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Budget 2011-2012


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Title: Budget 2011-2012

Budget 2011-2012
  • Ashish Bansal

Income Tax
  • A miniscule hike of Rs 20,000 in the exemption
    limit for tax payers has been introduced.
  • The older citizens can feel happy as the finance
    minister has decrease the income tax "senior
    citizen" definition from age 65 to age 60.
  • For those who survive all the hardships of life
    and live to be over 80 they get a higher limit!!
  • Deduction of Rs 20,000 for infrastructure bonds
    has been retained.

  • Mobile phones to be costlier
  • However, mobile handset prices will become more
    expensive as Finance Minister Pranab Mukherjee on
    Monday announced one per cent hike in the Central
    Excise duty for 130 items, including phones.
  • Comeing April 1 and central excise duty on mobile
    phones will be raised from the current four per
    cent to five per cent.

  • Steel
  • Steel prices to come down.
  • Items that will become cheaper also include solar

  • Cars
  • Cars could either cost less or their prices might
    remain the same as the finance minister has not
    made any change in excise duty rates.
  • Hybrid cars
  • Duty reduced on hybrid electric cars along with
    batteries imported for such vehicles.

  • Jewellery
  • Precious stones, gold and silver jewellery to be
    exempted from central excise duty.
  • However,  labelled jewellery will burn a deeper
    hole in the pockets as they will now attract one
    per cent excise duty.

  • LEDs
  • LEDs (light-emitting diodes) to cost less.
    Perhaps some electronic goods that require LEDs
    will cost less.
  • Raw silk
  • Basic customs duty on raw silk reduced from 30 to
    5 per cent.
  • Duties on parts will make pc costlier .
  • Farm equipment
  • Basic customs duty on agricultural machinery
    reduced to 4.5 per cent from 5 per cent.

  • Hotel accommodation
  • Service tax on hotel accommodation above Rs 1,500
    per day.
  • Hotel stay will also become more expensive as
    rooms with a tariff of more than Rs 1,000 a day
    will attract an effective service tax of 5 per

  • Branded clothes
  • Branded clothes readymade garments will also
    become expensive as they will attract 10 per cent
    excise duty.

  • Air travel
  • The Budget also proposed to raise service tax on
    air travel by Rs 50 in the case of domestic air
    travel and Rs 250 on international flight by
    economy class.
  • Moreover, higher class travel in domestic sector
    will attract a service tax rate of 10 per cent
    bringing it on par with journeys by higher
    classes on international air travel.

  • Big hospitals
  • With the finance minister proposing changes in
    service tax band, treatment in air-conditioned
    private hospitals, air travel and lawyer fees
    will cost more henceforth.
  • The government has proposed to put all forms of
    payments -- by individuals, insurance firms and
    business houses, for treatment in private
    hospitals with more that 25 beds and air
    conditioning facility under the service tax net
    resulting in an effective tax of five per cent.
  •   Health
  • Service tax net extended to include health

  • Legal cases
  • Legal cases will also become a costly affair with
    Mukherjee proposing to cover all legal
    consultations, except individual to individual,
    under the service tax net.

  • Liquor in chic restaurants 
  • Drinking liquor in air-conditioned restaurants
    will also be more expensive as it will now come
    under the service tax net.

  • Ketchups, soups, etc 
  • The proposals made by Finance Minister Pranab
    Mukherjee also mean that ready-to-eat food items,
    such as ketchups, soups, mudis (puffed rice),
    coffee and tea mixes, flavoured milk, supari will
    be dearer as they will now attract higher excise

  • Selling off PSUs
  • Continuing the focus on divesting government
    stakes in public sector undertakings, the finance
    minister has proposed to look at raising Rs
    40,000 crore (Rs 400 billion) from divestment in

  • Notebooks, text books
  • According to the budgetary proposals, notebooks
    and exercise books, which were earlier exempted
    from excise duty will now attract one per cent
    duty without CENVAT credit facility. Moreover, a
    general effective rate of 5 per cent has been
    prescribed for these items and facilities.
  • Similarly, fountain pen ink, ball pen ink,
    geometry boxes, colour boxes and pencil
    sharpeners will also now attract a similar levy.
  • Educational text books are also expected to
    become costlier as paper used in printing them
    will no longer be exempted from excise duty.

  • Vaccines 
  • Vaccines, other than those included in National
    Immunization Programme, will also register an
    increase as they will attract a concessional duty
    of one per cent without CENVAT credit facility.
  • Coal
  • Red hot coal may push up cement and steel prices
    (CIL Coal India).

  • Higher allotment under Rashtriya Krishi Vikas
    Yojana of Rs 7,860 crore 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 crore.
  • 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.

  • The Budget has made some items, including raw
    materials for syringe and needles, mobile parts
    and accessories like hands free headphones,
    incense sticks, sanitary nakpins and diapers,
    cheaper by reducing taxes.

Rail Budget 2011
Common Man Budget
  • No hike in fares, E-booking charges
    reducedMamata Banerjee has announced that there
    will ne no hike in passenger fares.
  • However, an added announcement declared a
    reduction in E-booking charges.
  • The booking charges have been reduced by Rs 10
    for AC and Rs 5 for non AC. Common Man Budget".

  • New trains introduced by Mamta9 new Duronto
    trains, 3 Shatabdi's and 56 super Fast trains are
    set to run on tracks. Following is the summary of
    new trains introduced .
  • 9 Duronto Trains Allahabad-Mumbai,
    Madurai-Chennai, Chennai-Thiruvananthapuram,
    Pune-Ahmedabad, Sealdah-Puri, and Mumbai
    Central-New Delhi routes (Non AC),
    Allahabad-Mumbai, Sealdah-Puri, Mumbai
    Central-New Delhi, Ahmedabad-Rohtak (AC).3
    Shatabdi Trains Pune-Secunderabad, Jaipur-Agra
    and Ludhiana-Delhi.56 Express Trains2 AC Double
    Decker Trains Jaipur-Delhi and Ahmedabad-Mumbai
    routes.Special trains on Vivekanad and Tagore

  • New Smart Card for long distance travel
  • While presenting the Rail Budget 2011, Mamta
    introduced a new concept of Smart Card - "Go
    India" for long distance travel by Indian
    railways. The all new concept is expected to
    benefit passengers traveling long distance by
    cutting down their time and cost of buying
    multiple tickets.

Go India
  • 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 by shoring up systems and
    bringing stricter control on institutions.
  • Key points of the budget The government is very
    keen on ensuring that inflation is curbed and
    food security is ensured for all citizens.

  • Infrastructure
  • A main Focus
  • Rs 214,000 crore 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 future which could lead to reduction
    in inflation in the longer term.

  • Bring the black money back
  • As expected the finance minister has taken note
    of the hue and cry over black money.
  • Many new initiatives have been mooted to bring
    back black money in circulation.

  • Questions????
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