Economy & Nation Exclusive
Union Budget 2012 Highlights: FM presents Budget amid uproar in House

Finance minister Pranab Mukherjee presented the General Budget for 2012-13 in the Lok Sabha amid uproar in the House. Highlights of the finance minister's speech:

  • Baggage allowance for people of Indian origin increased from Rs25,000 to Rs35,000 and for children from Rs12,000
  •  Customs and central excise proposals to net revenue of Rs27,280 crore
  •  Branded silver jewellery fully exempted from excise duty
  • Unbranded gold jewellery to be included in the 1% levy on precious metal jewellery
  •  Import duty on large cars, MUVs, SUVs enhanced
  • Oil cess on domestic crude raised to Rs4,500 per ton from Rs2,500 per tonne
  •  Customs duty on standard gold bar and coins exceeding 99.5% purity, platinum and non-standard gold raised
  •  Installation of solar plants exempted from CVD
  • Agriculture credit target raised to Rs5.75 lakh crore
  •  Diamonds emerald and ruby prices will increase
  •  Basic customs duty on cigarettes reduced; duty on hand-rolled beedis increased
  •  Customs duty on some gold and platinum products increased
  •  To allow external commercial borrowing to part finance rupee debt in power projects
  •  Proposes to remove sector-specific restriction on venture capital fund investments
  •   Mobile phone parts exempted from basic customs duty
  •   School education exempt from service tax
  •  12% excise duty imposed on branded retail garments
  •   LCD and LED panels exempted from custom duty
  •   Excise duty on handmade and semi-mechanised matches reduced from 10% to 6%
  •  Customs duty on import of parts of aircraft, tyres and testing equipment fully exempted
  •  Full exemption from basic customs duty for equipment for road and highway construction
  •   Thermal power companies exempted from customs duty for 2 years
  •   5% customs duty exempted on equipment for fertilizer plants
  •   LNG out of customs duty
  •   To raise duty on large cars to 27%
  •  FY12-13 net market borrowing at Rs4.8 lakh crore
  •  Standard excise duty hiked to 12%
  •  Service tax up from 10% to 12%; Rs18,660 crore will result from service tax rise
  • Direct Tax Code implementation deferred
  • Income Tax at 30% for income of over Rs10 lakh
  • Income Tax at 20% for Rs5 lakh to Rs10 lakh
  •   Income Tax at 10% for Rs2-Rs5 lakh bracket
  •   No change in corporate tax rates
  •  Raises exemption limit to Rs2 lakh from Rs1.8 lakh
  •   Non plan expenditure at Rs9.7 lakh crore
  •   Tables a white paper on black money issue
  •  Coal India advised to sign FSA with power plants
  •   Agri credit target for FY12-13 at Rs5.75 lakh crore, up Rs1 lakh crore
  •  To introduce new law for micro finance institutions
  • Credit guarantee fund for loans to students
  •   Interest subsidy for women SHGs up to Rs3 lakh at 7%; 3% more for SHGs that repay promptly
  •   Allocation to National Rural Livelihood Mission for women increased by 34%
  •   Allocation under National Rural Health Mission raised to Rs20,822 crore from Rs18,115 crore
  •   Rs14,000 crore for rural drinking and sanitation in FY12-13
  •  New equity savings scheme announced
  •   Govt doubles allocation for tax-free bonds to Rs60,000 crore for financing infrastructure projects in 2012-13
  •  To allow qualified foreign investors in Indian corporate debt markets
  • To allocate Rs14,232 crore for UID project, up 13% in FY12-13
  • Rs50,000 tax exemption for retail investors
  • Tax exemption on individual share investment below Rs10 lakh
  • Securities Transaction Tax (STT) may be abolished
  • Allow ECB for low cost housing projects
  • To move national housing amendment bill
  • Tax free bonds of Rs10,000 cr for IRFC
  • Propose central KYC depository
  • To roll out computerized scheme for fertilizer subsidy transfer
  • Central subsidies to be under 2% of GDP
  • High crude oil prices hit growth, averaged $115/bbl in 2011-12
  • Current account deficit to be at 3.6%; Expect current account defict to decrease next year
  • To address black money, corruption in public life
  • To enhance supply side; cut infra bottlenecks
  • Efforts to arrive at broad-based consensus with state governments on allowing FDI in multi-brand retail up to 51%
  • Government to raise Rs30,000 crore in 2012-13 from disinvestment of stake in PSUs Direct Tax Code (DTC) Bill to be enacted at the earliest
  • New Rajiv Gandhi Equity scheme to allow for 50% deduction to small investors
  • Pilot project for direct transfer of subsidiary for kerosene has been initiated in Alwar, Rajasthan
  • Food Security Act will be fully provided for and subsidy to be 2% per cent of GDP for next two years
  • Govt to fully provide for food subsidy and food security act in 2012-13
  • GDP to grow by 7.6% in 2012-13; plus, minus 0.25%
  • Headline inflation to moderate further in next few months and remain stable thereafter
  • We have to expedite decisions to improve delivery systems to address problems of black money and corruption
  • Amendments to FRBM Act part of the budget
  • Expect average inflation to be lower next year; expect current account deficit to be lower next year
  • Economy is now turning around, manufacturing appears to be on revival
  • GDP to grow by 6.9% in 2011-12
  • IPO equity offer above Rs10 crore will have to be made electronically in capital market reforms
  • Rs15,888 crore to be provided for capitalisation of public sector and regional rural banks and NABARD
  • UID allocation at Rs14,232 crore in FY13

    More to follow...  




5 years ago



5 years ago

use less benefit for salaried class,senior citizens and women .service tax raised again to 12% prices will go up.
useless budget to common man rs 20000 increase is an eye wash .cut pension to IAS officers and Government employees you can reduce deficit

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Life Exclusive
Sorting out supply delays with irate customers

The hanky-panky practice of getting the B/L issued without the goods actually on board had somehow come into practice, with disastrous consequences. However, issues get sorted out before the writer meets angry customers in Saudi Arabia. This is the eighth part of the series describing the unknown triumphs and travails of doing international business in Asia in the seventies

From the airport to my home on Zaabeel Road, Bur Dubai, it did not take more than fifteen minutes after I got my taxi. The driver wanted to take another passenger further down and I did not object, as otherwise he would have to wait for a longer period before he got his cab.

I reached home and literally hit the sack and woke very early next morning. It is said that the early bird catches the worm; here in Dubai, and if you happen to have your office on the Deira side, you catch a good, safe parking space! When I walked in, I found Shankar opening the office, with fifteen minutes to spare before the official opening at 8am.

As I sat down, Marge walked in; she was one of the most efficient, hard working responsible and intelligent secretary one can get—absolutely trustworthy, dependable and a quick learner. In my absence, she was in a position to prepare and negotiate documents, against LCs on shipments made. After a few minutes of customary greetings, she was gone, on the way to get my coffee.

Her note said it all; how upset and angry Abdullah was as his goods were also shut out, though he had documents in hand, all paid for; and when his office contacted all that the shipping company could convey was that the “goods are being loaded” on the vessel right now, and “in your case”, the goods should reach you in about 10 days, if not earlier. Our vessel is touching Dammam first before proceeding to Kuwait. Al Dahman was angry because his special large diameter pipe fittings that were due to arrive on the vessel, had docked, but without his cargo. There were at least seven more irate customers and Abdullah wanted me to personally come and explain the mess to him.

The local market was crazy and building merchants were willing to pay more money to get their hands on various goods, but, it was not only our goods, most others were also on similar vessels plying from Bombay port. The hanky-panky practice of getting B/L was rampant. In true sense, B/Ls were to be issued only when the goods are actually on board the vessel but this reckless practice had somehow come into practice, with disastrous consequences.

Marge had set the coffee on the table, and was clearing up my briefcase. She had already prepared the visa application form for Saudi Arabia, attached the photos and was just waiting to get my signature. She had already arranged for the official invitation letter from Abdullah! I had to wait at least for a couple of days more before I could actually take my flight to Riyadh to meet our customers.  

My visit visa to Saudi Arabia was generally for fifteen days; I would spend three days each in Dahran (Dammam covered) and Jeddah, and seven days in Riyadh, giving the allowance for Fridays and flight schedules. Extension of stay was cumbersome, though possible, through the sponsor. This time, hopefully, I was planning to cut it short, and spend not more than seven days.  But I didn’t want to leave until I had actual shipment status. Vijay had promised to take the trip to Bombay and send me ‘real’ status.

We continued to get conflicting statements on raw material availability and government plans on the OGL and how they propose to resolve the issues relating to orders placed, etc.

My flight was confirmed for the fourth day after my arrival, but as the uncertainty of actual shipment details was looming large, Marge was smart enough to have it postponed to the sixth day, as the fifth was a Friday; she wanted me to at least relax for a day before my trip.

Even though Friday was the weekly holiday, it was a normal practice for me to spend at least 3/4 hours in the morning and return home for lunch. I was in office, and was surprised when Lala Kedarnath walked in with a bunch of invoices and shipment details, with newspaper cuttings and reports of the problems in Bombay port and that it was returning back to normalcy. He confidently stated that some ships had already left with our cargo.

Sorting out all these details took quite some time. Due to lack of planning or more due to urgency of older orders, there were also many shipments that were actually on the sea, merely because, they too were victims of earlier despatches. This was in addition to the seven complaints that we had on hand.

In fact, on the day of departure, I spent the whole day in the office, and got dropped straight at the airport, from the office. I had no choice. And, during the day Lala ‘volunteered’ to accompany me, as he had come prepared with a visa, but, it was much easier to handle the irate client all by myself than taking the additional risk of having an elderly person on this mission.

I did receive, generally a cold welcome from most on arrival in their offices. But, some of the clients had received telegraphic or telex confirmations, directly from shipping companies, on our specific request that their goods were actual on board and that they would be able to deliver them in the next few days. So, in the end, it was not bad at all, and the mixed reception was better than a hostile one!

In spite of this fiasco on shipments, I managed to pick up a few orders, including Abdullah’s, our principal buyer, and returned home to Dubai with a great sigh of relief.

Meantime, our Chinese contacts did not make a big fuss about the contract when they were told that, under force maejure conditions, it was not possible to proceed with it; but, at the same time, the pig iron prices had started moving upwards, by a few dollars more per tonne, and the whole issue was forgotten before the month was out. Very much like our own government departments, our manhole suppliers of Diamond brand manholes did not know about our pig iron contract and their shipments to us came in without a hassle.

Under these circumstances, Amanda had decided to quit her company and shown interest to work with us in Dubai or in Hong Kong. We had, in fact, hinted to her that we would be happy to utilize her experience and knowledge of the market and suitably compensate her. 

We opened our office in Hong Kong within the next ten days.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)

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