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Cheaper loans to farmers
Social sector Budget surges to Rs 1.6 lakh cr but not enough
Five-fold plan to deal with black money menace
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Allocation for health up 20%
Air travel to cost more
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Cheaper loans to farmers
New Delhi, February 28 Major components relating to farming and farmers in the Budget include Green Revolution to the eastern region with a further allocation of Rs 400 crore. The program would target the improvement in rice-based cropping system of Assam, West Bengal, Orissa, Bihar, Jharkhand, Eastern Uttar Pradesh and Chhattisgarh. The Budget provides Rs 300 crore each for integrated development of 60,000 pulses villages in rain-fed areas, promotion of oil palm, increasing the production of fruits and vegetables and promotion of nutritious cereals like bajra, Jowar, ragi and other millets and initiation of a national mission for protein supplements through dairy farming, piggery, goat rearing and fisheries in selected blocks. It also has provisions for accelerated fodder development programme, promotion of organic farming methods, more mega-food parks, for warehousing and storage and cold chains and attracting private investment in this sector. The effective rate of interest to farmers who repay the crop loans on time will be 4 per cent. The existing interest subvention scheme of providing short-term crop loans to farmers at 7 per cent interest will be continued during 2011-12. In the last Budget, an additional 2 per cent interest subvention was given to those farmers who repaid their crop loans on time. This has been increased to 3 per cent this fiscal. The effective rate of interest for farmers who repay loans on time will therefore be 4 per cent per annum. Another incentive for the farming community comes in the form of increase in target of credit flow from Rs 3,75,000 crore this year to Rs 4,75,000 crore. Banks have been asked to step up direct lending for agriculture and credit to small and marginal farmers. Subsidies like ones relating to fertilisers and kerosene are proposed to be paid directly to farmers. The excise duty has also been reduced in the case of equipment for drip irrigation. In view of the enhanced target for flow of agriculture credit, NABARD’s capital base has been strengthened by infusing Rs 3,000 crore in a phased manner as the government equity. |
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Social sector Budget surges to Rs 1.6 lakh cr but not enough
New Delhi, February 28 In these hikes, Finance Minister (FM) Pranab Mukherjee met a long-standing demand of these women who are implementing the Integrated Child Development Scheme for children below 6 years besides managing to offset a major upset he caused by offering women nothing beyond cheaper sanitary napkins and baby diapers on which he slashed the central excise duty from 10 to 1 per cent. No women-specific tax concessions were announced today. Another beneficiary of the Budget would be rural women for whom the FM today announced the creation of Women’s Self Help Group Development Fund with a corpus of Rs 500 crore. Overall, the thrust of social sector allocation is on the schemes for the poor, including Bharat Nirman which includes national programmes for road expansion, rural electrification, irrigation development, Indira Aawas Yojana and National Rural Drinking Water Programme. Together, these schemes today got Rs 58,000 crore — Rs 10,000 crore more than the last year. The Schedules Castes and Scheduled Tribes, for the first time today, got specific allocations with separate sub plans being announced for each. Together with allocations on education, health, women, children and minorities, the Government’s social sector spending is projected to increase but as much as expected. It still works out a meagre 1.79 per cent of the projected GDP for 2011-2012 (Rs 8980860 crore). This is less than what most of the developed nations spend on each of the sub heads under the social sector. In fact as a total percentage of the allocated budget, the share of social sector this year has dropped marginally. Last year, it was 37 per cent of the total allocated budget. This year, it is 36.4 per cent — though next only to defence. An analysis of allocations shows a declining trend in the percentage increase of the budget for key ministries. Women and Child Development (WCD) Ministry which received 50 pc hike in last year (as compared to the 2009-2010 budget) today got 15 per cent increase in allocation which stands at Rs 12, 650 crore. Of this, 81 per cent (Rs 10,330 crore) is for ICDS alone (where increased salaries of anganwari workers would have to be paid). The minorities who got 50 per cent budget hike last year today received a 9 per cent raise in allocation. The Minority Ministry’s allocation was Rs 1740 crore in 2009-10; Rs 2600 crore in 2010-11 and is Rs 2850 crore for 2011-12. |
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Five-fold plan to deal with black money menace
New Delhi, February 28 He added that while the membership of the Financial Action Task Force was secured in June last year, the government has also joined the Task Force on Financial Integrity and Economic Development, Eurasian Group and Global Forum on Transparency and Exchange of Information for Tax Purposes. “Discussions have also been concluded for 11 Tax Information Exchange Agreements and 13 new Double Taxation Avoidance Agreements (DTAAs) along with revision of provisions of 10 existing DTAAs,” he said. “The number of cases registered under this law has increased to over 1,200 by January this year. The strength of the Enforcement Directorate has been increased three-fold to deal effectively with the increased workload.” He informed that the Ministry of Finance had also commissioned a study on unaccounted income and wealth held within and outside the country. |
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Hope propels Sensex, reality deflates it
Mumbai, February 28 "Investors' sentiments turned positive following announcements that the government wanted to increase inflows from FIIs and its intentions to keep fiscal deficit at 4.6 per cent," says Amit Jain, a broker at the Bombay Stock Exchange. However, later in the day investors felt that the government would not be able to stick to its word and sold heavily, Jain said. However, individual proposals in Mukherji's Budget impacted various stocks. Among the Sensex stocks, ITC was the biggest gainer closing 8.5 per cent higher at Rs 169.50 after the government left excise duty on cigarettes unchanged. Other gainers were Maruti Suzuki and Mahindra & Mahindra which closed 5 per cent and 3 per cent higher, respectively. Mid-cap stocks, however, showed modest gains with the BSE Midcap Index gaining just 0.3 per cent at 6,373.23. The biggest loser in this category was Sesa Goa which fell more than 7 per cent after the government raised export duty on export of iron ore to ad valorem 20 per cent on lumps as well as fines, from the current rates of 15 per cent on lumps and 5 per cent on fines. Others fretted that soaring oil prices may cause the government's proposals for prudent fiscal planning to evaporate. "The government would have to increase fuel prices to keep the fiscal deficit in check," Dinesh Thakkar, chairman & managing director, Angel Broking said. Bankers felt that the government was moving towards greater convertibility of the rupee by allowing foreign investors to invest in Indian mutual funds. Allowing higher FII investment in infrastructure bonds and allowing foreign investors to invest in domestic mutual funds pointed out towards liberalising the capital account, SBI MF CIO Navneet Munot told television channels. Analysts said the next few trading sessions will indicate whether the markets will break out of the bear grip of the last few months. Credit rating agency Fitch said that the government's fiscal deficit target of 4.6 per cent of GDP in the fiscal year 2012, compared to an estimate of 5.1 per cent of GDP in the fiscal year 2011, will not be easy to meet. Fitch said the government benefited from one-off events like the 3G and broadband wireless spectrum auctions which helped it to contain the fiscal deficit. |
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New Delhi, February 28 'For health, I propose to step up the plan allocations in 2011-12 by 20 percent to Rs.26,760 crore,' Mukherjee said while presenting his third budget. He also said the Rashtriya Swasthya Beema Yojana has 'emerged as an effective instrument for providing health cover to marginal workers'. 'It is now being extended to Mahatma Gandhi National Rural Employment Guarantee Scheme beneficiaries and others. In 2011-12, I propose to further extend this scheme to cover unorganised sector workers in hazardous mining and associated industries like slate and slate pencil, dolomite, mica and asbestos,' he added. — PTI
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Air travel to cost more New Delhi, February 28 Finance minister Pranab Mukherjee proposed to increase rates of service tax from Rs 100 to Rs 150, making domestic travel costlier by Rs 50. Those traveling abroad will increase from Rs 500 to Rs 750. The Finance Minister also proposed to tax travel by higher classes on the domestic sector at the standard rate of 10%. Rising global crude prices today has ensured a substantial rise in jet fuel prices. State-owned oil firms raised ATF price by 3.4 per cent in line with spike in crude oil prices, the 10th fortnight in a row. The single largest element contributing to airline costs is ATF, which accounts for 40 percent of the operating cost of Indian carriers as against a figure of only 20 for international carriers.
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Coming in the backdrop of emerging global food crisis and high inflation figures at home, Budget 2011-12 is Finance Minister Pranab Mukherjee’s attempt to revitalise India’s struggling farm sector, calm food prices and lay the foundation for UPA’s ambitious National Food Security Bill, which he promised to introduce in Parliament this year.
Union Finance Minister Pranab Mukherjee today said the government had adopted a five-fold strategy to deal with the problem of generation and circulation of black money. Presenting the Budget, Mukherjee said: “The five-fold strategy consists of joining the global crusade against black money, creating an appropriate legislative framework, setting up institutions for dealing with illicit funds, developing systems for implementation and imparting skills to the manpower for effective action.”
His four-pronged strategy covers agricultural production, reduction in wastage of produce, credit support to farmers and a thrust to the food processing sector.
As the allocation for the social sector increased from Rs 1, 37, 674 crore last year to Rs 1, 60, 887 crore for the next financial year beginning April 1 (17 per cent surge), the salaries of anganwari workers stood doubled from Rs 1500 to Rs 3000 per worker per month and those of anganwari helpers increased from Rs 750 to Rs 1,500.