Latest Questions of Economics

Latest Questions of Economics

1. If interest payment is deducted from the fiscal deficit, then the balance is—
(A) Primary deficit
(B) Budgetary deficit
(C) Revenue deficit
(D) Monetary deficit
Ans : (A)

2. Which is the characteristic of a tax ?
(A) Tax is a payment for government service
(B) Tax is a compulsory payment
(C) Tax is voluntary
(D) To get benefit for a tax is compulsory
Ans : (B)

3. Which government income is included in revenue budget ?
(A) Tax-revenue
(B) Non-tax-revenue
(C) Both of above
(D) None of the above
Ans : (C)


4. Which is included in Capital budget ?
(A) Income received from public borrowings
(B) Income received from tax-sources
(C) Income received from non-tax sources
(D) All of the above
Ans : (A)

5. Which is not included in the principles of public expenditure as developed by Findley Shirras ?
(A) Principle of Economy
(B) Principle of Sanction
(C) Principle of Elasticity
(D) Principle of Surplus
Ans : (C)

6. Which of the following is the largest significant factor of revenue expenditure of Central Government ?
(A) Defence Expenditure
(B) Subsidy
(C) Interest Payment
(D) Salary
Ans : (C)

7. In comparison to revenue deficit; the size of fiscal deficit is always—
(A) Higher
(B) Smaller
(C) Similar
(D) Uncertain
Ans : (A)

8. What is CENVAT ?
(A) Direct Tax
(B) Indirect Tax
(C) Development Planning
(D) None of the above
Ans : (B)

9. Where is Indian Diamond Institute (IDI) established ?
(A) New Delhi
(B) Mumbai
(C) Surat
(D) Jaipur
Ans : (C)

10. What is the nature of income tax in India ?
(A) Proportional
(B) Progressive
(C) Regressive
(D) None of the above
Ans : (B)

11. Which factor is not related to economic development ?
(A) Continuous process
(B) Increase in real national income
(C) Long run and continuous increase
(D) Compulsory change in economic welfare
Ans : (D)

12. The index of measuring economic development is—
(A) Increase in productive assets
(B) National income
(C) Per-capita income
(D) Any of the above
Ans : (D)

13. Process of economic development means—
(A) Economic change
(B) Social change
(C) Ethical, institutional and cultural change
(D) All of the above
Ans : (D)

14. At 2004-05 prices, the per-capita national income in India during 2009-10 was—
(A) Rs. 21005
(B) Rs. 33588
(C) Rs. 25241
(D) Rs. 20241
Ans : (B)

15. What is the main characteristic of a capitalist or free market economy ?
(A) Individuals are the owners of factors of production
(B) Profit is the main motive of carrying out various activities
(C) Consumer freedom
(D) All of the above
Ans : (D)

16. Which is not the characteristic of socialist or planned economy ?
(A) Government is the owner of resources
(B) Production decisions are determined by the government
(C) Profit motive
(D) None of the above
Ans : (C)

17. The main feature of mixed economy is—
(A) Combination of free market economy and centrally planned economy
(B) Production is carried out by private individuals and government
(C) Both of the above
(D) None of the above
Ans : (C)

18. What per cent of GDP at 2004-05 prices was contributed by agriculture and related sectors in 2009-10 ?
(A) 14•6%
(B) 17•6%
(C) 19•0%
(D) 19•8%
Ans : (A)

19. According to World Development Report 2010, Low income economies are those whose per-capita gross national income is—
(A) $ 975 or less than this
(B) Less than $ 10725
(C) Less than $ 3465
(D) None of the above
Ans : (A)

20. Which of the following country's economy is known as high income economy ?
(A) America
(B) U.K.
(C) Singapore
(D) All of the above
Ans : (D)

Article:Economic Growth Of India In 2011

Economic Growth Of India In 2011

India has one of the fastest growing economies in the world. The Indian economy is characterized by population bursts, poverty, unemployment and child labour. These rising issues have become a major concern for the Indian economy but yet have proven to bring a raise in the Indian economy for the 2011 year. This economic burst will not be sustainable for the Indian economy in the approaching years.

Researchers have found that India is becoming a very populous nation. It readily has an increasing birth rate and statistics show that the numbers will keep growing. India’s population is expected to reach 1.5 billion in 2030, accounting Indians’ to occupy 20% of the human population on earth. If the population bursts continue then the economy of India will go downhill. It will have an effect on many factors that play a role in the economy. This will not only make life harder for people who are already on the verge of poverty but make those who are under the poverty line have a harder time surviving.

Poverty is a growing concern in India especially when the nation has been estimated to have a third of the world’s poor. Population bursts are causing poverty in the society, making it harder for families to gain access to their daily necessities. The increase in poverty is the leading cause of children being malnourished and underweight. If this continues than there will not be a future generation to run the Indian economy. Due to the baby boomers and poverty on the line Indians’ are on high demand for jobs.

The unemployment rate is increasing slowly due to the baby boomers. The poor are looking for any job opportunities viable to the. Although, many don’t have the proper education and don’t meet the criteria for the jobs due to not sufficient education, a major issue due to poverty. Indian officials need to make more jobs for the people and offer free education to children throughout middle and high school. At this rate many children will remain uneducated and will be a victim of child labour.

To make the economy boom the nation needs to put a stop towards child labour. It is very unhealthy for these children to work for long periods of times in an unhealthy environment. Just like other nation India needs to set aside money to help under privileged families meet their basic needs. Indians need to pitch in and work together to make the economy grow. On this rate not only will the Indian economy decline but also we will be endangering the future of our young generation. In order to have a sustainable economy we need to stop the population bursts, poverty, unemployment and child labour by educating the citizens of India.

Today's current affair

Today's news date April 17,2012
The Hindu
Rate cut to boost investment: Pranab.

• The Reserve Bank’s decision to cut lending rate by 0.50 per cent will encourage investments, Finance Minister Pranab Mukherjee said on Tuesday, while assuring the government will also take additional steps to boost growth and control price rise.
• “The growth, which has weakened in past months, should now improve,and The monetary policy announcements should help in investment revival and contribute to strengthening of business sentiments. In the coming weeks we will take some additional steps to further reinforce focus on growth,”
• In its annual monetary policy statement for 2012-13, RBI, after a gap of three years, cut interest rate by 0.50 per cent making credit cheaper.
• After clocking over 8 per cent economic growth for two years, India’s GDP expansion is estimated to have declined to 3-year low of 6.9 per cent in 2011-12 on account of high cost of borrowing that slowed investments.
• RBI had hiked policy rates 13 times between March 2010 and October 2011 to control persistently high inflation.
• It has projected the GDP growth for this fiscal at 7.3 per cent, which is lower than the government estimates of 7.6 per cent for the period.
• Mr. Mukherjee said moderation of core inflation rate for four months in a row, coupled with the sharper decline in inflation for manufactured products from 7.6 per cent in December to 4.87 per cent in March, has facilitated the change in monetary policy stance.
• “However food and primary inflation has shown signs of hardening. This is a cause for some concern. We intent to continuously monitor the situation and take the required steps to manage the short term supply constraint for those food items which contribute inflation,” he said. The government will do everything possible to maintain price stability.                                         RBI cuts lending rate, loans to become cheaper .
• After a gap of three years, Reserve Bank Governor D. Subbarao on Tuesday slashed short term lending rate by 0.50 per cent to 8 per cent, a move that will reduce the cost of home, auto and corporate loans.
• The reduction in the repo rate at which RBI lends to banks, has been prompted by deceleration in growth and softening of inflation.
• The cut is aimed at spurring growth to 9 per cent levels, seen before the global financial crisis that began in 2008, Mr. Subbarao said while unveiling the annual credit policy in Mumbai.
• “The reduction in the repo rate is based on an assessment of growth having slowed below its post-crisis trend rate, which, in turn, is contributing to the moderation in core inflation,” the Governor said.
• RBI has pegged the GDP growth rate for 2012-13 at 7.3 per cent. It is expected to be 6.9 per cent in 2011-12.
• After two consecutive cuts since January, the Governor, however, retained the cash reserve ratio at 4.75 per cent.
• Mr. Subbarao, however, ruled out further reduction in policy rate in the immediate future citing persistent upside risks to inflation and possible fiscal slippages driven by higher oil subsidies. It expects the inflation to be around 6.5 per cent by March 2013.
• “It must be emphasised that the deviation of growth from trend is modest. At the same time, upside risks to inflation persist. These considerations inherently limit the space for further reduction in policy rates,” he said.
• The decision is likely to prompt the banks to cut lending rates for home, auto and corporate loans, experts said.
• The RBI has raised lending rates 13 times between March 2010 and October 2011 to contain inflation that had been hovering near double-digit.
• This had led to clamour by industry to cut rates and spur industrial and economic growth that has slowed down considerably during the past few quarters.
• In order to ease tight liquidity situation, Mr. Subbarao announced doubling the borrowing under the Marginal Standing Facility for banks to 2 per cent of their deposits with immediate effect. It also permitted banks to borrow under the MSF even if they have excess government securities holdings.
• On the growth front, RBI expects FY’13 to be moderately better than the fiscal gone by. It has pegged GDP growth at 7.3 per cent, which is 0.3 per cent lower than the government projection for 2012-13. Growth in 2011-12 is seen at a 3-year low of 6.9 per cent.
• Even though spurring growth has taken the priority at the Mint Road, the RBI continues to be worried about the inflation scenario, calling it as “challenging” due to the sharp spikes in crude prices and food articles in the recent months.
• Noting the moderation in manufacturing inflation, the Governor pegged the annual overall inflation target at 6.5 per cent for FY’13 (which is 0.5 per cent lower than its projection for FY’12), saying the price rise will be range-bound through the year.
• Inflation was the key driver that guided the Reserve Bank to tighten money supply, and later hold rates during the past 36 months.
• The period also saw it inflicting 13 simultaneous hikes, by 3.75 per cent in repo rates over the 19-month period, making it one of the most aggressive central banks in the world.
• Apart from hurting investment activity, the rate hikes severely hurt the retail borrowers as higher loan repayments put household budgets for a toss.
• The RBI made a conscious effort at placating this class by reiterating that banks should not charge prepayment penalties from home loan borrowers. It also announced to set up a working group to assess the possibility of having long-term fixed interest products which will not be exposed to interest rate changes.                                                                           Sensex spurts 222 points after RBI rate cut.  
• The BSE benchmark Sensex spurted by over 222 points in late morning trade on Tuesday after the Reserve Bank cut short-term lending rate to support the economic growth.
• The 30-share index spurted by 222.33 points to trade at 17,373.28 soon after the RBI announced cut in short-term lending rate, repo rate, by 0.50 percentage point.
• Similarly, the National Stock Exchange Nifty index shot up by 67.20 points to 5,293.40 points.
• The upsurge was mostly lead by interest rate sensitive stocks such as banking, realty and auto.
• Realty major DLF was trading higher by 1.55 per cent at Rs. 202.60, while banking behemoth SBI gained 1.58 per cent to trade at Rs. 2,301.10.
• Private lender ICICI Bank rose by 1.13 per cent to Rs. 883.30.
• Among the sectoral indices, the BSE realty index gained the most jumping by 1.67 per cent to 1,811.25 points.                                                                                                                         RBI wants Govt to hike prices of petroleum products.                  
•  Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages.
• “Overall from the perspective of vulnerabilities emerging from the fiscal and current account deficits, it is imperative for macroeconomic stability that administered prices of petroleum products are increased to reflect their true costs of production,” RBI Governor D. Subbarao said in the Annual Monetary Policy Statement for 2012-13.
• While petrol prices are market-linked, the government fixes the rates of LPG, kerosene and diesel, which results in a large budgetary expenditure on subsidies.
• Global crude oil prices have surged since the beginning of 2012 on account of geo-political concerns in the Middle East and abundant global liquidity. The price of Brent crude rose to USD 120 a barrel in mid-April from $111 in January.
• RBI said the Budget estimate of oil subsidy is likely to fall “significantly short of the required amount“.
• High subsidies are putting pressure on the country’s fiscal deficit, which touched 5.9 per cent of GDP last fiscal and is pegged at 5.1 per cent in 2012--13. India imports about 80 per cent of its crude oil requirement.
• The government targets to bring down the subsidy bill to below 2 per cent of GDP this fiscal and 1.75 per cent in the subsequent years. Government has made a provision of Rs 40,000 crore towards fuel subsidy for 2012-13.
• “...Several upside risks to the budgeted fiscal deficit remain. Containment of non-plan expenditure within budget estimates for 2012-13 is contingent upon the government’s ability to adhere to its commitment of capping subsidies,” Dr. Subbarao said.
• Dr. Subbarao said any slippage in fiscal deficit would have implications for inflation. “Upside risks to inflation persist. These considerations inherently limit the space for further reduction in policy rates,” he said.
• Persistent demand pressure emerging from inadequate steps to contain subsidies, as indicated in the recent Union Budget, will further reduce the space for rate cut, he added.
• Fuelled by gold demand, crude oil prices and decelerating growth in emerging economies, India’s current account deficit (CAD), widened to 4 per cent of GDP in April-December 2011, up from 3.3 per cent a year ago.
• CAD is the difference between inflow and outflow of foreign exchange into the country.
• In its Macroeconomic and Monetary Developments in 2011-12 report, the RBI had on Monday said, “The policy design to achieve macro-objectives hinges on deregulation and the upward adjustment of oil prices by letting the demand effects work towards diminishing fiscal and external risks”.                                                                                                                            Tax issue: Vodafone issues notice to Centre.   
•  Vodafone on Tuesday threatened to drag the government to international arbitration over retrospective tax legislation under the bilateral investment treaty (BIT) between India and the Netherlands.
• Dutch subsidiary Vodafone International Holdings BV (VIHBV) on Tuesday severed a notice of dispute on the Indian government regarding proposals in the Finance Bill 2012 which it claimed violated the international legal protections granted Vodafone and other international investors in India.
• In a regulatory filing to the London Stock Exchange, Vodafone has asked the Indian government to abandon or suitably amend the retrospective aspects of the proposed legislation as Vodafone would prefer to reach an amicable solution to this matter.
• “However, if the Indian government is not willing to do so, Vodafone will take whatever steps are necessary to protect its shareholders’ interest, including investment treaty arbitration proceedings under the BIT against the Indian government,” the company said.
• In the Budget, the government announced a proposal to amend the Income Tax Act to bring overseas deals such as Vodafone’s purchase of Hutchison under tax net after the Supreme Court held that the UK firm was not liable to pay the Rs 11,000 crore in taxes.
• This is sought to be done through a retrospective amendment to the Income Tax Act which gives authorities powers to reopens cases as far back as 1962 under the Finance Bill 2012.The Vodafone statement said that the dispute arose from the retrospective tax legislation proposal which, if enacted, would have serious consequences for a wide range of Indian and international businesses, as well as direct and negative consequences for Vodafone.
• It said the proposed legislation would also countermand the verdict of the Supreme Court in January 2012, which ruled that Vodafone had no liability to account for withholding tax on its acquisition of indirect interests in Hutchison Essar Limited in 2007.
• Under the BIT, Vodafone said the Indian government is obliged among other things to accord fair and equitable treatment to investors, provide full protection and security, not breach the legitimate expectations of investors in making investments, not deny justice or breach previously provided assurances and not take steps to indirectly expropriate the investment.
• The statement said Vodafone believes that the retrospective tax proposal amount to a denial of justice and a breach of the Indian government’s obligation under the BIT to accord fair and equitable treatment to investors.                                                                                             ‘Adarsh land belongs to govt., not Army’ ,Court says.  
•  In a huge relief to the Maharashtra government, the judicial commission of inquiry looking into the Adarsh housing scam has held that the land on which the controversial building stands belongs to the State and not the Army.
• The two-member panel, which had submitted its interim report to the government last Friday, has also held that the building was not reserved for war heroes and Kargil widows.
• The interim report was discussed by the Maharashtra Cabinet on Tuesday, sources close to the development said, adding it is likely to be tabled in the legislature later in the day.
• The commission headed by former Bombay High Court judge J.A. Patil includes former State Chief Secretary P. Subramanian.
• The report, according to sources, has thrown light on the issues of ownership of the land on which the 31-storey high-rise stands in upscale Colaba, and if it was reserved for war heroes and Kargil widows.
• The allegations in the case are that the land was allotted by the State government to the Adarsh Society though it belonged to the Defence Ministry, and the building came up in violation of several civic and environmental norms.
• The State government had approached the commission a few months ago seeking an interim report on the points of title and reservation.
• The Maharashtra government had appointed the two-member panel to probe the Adarsh Society scam in January 2011.
• The panel has been tasked with probing all aspects of the scam, including ownership of the land and allotment, as well as alleged violations of rules in grant of various clearances to the building. The commission is also looking into violation of coastal zone regulations.
• A number of top civil and army officials and politicians, including former chief Minister Ashok Chavan, are alleged to have facilitated clearances for the building and got flats in it as quid pro quo.
• Nine of the 14 accused, including two senior IAS officers, have been arrested for their alleged involvement in the scam.                                                                                                  Upgraded Aakash tablet to be launched next month: Sibal.     
• A faster and enhanced version of low-cost tablet PC, Aakash, would be launched next month, Telecom Minister Kapil Sibal said on Tuesday.The second version of Aakash will be launched in May,” Mr. Sibal told reporters on the sidelines of World IT forum 2012 in New Delhi.
• The tablet will be produced domestically, and in this regard the government is talking to various manufacturers from across the world.After freezing the technology, we will start manufacturing it. We are calling people from across the world to manufacture it and some people have shown interest,” Mr. Sibal said.
• The new tablet would have a better 3200m AH battery with a three-hour backup, a 700 MHz Cortex A8 processor and a capacitive touch screen which would get over the earlier issues observed in the tablets, Mr. Sibal had said earlier.
• Recently, Datawind, the maker of Aakash, and Quad Electronics, which is the contract manufacturer of the tablet, have been trading charges against each other.Quad has said it has not been paid for its work by the tablet maker alleging the letter of credit issued by Datawind was dishonoured and it has not received any payment for its work.
• However, Datawind has been claiming that all the payments that was due to Quad have been cleared, except for the 600 units that remain unpaid by IIT-Rajasthan.
• Opinion  :-Three Cheers to Parliament
•                   Give The Professor a Raise

MAJOR GOVT. PROGRAMMES AND POLICIES

MAJOR GOVT. PROGRAMMES AND POLICIES

Rashtriya Swasthya Bima Yojana


•For BPL, unorganized sector.

•Oct 1, 2007.

•Smart card base Careless insurance cover.

•Rs 30,000/- per annum per family.

•Beneficiary would Pay Rs 30/- per annum as registration/renewal fee

•75 : 25 Rest of Idia.

•90 : 10 for N.E . & J.K

Rajiv Gandhi Shramik Kalyan Yojana

•1st April 2005

•It is an unemployment allowance to the insured person for a period of max 12 month.

•Also entitled to medical care of his/her family for a period of 12 month.

MNREGA

•Important by ministry of Rural Development.

•2 Feb, 2006.

•It guarantee wage employment.

•33% participation for women.

•Worker to obtain insurance under Jan Shree Bima Yojana of LIC.

Pradhan Mantri Sadak Yojana

•On 25th December 2000.

•500 person rural and 250 person Hilly, tribal and Desert area.

Bharat Nirman

•Pop. mome than 1000 in the plain area.

•500 or more in hilly and tribal area by 2009.

Indra Awas Yojana

•Important by ministry of Rural Development, since 1985-86.

•Provide financial assistant for construction/upgradation of dwelling unit.

•35,000/- in plain area, 38,500/- hilly area, 15,000/- upgradation of Kuchha house.

•75 : 25 basis.

Swarna Jayanti Gram Swarojgar Yojana

•1st April 1999.

•After restruction and merging of Integrated rural development programme.

•In 2009-2010, It was restructured as National Rural Livelihood mission.

Indra Gandhi National Widow Pension Scheme

•Started from 2009.

•Rs 200/- per month to BPL, widows in the age group of 40-64 years

Indra Gandhi National Disability Pension Scheme

•Rs 200/- per month

•BPL person.

•B/W age group 18-64 years.

National Rural Drinking Water Programme

•Implying by ministry of Rural Development

•National Drinking water mission introduced in 1986.

•1991- renamed as Rajiv Gandhi National Drinking Water Mission.

Central Rural Sanitation Programme

•1986 – launched

•Total Sanitation by- 2012. UN sponsored date – 2015.

•1999- Total Sanitation Campaign was launched under restructured Central Rural Sanitation programme.

•It is a demand driven programme.

National Social Assistance Programme

•In 1995.

•To lay foundation for social assistance for the poor.

•Art 41.

Indra Gandhi National Old Age Pension Scheme

•Launched in 2007.

•Rs 200/- per month per beneficiary provide by centre.

•60 years and higher of BPL.

•State were urged to contribute and then Rs. 200.

Annapurna Scheme

•Introduced in 2000

•Provide 10 kg of food grain per month free of cost.

•Given to those person who could not could not cover under National old age pension scheme.

National Family Benefit Scheme

•Rs 5000/- in case of natural death.

•Rs 10,000/- in case of accidental death.

•Provided to the family in case of death of primary bread winner of the family.

•Primary bread winner- 18 to 64 years of age.

Back ward Regions Grant Fund Programme

•Launched in Barpeta (Assam) in 2007.

•To addressing persistent regional imbalances in development.

•It Sum summer the Rashtiya Sam Vikas Yojana (administrate by Planning Commission)

Rashtriya Gram Swaraj Yojana

•Implemented by Ministry of Panchayati Raj.

•Implemented in the non Back ward Regions Grant Fund Programme districts.

•It provide Training and Capacity building of elected representatives and function of PRI.

Jawahar Lal Nehru National Urban Renewal Mission

•Launched 3rd December 2005.

•Fast track development of cities.

•Duration (5) year 2005-2006 to 2011-12.

National Urban Information System

•Launched 2006.

•To develop GIS database for 137 towns/cities in the country.

•It has two components-

- Urban spatial Information System Scheme

- National Urban Databank and Indicators.

FDI in Retail: To be or Not To be.

FDI in Retail: To be or Not To be.


The Union cabinet on 24 November 2011 approved 51 per cent foreign direct investment (FDI) in multi-brand retail. The Cabinet also decided to raise the cap on foreign investment in single-brand retailing to 100 per cent from 51 per cent. An estimated Rs 30-lakh-crore retail sector was thus opened to foreign investors by clearing a bill that allows 51 per cent investment in multi-brand retail.The decision being perceived as game-changer for the estimated USD 590 billion (Rs 29.50 lakh crore) retail market was taken at the meeting of the Cabinet presided over by Prime Minister Manmohan Singh.



India currently allows 51 percent foreign investment in single-brand retailers and 100 percent for wholesale operations but no FDI in multi-brand retail.

The major provisions for FDI investment include that the minimum investment will have to be $100 million. Retail stores will only be allowed in cities with more than one million people. Also it will be mandatory for retailers to source a minimum 30 per cent of the value of manufactured goods, barring food products, from small and medium enterprises. Investment up to 50 per cent will have to be in storage and back-end infrastructure. India being a signatory to World Trade Organisation’s General Agreement on Trade in Services, which include wholesale and retailing services, had to open up the retail trade sector to foreign investment. There were initial reservations towards opening up of retail sector arising from fear of job losses, procurement from international market, competition and loss of entrepreneurial opportunities. FDI in cash and carry or wholesale trade, was allowed way back in 1997 during the United Front Government. Foreign investment of up to 51 per cent in single brand retailing came to India in January 2006.



The Union government further asserted that 30 per cent sourcing under FDI in multi-brand retail has been made mandatory from Indian MSEs only. The government highlighted that the 30 per cent obligation before the global players is limited to India. The government’s explanation came amidst protests from the opposition and the micro and small enterprises (MSEs).According to government’s previous stand, the overseas players have to do 30 per cent of their sourcing from MSEs which, however, can be done from anywhere in the world and is not India-specific. The only condition placed was that these MSEs must not have more than $1 million [Rs.5 crore] investment in plant and machinery.



In 2004, The High Court of Delhi defined the term ‘retail’ as a sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale), A sale to the ultimate consumer. Thus, retailing can be said to be the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers Retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. A retailer is involved in the act of selling goods to the individual consumer at a margin of profit.

The retail industry is mainly divided into:- 1) Organised & 2) Unorganised Retailing Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. The Indian retail sector is highly fragmented with 97 per cent of its business being run by the unorganized retailers. The organized retail however is at a very nascent stage. The sector is the largest source of employment after agriculture, and has deep penetration into rural India generating more than 10 per cent of India’s GDP.



For those brands which adopt the franchising route as a matter of policy, the current FDI Policy will not make any difference. They would have preferred that the Government liberalize rules for maximizing their royalty and franchise fees. They must still rely on innovative structuring of franchise arrangements to maximize their returns. Consumer durable majors such as LG and Samsung, which have exclusive franchisee owned stores, are unlikely to shift from the preferred route right away. For those companies which choose to adopt the route of 51% partnership, they must tie up with a local partner. The key is finding a partner which is reliable and who can also teach a trick or two about the domestic market and the Indian consumer.



Positive Aspects

FDI can be a powerful catalyst to spur competition in the retail industry, due to the current scenario of low competition and poor productivity. The policy of single-brand retail was adopted to allow Indian consumers access to foreign brands. Since Indians spend a lot of money shopping abroad, this policy enables them to spend the same money on the same goods in India. FDI in single-brand retailing was permitted in 2006, up to 51 per cent of ownership. Between then and May 2010, a total of 94 proposals have been received. Of these, 57 proposals have been approved. An FDI inflow of US$196.46 million under the category of single brand retailing was received between April 2006 and September 2010, comprising 0.16 per cent of the total FDI inflows during the period. Retail stocks rose by as much as 5%. Shares of Pantaloon Retail (India) Ltd ended 4.84% up at Rs 441 on the Bombay Stock Exchange. Shares of Shopper’s Stop Ltd rose 2.02% and Trent Ltd, 3.19%. The exchange’s key index rose 173.04 points, or 0.99%, to 17,614.48. But this is very less as compared to what it would have been had FDI upto 100% been allowed in India for single brand. The policy of allowing 100% FDI in single brand retail can benefit both the foreign retailer and the Indian partner – foreign players get local market knowledge, while Indian companies can access global best management practices, designs and technological knowhow. By partially opening this sector, the government was able to reduce the pressure from its trading partners in bilateral/ multilateral negotiations and could demonstrate India’s intentions in liberalising this sector in a phased manner.



Permitting foreign investment in food-based retailing is likely to ensure adequate flow of capital into the country & its productive use, in a manner likely to promote the welfare of all sections of society, particularly farmers and consumers. It would also help bring about improvements in farmer income & agricultural growth and assist in lowering consumer prices inflation. Apart from this, by allowing FDI in retail trade, India will significantly flourish in terms of quality standards and consumer expectations, since the inflow of FDI in retail sector is bound to pull up the quality standards and cost-competitiveness of Indian producers in all the segments. It is therefore obvious that we should not only permit but encourage FDI in retail trade.Lastly, it is to be noted that the Indian Council of Research in International Economic Relations (ICRIER), a premier economic think tank of the country, which was appointed to look into the impact of BIG capital in the retail sector, has projected the worth of Indian retail sector to reach $496 billion by 2011-12 and ICRIER has also come to conclusion that investment of ‘big’ money (large corporates and FDI) in the retail sector would in the long run not harm interests of small, traditional, retailers. In light of the above, it can be safely concluded that allowing healthy FDI in the retail sector would not only lead to a substantial surge in the country’s GDP and overall economic development, but would inter alia also help in integrating the Indian retail market with that of the global retail market in addition to providing not just employment but a better paying employment, which the unorganized sector (kirana and other small time retailing shops) have undoubtedly failed to provide to the masses employed in them.



Concerns

It is feared that, it would lead to unfair competition and ultimately result in large-scale exit of domestic retailers, especially the small family managed outlets, leading to large scale displacement of persons employed in the retail sector. Further, as the manufacturing sector has not been growing fast enough, the persons displaced from the retail sector would not be absorbed there. Another concern is that the Indian retail sector, particularly organized retail, is still under-developed and in a nascent stage and that, therefore, it is important that the domestic retail sector is allowed to grow and consolidate first, before opening this sector to foreign investors. Antagonists of FDI in retail sector oppose the same on various grounds, like, that the entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs, since the unorganized retail sector employs an enormous percentage of Indian population after the agriculture sector; secondly that the global retailers would conspire and exercise monopolistic power to raise prices and monopolistic (big buying) power to reduce the prices received by the suppliers; thirdly, it would lead to asymmetrical growth in cities, causing discontent and social tension elsewhere. Hence, both the consumers and the suppliers would lose, while the profit margins of such retail chains would go up.



Argument that only foreign players can create the supply chain for farm produce is bogus. International retail players have no role in building roads or generating power. They are only required to create storage facilities and cold chains. This could be done by governments in India. Move will lead to large-scale job losses. International experience shows supermarkets invariably displace small retailers. Small retail has virtually been wiped out in developed countries like the US and in Europe. South East Asian countries had to impose stringent zoning and licensing regulations to restrict growth of supermarkets after small retailers were getting displaced. Fragmented markets give larger options to consumers. Consolidated markets make the consumer captive. Allowing foreign players with deep pockets leads to consolidation. International retail does not create additional markets, it merely displaces existing markets. India has the highest shopping density in the world with 11 shops per 1,000 people. It has 1.2 crore shops employing over 4 crore people; 95% of these are small shops run by self-employed people. Global retail giants will resort to predatory pricing to create monopoly/oligopoly. This can result in essentials, including food supplies, being controlled by foreign organizations. Jobs in the manufacturing sector will be lost because structured international retail makes purchases internationally and not from domestic sources. This has been the experience of most countries which have allowed FDI in retail. Comparison between India and China is misplaced. China is predominantly a manufacturing economy. It's the largest supplier to Wal-Mart and other international majors. It obviously cannot say no to these chains opening stores in China when it is a global supplier to them. India in contrast will lose both manufacturing and services jobs.



Conclusion

Conclusively we can say that FDI in retail has the both positive as well as negative aspects of it ,but what we should consider before jumping on any conclusion that fears of small shopkeepers getting displaced are vastly exaggerated. When domestic majors were allowed to invest in retail, both supermarket chains and neighbourhood pop-and-mom stores coexisted. If anything, the entry of retail big boys is likely to hot up competition, giving consumers a better deal, both in prices and choices. Mega retail chains need to keep price points low and attractive - that's the USP of their business. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn. The argument that farmers will suffer once global retail has developed a virtual monopoly is also weak. To begin with, it's very unlikely that global retail will ever become monopolies. Stores like Wal-Mart or Tesco are by definition few, on the outskirts of cities (to keep real estate costs low), and can't intrude into the territory of local kiranas. So, they can not eat up their share of pie. Secondly, it can't be anyone's case that farmers are getting a good deal right now. The fact is that farmers barely subsist while middlemen take the cream. Let's not get dreamy about this unequal relationship.

Budget 2012-13: Reality Check

Budget 2012-13: Reality Check

The Union Budget 2012-13 presented by the Finance Minister Pranab Mukherjee in Lok Sabha on 16thMarch, identified five objectives to be addressed effectively in the ensuing fiscal year. They include focus on domestic demand driven growth recovery; create conditions for rapid revival of high growth in private investment; address supply bottlenecks in agriculture, energy and transport sectors particularly in coal, power, National highways, railways and civil aviation; intervene decisively to address the problem of malnutrition especially in the 200 high-burden districts and expedite coordinated implementation of decisions being taken to improve delivery systems , governance, and transparency; and address the problem of black money and corruption in public life.

If the Union Budget was expected to make some special concessions for West Bengal to placate Chief Minister Mamata Banerjee, there was no hint of it in Finance Minister Pranab Mukherjee’s speech on Friday. Indeed, it was a speech singularly short of any political message; nor indeed, did it have a strong social message, as most of the schemes mentioned are already in place,with the government just making additional allocations. Perhaps,
the only social sector issue that Mr. Mukherjee highlighted in this fiscal year was to “intervene decisively to address the problem of malnutrition, especially in the 200high burden districts.”

Interestingly, that message appeared to have got across to the Trinamool  Congress. For despite the fact that West Bengal only got a flood management project in Murshidabad, a Congress-controlled district, and Rs. 50 crore to establish a world-class centre to improve water quality in Kolkata, the Trinamool  MPs seemed low key, describing the budget as “tolerable.” Of course, Trinamool Leader in the Lok Sabha Sudip Bandopadhyay did mention the fact that West Bengal, like Punjab and Kerala, was “in a debt trap” and wanted a three-year moratorium. But government sources told that the Centre had made it clear to all three States that it wanted to see some signs on the part of these State governments that additional funding “would not be like pouring water into a bucket with holes in it.”The message that the UPA government, evidently, wants to send out through this budget is that its focus will be on strengthening the economy, stimulating growth and on revenue generating measures. “If India can continue to build on its economic strength, it can be a source of stability for the world economy and provide a safe destination for restless global capital.” Probably the message of this budget: that the government intends to govern, and the allies need to get onboard.  Mukherjee said that India’s GDP growth in 2012-13 is expected to be 7.6 per cent +/-0.25 per cent. He said that in 2011-12, India’s GDP is estimated to grow at 6.9 per cent after having grown at the rate of 8.4 per cent in each of the two preceding years He said though the Global crisis had affected India, it still remains among the front runners in economic growth. Mukherjee said the slow down is primarily due to deceleration in industrial growth. Stating that the headline inflation remained high for most part of the year, the Finance Minister expressed hope that it will moderate further in the next few months and remain stable there after.FM laid emphasis on striking a balance between fiscal consolidation and strengthening macroeconomic fundamentals. He announced introduction of amendments to the Fiscal Responsibility and Budget Management Act, 2003 (FRBM Act) as part of the Finance Bill 2012. He said that concept of “Effective Revenue Deficit” and “Medium Term Expenditure Framework” statement are two important features of Amendment to FRBM Act in the direction of expenditure reforms. This statement shall set forth a three year rolling targets for expenditure indicators.

The FM called for a need to have a close look at the growth of revenue expenditure, particularly, on subsidies. He announced that from 2012-13 while subsidies related to food and for administering the Food Security Act will be fully provided for, all other subsidies would be funded to the extent that they can be borne by the economy without any adverse implications. He said that the Government will endeavor to restrict the expenditure on central subsidies under 2 per cent of GDP in 2012-13 and over the next three years, it would be further brought down to 1.75 per cent of GDP. Finance Minister said that based on recommendations of the Task Force headed by Nandan Nilekani, a mobile based Fertilizer Management System has been designed to provide end-to-end information on movement of fertilizers and subsidies which will be rolled out nation-wide during 2012. He said that transfer of subsidy to the retailer and eventually to the farmers will be implemented in subsequent phases which will benefit 12 crore farmer families. On the tax reforms,the Finance Minister said that the Direct Taxes Code (DTC) Bill will be enacted at the earliest after expeditious examination of the report of the Parliamentary Standing Committee.

He said drafting of model legislation for Centre and State Goods and Services Tax (GST) in concert with States is under progress. He added that the GST network will be set up as a National Information Utility and will become operational by August 2012. On the disinvestment policy, FM said that the Central Public Sector Enterprises (CPSEs) are being given a level playing field vis-à-vis private sector with regard to practices like buy- acks  and listing at stock exchange. Stating that while in 2011-12, the Government will raise about Rs 14,000 crore from disinvestment as against a target of Rs 40,000 crore, the Finance Minister proposed to raise Rs 30,000 crore through disinvestment in 2012-13.He said at least 51 per cent ownership and management of CPSEs will remain with the government. Calling for strengthening investment environment, FM said that efforts are on to arrive at a broad-based consensus in respect of decision to allow FDI in multi-brand retail up to 51 per cent. He proposed to introduce a new scheme called Rajiv Gandhi Equity Savings Scheme to allow for income tax deduction of 50 per cent to new retail investors who invest up to Rs 50,000 directly in equities and whose annual income is below Rs 10 lakh. The scheme will have a lock-in period of 3 years Regarding capital markets, the Finance Minister proposed to allow Qualified Foreign Investors (QFIs)to access Indian Corporate Bond market. He also proposed simplifying the process of Initial Public Offer (IPO).

The FM said that the government is committed to protect the financial health of Public Sector Banks and Financial Institutions. He proposed to provide Rs 15,888 crore for capitalization of Public Sector Banks, Regional Rural Banks and other financial institutions including NABARD. He added that a Central Know Your Customer (KYC) depositary will be developed in 2012-13 to avoid multiplicity of registration and data upkeep. The Finance Minister informed that out of 73,000 identified habitations that were to be covered under “Swabhimaan” campaign for providing banking facilities by March 2012, about 70,000 habitations have been covered while the rest are likely to be covered by March 31, 2012.He added that as a next step Ultra Small Branches are being set up at these habitations. In 2012-13, Swabhimaan campaign will be extended to more habitations. Emphasizing on infrastructure and industrial development, Mukherjee said that during the12th Plan, infrastructure investment will go up to Rs 50 lakh crore with half of this expected from private sector. Stating that in 2011-12 tax free bonds for Rs 30,000 crore were announced for financing infrastructure projects, he proposed to double it to raise Rs 60,000 crore  in 2012-13. TheMinister proposed to allow External Commercial Borrowings (ECB) to part finance Rupee debt of existing power projects.

The FinanceMinister announced a target of covering 8,800 km. under NHDP next year andincrease in allocation of the Road Transport and Highways Ministry by14 per cent to Rs 25,360 crore in 2012-13. He proposed to permit ECB for working capital requirements of the Airline Industry for a period of one year, subject to a total ceiling of US dollar 1 billion to address the immediate financial concerns of the Civil Aviation Sector. He added that a proposal to allow foreign airlines to participate upto 49 per cent in the equity of an air transport undertaking is under active consideration. Expressing concern over shortage in housing sector, the FinanceMinister proposed various measures to address the shortage of housing for low income groups in major cities and towns including ECB for low cost housing projects and setting up of a Credit Guarantee Trust Fund. Regarding textile sector, the FinanceMinister announced setting up of twomoremega clusters, one to cover Prakasamand Guntur districts in Andhra Pradeshand other for Godda and neighboring districts in Jharkhand in addition to 4 mega handloom clusters already operationalized. He also proposed setting up of three Weavers Service Centres, one each in Mizoram, Nagaland and Jharkhand. The Minister proposed a Rs 500 crore  pilot scheme in twelfth plan for promotion and application of Geo-textiles in the North East. A powerloom Mega Cluster will be set up in Ichalkaranji in Maharashtra.FM proposed to set up a Rs 5000 crore India Opportunities Venture Fund with SIDBI to enhance availability of equity tomicro, small and medium enterprises. Stating that agriculture will continue to be a priority for the government, Mukherjee proposed an increase by 18 per cent to Rs 20,208 crore in the total Plan Outlay for the Department of Agriculture and Cooperation in 2012-13.He said that the outlay for Rashtriya Krishi Vikas Yojana (RKVY) is being increased to Rs 9217crore in 2012-13.

Underlining importance of timely access to affordable credit for farmers, the Finance Minister proposed to raise the target for agricultural credit to Rs 5,75,000 crore, which represents an increase of Rs 1,00,000 crore over the target for  the current year. He said that a short term RRB Credit Refinance Fund is being set up to enhance the capacity of Regional Rural Banks to disburse short term crop loans to the small and marginal farme Rs Headdedthat Kisan Credit Card Scheme will be modified to make it a smart card which can be used at ATMs. The Financed Minister said that in order to have a better out reach of the food processing sector, a new centrally sponsored scheme titled National Mission on Food Processing will be started in cooperation with the States in 2012-13.Minister proposed an increase of 18 per cent to Rs 37,113crore for Scheduled Castes Sub Plan and an increase of 17.6 per cent to Rs 21,710 crore for Tribal Sub Plan during 2012- 13. Regarding food security, Mukherjee said that National Food Security Bill 2011 is before Parliamentary Standing Committee. He said a multi-sectoral programme to address maternal and child malnutrition in selected 200 high burdened districts is being rolled out during 2012-13. He further said that an allocation of Rs 15,850 crore has been made for ICDS scheme which is an increase of 58% and Rs 11,937 crore for National Programme of Mid-Day Meals in schools for the year 2012-13.He added that an allocation of Rs 750 crore is proposed for Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, SABLA.

The allocation for rural drinking water and sanitation is proposed to be increased by over 27 per cent toRs 14,000 crore and for Pradhan Mantri Road Sadak Yojana by 20 per cent to Rs 24,000 crore in 2012-13. He proposed to enhance the allocation under Rural Infrastructure Development Fund to Rs 20,000 crore with Rs 5,000 crore exclusively earmarked for .creating warehousing facilities. The Finance Minister proposed an increase in allocation by 21.7 per cent for Right to Education – Sarva Shiksha Abhiyan to Rs 25,555 crore and by 29 per cent for Rashtriya Madhyamik  Shiksha Abhiyan to Rs 3,124 crore. He proposed to set up a CreditGuarantee Fund to ensure better flow of funds to students. Regarding health sector he proposed an increase in allocation for NRHM to Rs 20,822 crore in 2012-13. He also said that National Urban Health Missionis being launched.

The Finance Minister said that Mahatma Gandhi National Rural Employment Guarantee Scheme has had a positive impact. He proposed an allocation of Rs 3915 crore for National Rural Livelihood Mission (NRLM)which represents an increase of 34 per cent. He proposed to provide Rs 200 crore to enlarge the corpus to Rs 300 crore of the Women’s SHG’s Development Fund. He said the fund will also support the objectives of Aajeevikai. e. NRLM and will empower women SHGs to access bank credit. He also proposed to establish a Bharat Livelihoods Foundation of India through Aajeevika which will support and scale up civil society initiatives and interventions particularly in the tribal regions covering around 170 districts.

Allocation under National Social Assistance Programme  (NSAP) is proposed to be raised by 37 per cent to Rs 8447 crore. Under the Indira Gandhi National Widow Pension Scheme and Indira Gandhi National Disability Pension Scheme for BPL beneficiaries, the monthly pension amount per person is being raised from Rs 200 to Rs 300. FM announced a provision of Rs 1,93,407crore for Defence Services including Rs 79,579 crore for capital expenditure. He said the allocation is based on present needs and any further requirement would be met. Addressing governance related issues, Mukherjee said adequate funds are proposed to be allocated to complete enrollments of another 40 crore persons under UID Mission. Outlining the steps taken by the Government to address the issue of black money, the Minister proposed to lay a White Paper on Black Money in the current session of Parliament. In the Budget estimates for 2012-13, the Gross Tax Receipts are estimated at Rs 10, 77,612 crore which is an increase of 15.6 per cent over the Budget Estimates and 19.5 per cent over the revised estimates for 2011-12. After devolution to States, the net tax to the Centre in 2012-13 is estimated at Rs 7,71,071crore. The Non Tax Revenue Receipts are estimated at Rs 1,64,614crore and Non debt Capital Receipts at Rs 41,650 crore. The total expenditure for 2012-13 is budgeted at Rs 14,90,925 crore. Of this Rs 5,21,025crore is the Plan Expenditure while Rs 9,69,900 crore is budget edas Non Plan Expenditure. The tax proposals are guided by the need to move towards the Direct Tax Code(DTC) in the case of direct taxes and Goods & Services Tax

(GST) in the case of indirect taxes. Individual income up to Rs 2 lakh will be free from income tax; income uptoRs 1.8 lakh was exempt in 2011-12. Income above Rs 5 lakh and upto Rs 10 lakh now carries tax at the rate of 20 per cent; the 20% tax slab was from Rs 5 lakh to Rs 8 lakh in 2011-12. A deduction of up to Rs 10,000 is now available for interest from savings bank accounts. Within the existing limit for deduction allowed for health insurance, a deduction of up to Rs 5000 is being allowed for preventive health check-up. Senior citizens not having income from business will now not need to pay advance tax.

While no changes have been made in corporate taxes, the budget proposes a number of measures to promote investment in specific sectors. In order to provide low cost funds to some stressed infrastructure sectors, withholding tax on interest pay mentson external borrowings (ECBs) is being reduced from20 percent to 5 per cent for 3 years. These sectors are – power, airlines, roads and bridges, ports and shipyards, affordable housing, fertilizer, and dam. Investment linked deduction of capital expenditure in some businesses is proposed to be provided at 150 per cent as against the current rate of 100 per cent. These sectors include cold chain facility, warehouses for storing food grain, hospitals, fertilizers and affordable housing. Bee keeping, container freight and warehousing for storage of sugar will now also be eligible for investment linked deduction. The budget also proposes weighted deduction for R&D expenditure, agri-extension services and expenditure on skill development in the manufacturing sector. For small and medium enterprises (SMEs)the turnover limit for compulsory tax audit of accounts as well as for presumptive taxation is proposed to be raised from Rs 60 lakh to Rs 1 crore. In order to augment funds for SMEs, sale of residential property will be exempt from capital gains tax, if the proceeds are used for purchase of plant and machinery, etc. A General Anti-Avoidance Rule (GAAR) is being introduced in order to counter aggressive tax avoidance. Securities transaction tax (STT) is being reduced by 20 per cent on cash delivery transactions, from 0.125% to 0.1%. Alternative Minimum Tax is proposed to be levied from all persons, other than companies, claiming profit linked deductions.

The Finance Minister has proposed a series of measures to deter the generation and use of unaccounted money. In the case of assets held abroad, compulsory reporting is being introduced and assessment up to 16 years will now be allowed to be re-opened. Tax will be collected at source on trading in coal, lignite and iron ore; purchase of bullion or jewellery above Rs 2 lakh in cash; and transfer of immovable property (other than agricultural land) above a specified threshold. Unexplained money, credits, investments, expenditures etc. will be taxed at the highest rate of 30 per cent irrespective of the slab of income. The Finance Minister has made an effort to widen the service tax base, strengthen its enforcement and bring it as close as possible to the central excise. A common simplified registration form and a common return are being introduced for central excise and service tax. All services will now attract service tax, except those in the negative list. The negative list has 17 heads and includes specified services provided by the government or local authorities, and services in the fields of education, renting of residential dwellings, entertainment and amusement ,public transportation, agriculture and animal husbandry. A number of other services including health care, and services provided by charities, independent journalist, sport persons, performing artists in folk and classical arts, etc are exempt from service tax. Film industry also gets tax exemption on copyrights relating to recording of cinematographic films. Service tax rate is being increased from 10 per cent to 12 per cent, with consequential change in rates for services that have individual tax rates. The standard rate of excise duty for non-petroleum goods is also being raised from 10 per cent to 12 per cent. No change is proposed in peak rate of customs duty of 10 per cent on nonagricultural goods.

The Budget offers relief to different sectors of economy, especially those under stress. Import of equipment for fertilizer projects are being fully exempted from basic customs duty of 5 per cent for 3 years Basic customs duty is also being lowered for a number of equipment used in agriculture and related areas. In the realm of infrastructure, customs relief is being given to power, coal and railways sectors while steam coal gets full customs duty exemption for 2 years (with the concessional counter veiling duty of 1 per cent), natural gas, LNG and certain uranium fuel get full duty exemption this year. Different levels of duty concessions are being provided to help mining, railways, roads, civil aviation, manufacturing, health and nutrition and environment. So as to help modernization of the textile industry, a number of equipment are being fully exempted from basic customs duty, and lower customs duty is being proposed for some other items used by the textile industry.

Customs duty is being raised for gold bars and coins of certain categories, platinumand gold ore. Customs duty is to be imposed on coloured gem stones. Excise duty on certain categories of cigarettes and bidis, pan masala and chewing tobacco is being increased. Customs duty is being increased on completely built largecars/ SUVs/MUVs of value exceeding $40,000. Silver jewellery will now be fully exempt from excise duty. Unbranded precious metal jewellery will attract excise duty on the lines of branded jewellery. Operations are being simplified and measures taken to minimize impact of this provision on small artisans and goldsmiths. While direct tax proposals in the Budget will result in a net revenue loss of Rs 4,500crore, indirect taxes will result in a net revenue gain of Rs 45,940 crore. Thus, the tax proposals will lead to a net gain of Rs 41,440crore.

HIGHLIGHTS OF BUDGET :

·  Cars to attract ad valorem rate of 27 per cent.

·  Upper limit raised from Rs 8 lakh to Rs 10 lakh for 20 per cent bracket

·  Individual income tax payer exemption limit to be raised to Rs 200,000 from Rs 180,000.

·  Capital gains tax on residential property exempted if sale proceeds used for SMEs.

·  Customs duty on bicycles and parts increased

·  Customs duty on standard gold bar and coins exceeding 99.5 per cent purity, platinum and non-standard gold raised

·  Import duty on large cars, MUVs, SUVs enhanced

·  Gold jewellery not bearing brand name to be included in the one per cent levy on precious metal jewellery

·  Branded silver jewellery fully exempted from excise duty

·  Baggage allowance for people of Indian origin increased from Rs 25,000 to Rs 35,000 and for children from Rs 12,000 toRs 15,000

·  Customs and central excise proposals to net a revenue of Rs 27,280 crore

·  Installation of solar plants exempted from CVD.

·  Oil cess on domestic crude raised to Rs 4,500 per ton from Rs 2,500 per ton.

·  Standard excise duty rate raised from 10 per cent to 12 per cent.

·  Service tax to yield additional revenue of Rs 18,650 crore.

·  No change in the peak rate customs duty.

·  Full exemption from basic customs duty on natural gas, LNG, uranium for generation of electricity for two years.

·  Import of equipment for fertilizer plants fully exempt from customs duty for three years

·  Full exemption from basic customs duty for equipment for road and highway construction

·  Customs duty on import of parts of aircraft, tyres andtesting equipment fully exempted.

·  Excise duty on handmade and semi mechanised matches reduced from 10 to 6 per cent

·  Introduction of compulsory reporting of assets held abroad.

·  Securities Transaction Tax (STT) reduced from 0.125 per cent to 0.1 per cent.

·  Withholding tax on power, airlines, road and brides, ports and shipyard, fertilisers, dams and affordable houses lowered to 5 pc from 20 pc for 3 years.

·  No change in corporate tax rate.

·  The Budget also exempts up to Rs 10,000 of interest income from tax.

·  No IT for income up toRs 2,00,000; 10 pc on income between Rs 2-5 lakh; 20 pc on income between Rs 5-10 lakh and 30 pc on income above Rs 10 lakh.

·  Tax exemption of up toRs 5,000 for health insurance for annual preventive health checkup

·  Direct taxes proposals to result in net revenue loss of Rs 4,500 crore.

·  All services except 17 in the negative list to be brought under service tax net.

·  Copyright relating to cinematography in film industry exempted fromservice tax

·  Team to study common tax code for service tax and central excise to be set up

·  No change in the peak rate customs duty

·  Service tax to yield additional revenue of Rs 18,650 crore.

·  Standard excise duty rate raised from 10 per cent to 12 per cent.

·  Determined to bring down fiscal deficit to 5.1 per cent of GDP next fiscal

·  Total debt of the Centre will be 45 per cent of GDP

·  Revenue deficit for 2012-13 projected at Rs 1,85,752 crore.

·  Non-plan expenditure Rs 9,69,900 crore in 2012-13; 8.7 per cent higher than current year

·  Direct tax collection fell short by Rs 32,000 crore  in current fiscal.

·  Fiscal deficit at 5.9 per cent of GDP in revised estimates for 2011-12.

·  Determined to bring down fiscal deficit to 5.1 per cent of GDP next fiscal.

·  Urban health schemes get higher allocation.

·  40 crore Aadhar enrollment in year beginning April 2012.

·  White Paper on black money to be tabled in current session of Parliament.