New Delhi, February 28
The Budget has more than doubled the allocation for the judiciary at Rs 1,432 crore, with much of the hike going for augmenting infrastructural facilities and computerisation of district and subordinate courts. The allocation was Rs 687.19 crore in the Budget last year.

However, there will be no Central funding for fast-track courts (FTCs) from April 1, the 2011-12 Budget presented by Finance Ministry Pranab Mukherjee shows. Budget 2010-11 had a provision of Rs 75 crore for FTCs.

The allocation for infrastructure has gone up more than four-fold, from Rs 95 crore in the current financial year to Rs 427.90 crore in the coming fiscal. The Budget proposes to raise the allocation for computerisation by about 1.5 times, from Rs 108 crore now to Rs 267 crore.

Assistance to state governments for establishing and operating Gram Nyayalayas will see a near four-fold increase, from Rs 39 crore to Rs 145 crore. A significantly higher outlay has been made for providing legal aid to the poor through the National Legal Services Authority. It goes up from Rs 41.79 crore to Rs 66.31 crore.

For conducting studies on judicial reforms, the allocation goes up marginally, from Rs 2.43 crore to Rs 2.53 crore. For family courts, the outlay has been raised from Rs 2 crore to Rs 5 crore.

The Supreme Court gets a separate allocation in the Budget. The allocation in Budget 2011-12 is proposed at Rs 95.22 crore, up from Rs 85 crore in the current fiscal.

The allocation for the SC would cover salaries and travel expenses of the Chief Justice and other judges, staff and officers of the Registry, including the departmental canteen, charges for professional service towards personnel deployed for security and expenditure on establishment-related needs, including stationery, office and security equipment and maintenance of CCTV, the Budget document clarified.

In his Budget speech in Parliament, Mukherjee said, “I propose to expand the scope of legal services to include services provided by business entities to individuals as well as representational and arbitration services by individuals to business entities. There shall, however, be no tax on services provided by individuals to other individuals.” 

New Delhi, February 28
The actual collection of service tax does not reflect the full potential of this sector. While retaining the standard rate of service tax at 10 per cent, the finance minister seeks to achieve a closer fit between the present service tax regime and its GST successor by bringing in a few new services into the tax net to expand the tax base while ensuring that the impact is predominantly on sections of society that have the ability to pay.

The FM has proposed to levy service tax on the following new services: Hotel accommodation, in excess of declared tariff of Rs 1,000 per day with an abatement of 50 per cent so that the effective burden is only 5 per cent of the amount charged.

Service provided by air-conditioned restaurants that have licence to serve liquor, by giving an abatement of 70 per cent. Thus, the effective burden will be 3 per cent of the bill.

The finance minister has proposed to levy tax on all services provided by hospitals with 25 or more beds that have the facility of central air-conditioning.

Though the tax is on high- end treatment, the finance minister has proposed to sweeten the pill by an abatement of 50 per cent so that the actual burden is kept at 5 per cent of the value of service. A service tax of Rs 50 in case of domestic air travel and Rs 250 on international journeys by economy class has also been imposed. The proposals relating to service tax are estimated to result in a net revenue gain of Rs 4,000 crore for the year. — TNS

New Delhi, February 28
The government today promised to resolve vexed environmental issues in a time-bound manner and provided for the Environment Ministry a minor increase in the Budget, taking the allocation up to Rs 2,491.97 crore from Rs 2,385.52 crore in the financial year 2010-11.

The Finance Minister has put on the table Rs 200 crore for the National Clean Energy Fund (NCEF) for protection of forests. It will get additional Rs 200 for launching remedial measures. The Budget has provided another Rs 200 crore for cleaning “many rivers and lakes of cultural and historical significance”.

Additional green efforts come in the form of concessions to environment-friendly items. The government will also launch the National Mission for Hybrid and Electric Vehicles in collaboration with stakeholders to provide green and clean transportation for the masses.

The Finance Minister has given tax exemptions to hybrid and electric vehicles, LED bulbs and fixtures and solar lanterns. This, environmentalists are terming as the only bright spot in a Budget that otherwise is a “complete let-down from the environment point of view”.

Full exemption from basic customs duty and a concessional rate of central excise duty has been provided for batteries imported by manufacturers of electric vehicles. The excise duty on kits used for conversion of fossil fuel vehicles into hybrid vehicles has also been reduced.

A concessional excise duty of 10 per cent has also been proposed for vehicles based on fuel-cell technology. Full exemption from customs duty is being extended to toughened glass and silver paste imported for the manufacturers of solar cells or solar modules on actual-user basis.

CSE’s Chandra Bhushan says despite having money, the Finance Minister did not give anything for clean energy development. “Last year, the government collected Rs 3,000 crore by taxing coal that was to be used for clean energy development, renewable energy and clean technology. In this Budget, the Finance Minister has taken Rs 400 crore from this money and given it the NCEF for planting trees and other remedial measures,” he explains.

As per Chandra Bhushan, the Budget is a complete let-down from the environment point of view. “While the Finance Minister talked of sustainable agricultural mission in his Budget speech, he has not put any money on the table. He has also not increased taxes on SUVs and diesel cars, misutlising the diesel subsidy,” he adds. 

New Delhi, February 28
The Finance Minister on Monday said his Budget proposals address the problem of high inflation and give a push to economic reforms.

"I had to place the Budget in a situation where there is uncertainty in the international world (and) high food inflation - though in terms of percentage it has come down from 20.2 to 9.3 - but still it is unacceptable level," he told reporters after unveiling the Budget for 2011-12 in the Lok Sabha.

Through the Budget proposals, Mukherjee added, he also tried to signal reforms without making any dramatic announcements.

"I wanted to convey a strong signal towards reforms ... reforms not in dramatic announcements but (by) addressing those issues (which can improve) governance and delivery," Mukherjee said.

Referring to rising inflation, the minister said, he tried to address the problem by allocating resources and come out with schemes to augment supplies of pulses and edible oil.

"We have taken special programmes - about six-seven programmes - to be implemented under Rashtriya Krishi Vikas Yojna. I have allocated resources and schemes are being worked out for pulses, edible oil, providing fodder for the cattle, green revolution in Eastern India.

To check high prices, he said, "we have to remove the supply bottlenecks and therefore the agriculture response should be to improve the supply bottlenecks".

The minister further said that use of information technology in dealing with issues concerning income tax would "bring revolutionary changes in the tax compliance, tax administration".

The Budget, Mukherjee said, also sought to move ahead on the path of fiscal prudence by controlling expenditure and reducing fiscal deficit. The minister proposed to reduce fiscal deficit to 4.6 per cent of the Gross Domestic Product in 2011-12 from 5.1 per cent estimated for the current fiscal.

"I have conveyed the message in this Budget that we shall have to resort to fiscal prudence and fiscal consolidation should take place," he said. — TNS

New Delhi, February 28
Defence spending has been allocated an additional Rs 17,071 crore for 2011-12 — some 11.59 per cent over this year’s Rs 1,47,344 crore defence budget. New Delhi will spend Rs 1,64,415 crore — nearly $ 36 billion - on defence which is about 13 per cent of the entire country’s budgetary outlay for the next financial year staring April 1. Around Rs 69,199 croree, it was Rs 60,000 last year — has been earmarked for capital expenses like for new acquisitions of weapons, planes, ships, equipment, naval dock yards and special classified projects.

China, defence spending is almost double of India at $ 78 billion. It is expected to announce a defence budget for 2011 later this week. The core US defense budget — not including war funding -- was $ 530 billion in 2010.

Interestingly, the share of India’s defence spending out of its gross domestic product (GDP) has gone down. It now stands at 1.84 per cent of the GDP, down from 2.3 per cent this year. Various experts have assessed China’s defence spending at 7 per cent of its GDP. Successive standing parliamentary committees on defence have recommended allocation to be raised to at least 3-3.5 per cent of the GDP if the India armed forces are to rapidly modernise. In the past prime Minister Manmohan Singh and Defence Minister AK Antony, on separate occasions in the past, have pitched for a 3 per cent share of the GDP for defence. The GDP for the next fiscal has been projected at Rs 89,80,860 crore by the Finance Minister Pranab Mukherjee.

Lowering of the share of the defence spending in GDP terms, stems from the report of 13th Finance Commission. In its report in February last year the commission suggested “..as a percentage of GDP, defence spending is to be progressively decreased to 1.76 per cent by 2014-15”.

On a more positive note, the next budget will focus on vital aircrafts for the IAF and also choppers for the Army. Out of the Rs 69,199 crore for new acquisitions,

The other focus area is the Naval fleet. A sum of Rs 7,020 crore is set aside to pump in money for under construction ships like the sea-borne aircraft carrier, the stealth frigates and submarines. A sum of Rs 720 crore is allocated for naval dockyards which, as per the stated policy of the ministry, are set to modernize and compete with global players in ship building.

New Delhi, February 28
Union Human Resource Development Ministry’s ambitious reform agenda is unlikely to benefit from the allocation today’s Union Budget has made for the education sector.

While stressing the need to capitalise on the demographic dividend — 70 per cent Indians will be of working age by 2025 — Finance Minister Pranab Mukherjee today said he was allocating to education 24 per cent more than what was given to the sector in 2010-11. “I propose Rs 52,057 crore, which is an increase of 24 per cent over the current year,” he said.

In effect, this increase means little as it is 0.57 per cent of the projected GDP for the next financial year. Moreover, it is about Rs 22,000 crore less than what the HRD Ministry’s had demanded. The demand made was Rs 74,000 crore, of which Rs 52,000 crore was sought for school education to implement the Right to Education Act. The Sarva Shiksha Abhiyan has got just Rs 21,000 crore today.

Though the total school education budget of Rs 38,597 crore is 74 per cent of the entire education allocation, it is not enough. Ministry sources said it would have to be revisited as the RTE Act was now a justiciable right. Even on the secondary education side, where Rs 6,213 crore was allocated, the money is meagre.

Higher education has received Rs 13,013 crore as against Rs 11,000 crore in the current year. Here, the Ministry’s demand of Rs 22,000 crore was turned down. The low allocation would affect the plans to bring in vocational educational framework.

In higher education sector, 46 per cent of the budget (Rs 5,660 crore) has been earmarked for technical education. 

To set the tone for a newer, vibrant and more efficient economy, the government is taking major steps in simplifying and placing the administrative procedures concerning taxation, trade and tariffs and social transfers on electronic interface, free of discretion and bureaucratic delays. All government expenditure has to be oriented towards the production of public goods and services. Experience has shown that statutory fiscal consolidation targets have a positive effect on macroeconomic management of the economy.

The Direct Taxes code is proposed to be effective from April 1, 2012 to allow taxpayers, practitioners and administrators to fully understand the legislation and adjust to the revised procedures. Strong IT infrastructure is being readied for the introduction of GST. The Budget also proposes to raise the FII limit for investment in corporate bonds to enhance the flow of funds to the infrastructure sector. THE FM said the limit for investment in corporate bonds, with residual maturity of over five years issued by companies in infrastructure sector is being raised by $20 billion which would now be $25 billion.

Several new Bills on financial sector reforms will be placed before the house like the The Insurance Laws (Amendment) Bill (2008) seeks to hike the foreign direct investment cap in the insurance sector, currently pegged at 26 per cent, while the PFRDA Bill would give a legal backing to the interim regulator - the PFRDA.

Another proposed legislation is the Securitisation and Reconstruction Of Financial Assets and Enforcement of Security Interest (SARFAESI) Act that would allow seizure of assets from defaulting borrowers to help banks reduce non-performing assets. — TNS

Chandigarh, February 28
The hike in budgetary allocation to agriculture sector in the Budget this year has been hailed by the agriculture economists.

SS Johl, eminent agro economist, who chaired the special committee of the RBI on Farm Sector Distress, said the Finance Minister deserves praise for increasing the interest subvention on crop loans to 3 per cent, thereby ensuring that the farmers get crop loans at just 4 per cent. “This will ensure a good credit culture as farmers will benefit from repaying their loans on time. But banks will have to be extremely cautious while extending these loans to the big farmers. In most places, including Punjab, the big farmers have a higher credit limit to avail loans, and have formed a practice to taking crop loans from banks at a low rate of interest, and then refinancing this to the small farmers by charging them an additional rate of interest (over what they pay to the banks),” he warned.

RS Ghumman, head of the Department of Economics at Punjabi University, Patiala, said: . “The additional credit flow to the banks for the agriculture sector - up from Rs 3,75,000 crore in 2010-11 to Rs 4,75,000 crore in the next fiscal - will help in ensuring that more and more farmers avail institutional loans (from banks), rather than from moneylenders.”

Balbir Singh Rajewal, president, Bhartiya Kisan Union, said the Budget has failed to tackle the issues concerning the farmers.