New Delhi, March 16 : The Union Budget 2012-13 presented by Finance Minister Pranab Mukherjee in LokSabha today identifies 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.
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 slowdown 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 thereafter.
Mukherjee 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 Finance Minister 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 2012-13and over the next three years, it would be further brought down to 1.75 per cent of GDP.
Mukherjee said that based on recommendations of the Task Force headed by ShriNandanNilekani, 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, Mukherjee 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-backs and listing at stock exchange.
Stating that while in 2011-12, the Government will raise about Rs.14,000crore 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.
Mukherjee 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.
On infrastructure and industrial development, Mukherjee said that during the 12th Plan, infrastructure investment will go up to Rs.50 lakh crorewith 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.
The Minister proposed to allow External Commercial Borrowings (ECB) to part finance Rupee debt of existing power projects.
Mukherjee announced a target of covering 8,800 km. under NHDP next year and increase in allocation of the Road Transport and Highways Ministry by 14 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 up to 49 per cent in the equity of an air transport undertaking is under active consideration.
Expressing concern over shortage in housing sector, the Finance Minister 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.
For the textile sector, the Finance Minister announced setting up of two more mega clusters, one to cover Prakasam and Guntur districts in Andhra Pradesh and 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 aRs. 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.
The Finance Minister proposed to set up a Rs.5000 crore India Opportunities Venture Fund with SIDBI to enhance availability of equity to Micro, Small and Medium Enterprises.
On Agriculture, 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 VikasYojana (RKVY) is being increased to Rs. 9217 crore in 2012-13.
For 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 farmers. He added that 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.
The Finance 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-sectoralprogramme 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, SABALA.
The allocation for rural drinking water and sanitation is proposed to be increased by over 27 per cent to Rs. 14,000 crore and for PradhanMantri Road SadakYojana 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 RashtriyaMadhyamikShikshaAbhiyan to Rs. 3,124 crore, He proposed to set up a Credit Guarantee 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 Mission is 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 Aajeevika i.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.
The Finance Minister 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.
Mukherjee said adequate funds are proposed to be allocated to complete enrolments 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 budgeted as Non Plan Expenditure.