BLOT FROM THE BLUE

The most awaited budget of financial year 2011-2012 was presented by Finance Minister Mr.Pranab Mukherjee on 28^th of February. The entire nation had very high expectation from this budget as it is the time when the nation is fighting with herculean task like inflation, unemployment, fiscal deficit. At this period the whole nation was envisaging something additional to address these tribulations. Budget was on tenterhooks till it was not presented but now all the clouds of expectations have been cleared.

According to well known personalities of corporate sectors like ICICI Bank Managing Director and Chief Executive Chandra Kochhar “the budget is development oriented as it offers range of growth promoting initiatives.”

This budget has given much alleviation to corporate sector such as:

ü     Allocation of Rs 2,14,000for infrastructure in 2011-2012,an increase of 23.3% over 2010-11.

ü    Excise duty to be reduced from 10% to 15% on parts specified machinery.

ü    Surcharge for companies cut to 5% from 75%.

ü    Special incentives for hybrid vehicle makers if manufacturing done in India to be positive for auto companies.

ü    Crude palm is used exempted from custom duty to be positive for palm oil companies.

ü    Duty reduction hybrid electric cars along with batteries imported for such vehicles.

ü    No import duty ships parts for SCI.

ü    Liberalization of foreign institutional investment (FII) in equity mutual funds.

But there were some wholesome steps too like:

ü    Rate of MAT proposed to be increased from 18% to 18.5% of book profit.

ü    Lower rate Central Excise Duty enhanced from 4% to 4.5%.

These provisions given in the budget will surely enhance the economic growth; mobilize the significant amount of capital and expertise in India’s financial capital market.

          Finance Minister has pointed out “the massive inefficiencies in India’s Agricultural supply chains” in his Budget, remarking that “high cost hurts rural farmers most.”

This time after many years budget had played a trump card by giving incentives to farmers as:

ü    Basic custom duty on agricultural machinery reduced to 4.5% to 5%.

ü    Making farmers indirect beneficiaries.

ü    Interest subvention proposed to be enhanced from 2% to 3% for providing short-term crop loans to farmers who repay their crop loan on time.

The steps taken by Mr.Mukherjee are not sufficient more could have been done in this respect. Government can open shops in every village where farmers could get fertilizers, HYV seeds and machineries at subsidized rate. Government should all do facilitate the villages for irrigation where water level is very low. This will reduce the problem of inflation to certain extent as when farmers will get good facilities easily then this will in turn increase the production, which will balance the demand and supply conditions of food items in the market. In this way inflation could be tackled to some extent.

         

         Budget has done allocation for education:

ü    Allocation for Sarvashiksha Abhiyaan is increased by40% to Rs 21,000 crore.

ü    Allocation for education is increased by 24% over years.

Despite of crores of allocation this problem will not be solved until and unless this money utilized properly.

           

 To middle classes, salaried and others this Budget offers no cheers. The nominal increase of tax exemption from Rs 1,60,000 to Rs 1,80,000 at best , brings Rs 2000 per year tax rebate to this category. This is more than offset by the inflation rise in food prices, etc.

      

      

 Other provisions made in this budget are:

ü    AC restaurants serving liquor and to come under service tax.

ü    Health check-ups in private hospitals, computer, laptop, branded readymade garments, branded gold, C.D., lodging in hotels, stationeries, flavored milk, coffee-tea to become expensive.

ü    Fair of air journey to become expensive, Passengers have to pay Rs 50 more on national flight and Rs 250 on international flight.

 It is heartless Budget as finance minister has not zeroed in on common people who are integral part of nation and play a major role in development of nation. Populous is upset as health check-ups in private hospital have become expensive which is the basic necessity. Budget has taken away all comforts of common man as he travelling by air has become difficult; one has to think hundred times before purchasing branded clothes and enjoying food at A.C. restaurants. Stationeries have also become expensive. From last few months the prices of petrol, diesel, and food items were increased rapidly and in this situation this budget has done work of adding fuel to fire.

   Some changes are needed like some scheme for service class so that they can do some savings for future and for eradication of unemployment, etc. so that the dream of becoming a prosperous, developed and powerful nation may come true. 

Mariam Sohail

Student

B.A in Media Studies

University of Allahabad