Union Budget 2012

[Singh]

Expect India to be whooped internationally. Our international stature is directly proportional to our economic growth.

 

[Poseidon]

The budget was very cautious.
Neither Political nor reformist.
But more of a non event to the market.
Troubled UPA government delivers cautious budget | Reuters
Indian CIOs rate Budget as average - CIOL News Reports

 

[nrj]

Pranab Mukharjee seems to be confident that this will not be his last budget. Lets see.

 

[sehwag1830]

Expect India to be whooped internationally. Our international stature is directly proportional to our economic growth.

That is true for everyone why only India ?

 

[Singh]

That is true for everyone why only India ?

Yes and No. Since we are talking of India, (not a security council member, or a world class military or economic superpower), therefore I will only concern myself with India and our peculiar situation.

My point was our economic growth guarantees our world stature and vice versa, aka if our economic growth falters our world stature falls and if our world stature falls our economy goes down.

Maoism, hr issues, Kashmir, poverty, pollution and a host of assorted issues which no one is talking about now, can become talking points tomorrow.

 

[trackwhack]

I am happy with the defence spending hike. Everything else is plain disappointing. Absolutely lacking of vision. Our budget is designed around the fiscal deficit and how to keep that in control. With that in mind allocate funds for all the run of the mill tasks and sit back. This is so depressing.

 

[Ray]

I am happy with the defence spending hike. Everything else is plain disappointing. Absolutely lacking of vision. Our budget is designed around the fiscal deficit and how to keep that in control. With that in mind allocate funds for all the run of the mill tasks and sit back. This is so depressing.

What is the use, if this is the way things are to go.

Policy paralysis hits India's submarine manufacturing plans
Policy paralysis hits India's submarine manufacturing plans - Times Of India

 

[Mad Indian]

The reason Govt. increases the income tax slab are two fold

1. To cope with the rising costs, as it gives more cash in the hands of the taxpayer.
2. To increase consumption demand in the economy.

Sir you did not understand my point. I want all and i mean all to be uniformly taxed with just 10% or 15%, not 10%, 20%, 30%.

If you have skill and potential, use it to earn money based on that to the fullest potential, but dont do it illegally and dont cheat on the taxes! Now how does that sound

 

[trackwhack]

Sir you did not understand my point. I want all and i mean all to be uniformly taxed with just 10% or 15%, not 10%, 20%, 30%.

If you have skill and potential, use it to earn money based on that to the fullest potential, but dont do it illegally and dont cheat on the taxes! Now how does that sound

Sounds like the kind of thinking that has resulted in a Gini co-eff of close to 50 in the US and past 50 in China.

 

[Mad Indian]

DIRECT TAXES

BLACK MONEY

Govt is serious in tackling the menace of the black money. Special cells to be set up to track black money, says Pranab.

Joke of the year . Why would the CONs bring their black money back to India in the First place when they themselves were the ones who siphoned it off ?

 

[Mad Indian]

Sounds like the kind of thinking that has resulted in a Gini co-eff of close to 50 in the US and past 50 in China.

So what ? Both are way better of than indians right? And an average american earns say twenty times more than an Indian despite working far less efficeintly than the Indian. This is what our GINI coefficient concerns took us no?

And how sxactly can you make every one equal. You have running race in the school. And you have this usain bolt guy with you studying in the same class. so in every race he will win hands down. SO to take care of this disparity we make him run twice long as the other guys. Sounds similiar??

 

[LurkerBaba]

So what ? Both are way better of than indians right? And an average american earns say twenty times more than an Indian despite working far less efficeintly than them. This is what our GINI coefficient concerns took us no?

There are loads of economically and technologically developed nations which are egalitarian with low GINI indices . eg: Japan, Scandinavian countries etc etc

 

[Shaitan]

Union Budget 2012-13 has lot of potential for Infrastructure

The Union Budget for FY 2012-13 has a lot of potential for Infrastructure & Real Estate sector. Finance Minister, Pranab Mukherjee stated clearly that lack of infrastructure is a major concern in India and there is grave need to remove infrastructure bottlenecks.

I too, strongly feel the same. While we continue to be one of the fastest growing economies, our pace of development is unlikely to continue unless it is supported by an equally robust development of its infrastructure. There is a balanced scope of development in both Urban and Rural areas but more stress has been given to enhance & develop the Rural India.

There are some critical challenges mentioned in the Budget, like lack of monitoring resulting in time and cost overruns or acquiring land for projects, the implementation gaps, leakages from public programmes and the final quality which pose a serious challenge to the industry & overall growth. There are a lot of crucial things which needs immediate attention like proper Master-planning, Transport connectivity, strengthening basic infrastructure on water, irrigation, sewage-system, power-electricity, etc.
All this has been mentioned in this year's Budget and would be duly taken care of by the government by the Infra-investment fund of Rs. 50,000 Crores.

The total investment in infrastructure including roads, railways, ports, airports, electricity, telecommunications, oil gas pipelines and irrigation is estimated to have increased from 5.7% of GDP in 2007 to around 8.0% in 2011. This year's budget aims for an increased growth rate between 9-10% with the fund-allocation of Rs. 10,000 crore on developing the National Highways alone.

Budget 2012-13 gives major thrust on accelerating the pace of investment in infrastructure, as this is critical for sustaining and accelerating an overall growth. Efforts to attract private investment into infrastructure through the Public-Private Partnership (PPP) route have met with considerable success, not only at the level of the Central Government, but also at the level of the individual States.

A large number of PPP projects have taken off, and many of them are currently operational in both the Centre and the States. Since resource constraints continue to limit public investment in infrastructure, Public-Private Partnership (PPP) based development has been strongly emphasized in this year's Union Budget. Special attention has been paid to the financing needs of private sector investment in infrastructure.

Infrastructure investment (defined as electricity, roads and bridges, telecommunications, railways, irrigation, water supply and sanitation, ports, airports, storage and oil-gas pipelines) would be increased from about 8% of GDP to about 10% of GDP. The total investment in infrastructure would have to be over Rs. 45 lakh crore or $ 1 trillion in the next five years. Financing this level of investment requires larger outlays from the public sector, and this has to be coupled with a more than proportional rise in private investment.

The growth curve of Indian economy is at an all time high and contributing to the upswing is the real estate sector in particular. The Union Budget 2012-13 is very promising for the infrastructure sector and would fetch great results if implemented effectively.

For economic and financial policymakers, new incentives to attract capital and projects have emerged. The ambitious FDI policies provide greater access to global capital markets will further expand the mix and amount of resources available for development.

Infrastructure challenged India represents a fertile opportunity for a new approach that would attract needed financial resources for sustainable development and allow even greater participation in the global economy. With major National & Global players making large-scale investments, the coming year would boost up the development of infrastructure and thus construct a developed Nation."



Union Budget 2012-13 has lot of potential for Infrastructure & Real Estate sector, says industry

 

[nitesh]

 

[thakur_ritesh]

Financial Highlights of Budget 2012-12:

* Direct proposals to give in net revenue loss of Rs. 4,500 crore and net gain of Rs. 45,940 crore from indirect taxes, resulting into a net gain of Rs. 41,440 crore.

* Fiscal deficit targeted at 5.1 per cent of GDP in 2012-13, down from 5.9 per cent in 2011-12; Central Government debt at 45.5 per cent of GDP.

* Total expenditure budgeted at Rs. 14,90,925 crore; plan expenditure at Rs. 5,21,025 crore, 18 per cent higher than 2011-12 budget; non-plan expenditure at Rs. 9,69,900 crore.

* Gross Tax Receipts estimated at Rs. 10,77,612 crore, 15.6 per cent higher than original budget estimates and 19.5 per cent over the revised estimates for 2011-12.

Budget at 330b usd, there has been a good hike in expenditure compared to last fiscal. What amount of this is being loaned?

Anyways, the effort does seem to increase the consumer spending, alongside the spending being done by the goverment to bring the economy back on track, hope they can adequately address the supply constraints, or the inflation will return galloping back.

Yusuf,

GST cant be implemented without the BJP on board, and for now that looks like a distant dream, even the new deadline of august looks unrealistic.

 

[sob]

Fiscal deficit targeted at 5.1 per cent of GDP in 2012-13, down from 5.9 per cent in 2011-12;Central Government debt at 45.5 per cent of GDP.

It is this line in the budget that is causing me the maximum worry.

1. Fiscal Deficit

These are big words and empty promises. The FM has shown a lower outlay of Rs. 17,600 Crs for NREGA and he is also taking into account 2G spectrum sale and Rs. 30,000 Cr. in sale of stake in PSUs.

For NREGA the lesser we say the better it is. This is not under the control of the FM, if the wise people in NAC demand a higher allocation 6 months down the line, could the FM put his foot down-NO.
For FSB a measly sum has been prmised, again if there is pressure from NAC and if the mid term elections loom then the money taps will be turned full on-- forget any fiscal discipline.

Coming to 2G auctions and sale of PSU shares-- one is mired in court cases and the other may not be in the pipeline soon if the recent ONGC fiasco is anything to go by.

Central Govt. Debt

Central Govt. debt is 45.5% of the GDP. This is alone to scare the daylights out of me. Can we just put a figure to it-- US $0.78 Trillion ( Rs. would have had too many zeros). To service this debt and other schemes the Govt. needs money and will turn to the RBI, and this will only lead to higher inflation numbers and higher interest rate regime.

It has been pointed out by many analysts-- look out for a lower Soverign Rating for India 4-6 months down the line. GST and DTC were the need of the hour and the Govt. has not had the guts to bite the bullet and implement them.

 

[thakur_ritesh]

Yes Sumeet, and the problem compounds many times more when the revenue to GDP ratio is just around 12%, and each year we are further adding to the debt. Our fundamentals will remain strong only if reforms are introduced timely, and there are investors ready to invest, unlike what has been allowed to happen in the last 3 odd years of the UPA-II.

 

[sehwag1830]

I think tax-gdp ratio is around 15%. You are forgetting states tax collection

 

[thakur_ritesh]

I think tax-gdp ratio is around 15%. You are forgetting states tax collection

Yes, you are right.

Tax to gdp ratio is between 10.1-10.3%, of this around 5.5% is direct taxes, and rest around 4.6-4.8% is accumulated through indirect taxes. Revenue through other means is around 1.5%. Total revenue to GDP ratio is less than 12%. The reason for lower tax to GDP ratio has been to stimulate the economy, with the hope there will be higher consumer spending.

I am stressing on the central government tax and revenue to gdp ratio because in question is the central fiscal deficit and central debt.

They are targeting 12-13% tax to GDP ratio this 5year plan. The targeted figure is the same that was achieved during Chidu's tenure as finance minister.

The figure of around 16% tax to GDP ratio includes the states' share as well.

 

[sob]

If we add the debts of the states then it becomes a nightmare scenario. At this moment I am tracking the situation of the State Electricity Boards and here the financials, due to populist measures, are very scary. We can see in the case of TN and Maharashtra where the SEB does not have the money to buy power from the Grid and has to depend on it's own meager generating capacity.

What is very important for the both the Central and State Govt. to plug the giant holes in their schemes. Money is leaking not in a trickle but in a deluge. IMO if these leaks can be curtailed by 50% then a large number of problems can be solved. simply adding new schemes without cleaning the system will not work.