of Rs. 4000 crore for the year by way of new Service Tax proposals. In keeping with thrust to encourage voluntary compliance, the penal provisions of Service Tax are under the process of rationalization. This will ensure less harsh treatment to those who have maintained truthful records but fallen short of discharging their tax liability.
The exit norms of the co-contributory pension scheme “Swavalamban” have been relaxed. Announcing this in his Budget speech in the Lok Sabha today, the Union Finance Minister, Shri Pranab Mukherjee said that a subscriber under Swavalamban Scheme will now be allowed to exit at the age of 50 years instead of 60 years, or a minimum tenure of 20 years, whichever is later.
