Union Budget 2011-12

Presentation onBUDGET 2011Financial Reforms Reality or Just Headlines : 

Presentation onBUDGET 2011Financial Reforms Reality or Just Headlines Submitted By : PARVESH TULSEJA MBA 4th Semester 90822265942

MEANING OF BUDGET : 

MEANING OF BUDGET “A budget is a financial and quantitative statement prepared prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective.”   A budget is a quantitative expression of a plan of action relating to the forthcoming defined period. It represents a written operational plan for the definite period. It is always expressed in term of money and quantity. Therefore budget is a list of all planned expenses and revenues. It is a plan for saving and spending. Union Budget of India The Budget of India is prepared by the Budget division of Department of economic Affairs of the Ministry of Finance annually (Excluding the railway budget).

History of Indian Budget : 

History of Indian Budget India's first Finance Minister Sir R.K. Shanmugham Chetty, presented the first Finance Budget of independent India on November 26, 1947. The change in the approach began with Mr. Manmohan Singh who was instrumental in head starting the new phase of economic liberalization. He reduced the control of Government over public sector units through disinvestment. Facts Bite First Finance Minister: Shanmugham Chetty Number of Finance Minister Since Independence: 28 Maximum Number of Budgets Presented by: Morarji Desai Economic Liberalization Started by: Mr. Manmohan Singh ( Finance Minister 1991) Current Finance Minister: Mr. Pranab Mukherjee on 28th feb, 2011 (Monday)

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Financial Reforms Reality or Just Headlines

OBJECTIVES OF THE STUDY : 

OBJECTIVES OF THE STUDY Impact on common man’s burden of taxes and what the common man is expecting. Impact on financial services available in the market regarding investment and savings. Is it really 3’D’s effect (fiscal deficit, current account deficit and government deficit) or just a headline.

RESEARCH METHODOLGY : 

RESEARCH METHODOLGY 28th feb, 2011, Finance minister Pranab Mukherjee presented the budget for 2011-12. He has given the statement that the budget has real impacts and have some long terms influences. He interviewed that he focused on long term growth of various sectors and the budget also helps to control the inflation. I tried to find out the answer for my question that is this budget boon or bane for the common man fight against inflation and how far it fulfills their expectations. Data Collection For data collection I studied : Copy of budget 2011, Chat with experts through internet, Interaction with different people from different class, Questionnaire. SIZE OF SAMPLE My Research sample size is 50.

Highlights of Union Budget 2011-12 : 

Highlights of Union Budget 2011-12 Income tax exemption raised from Rs 1.6 lakh to Rs 1.8 lakh. I-T exemption for senior citizens increased from Rs 2.4 lakh to Rs 2.5 lakh; age bracket reduced from 65 years to 60 years. New bracket of 'very senior citizens' created (80 years and above), having an I-T exemption of Rs 5 lakh. Sarva Shiksha Abhiyan outlay increased by 40 per cent to Rs 21,000 cr. Rs 8,000 cr allocated for North-East development and Rs 28,000 cr for J&K. Capital infusion of Rs 20,157 cr in PSU banks. Economy to grow at 9 per cent in 2011.

Highlights of Union Budget 2011-12 : 

Highlights of Union Budget 2011-12 Direct Tax Code to be effective from April 2012. Rs 40,000 crore disinvestment target for 2011-12. Rs 58,000 cr allocated for Bharat Nirman projects. Credit flow for farmers increased from 3.75 lakh cr to Rs 4.75 lakh cr. Govt to maintain 51 per cent stake in PSUs. FIIs allowed to invest in mutual funds. FII limit in corporate bonds raised to $40 million. housing loan limit raised from Rs 20 lakh to Rs 25 lakh from priority sector lending. Subvention of 1 per cent on home loans up to Rs 15 lakh.

Aam aadmi's wishlist : 

Aam aadmi's wishlist During the year, the tax collection has gone up by 27%, as against the budgeted 18%. In the urge to keep the masses happy, the FM would surely not want to impact revenues.  So, would Budget 2011 turn out to be a reason to cheer and breathe a sigh of relief, or will it be a 'give some - take some' policy. We are in an era where the inflation is at its peak and 'Need (onion)', 'Comfort (petrol)' and 'Luxury (beer)' are being sold at the same price. Common man wants : Conveyance allowance to the extent of at least INR 1,500 per month. Exempt medical expenditure upto INR 50000 Conditions precedent to deduction for interest on housing loan Deduction under section 80C to bring it in the range of INR 150,000 to INR 300,000. One can go on with the Budget wish list, as wishes have no boundaries.   The economists rightly start their lectures with “resources are scarce,” but human “wants are unlimited”.

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IMPACT ON “COMMON MAN”

Major Inclusions that affect the common man : 

Major Inclusions that affect the common man The on-line preparation and e-filing of income tax returns, e-payment of taxes through 32 agency. These measures have empowered taxpayers to meet their tax obligations without visiting an income tax office. Raw silk materials, agarbatti, homeopathic medicine, pistachio, imported art and antiques have become cheaper. Consumer durables like TV, fridge, washing machines have remained as they were. Health check-ups are bound to become expensive Service tax on domestic economy class air tickets has been increased by Rs 50, and by Rs 250 for international routes.

BURDEN OF : 

BURDEN OF

Tax Slab and Calculation : 

Tax Slab and Calculation Quick highlights: Base slab for general tax payers increased to 1.8 lakh from original 1.6 lakh Senior citizen age reduced to 60 years from last years 65 years. Senior citizen now include people between 60 and 80 years. Also increased the base slab for senior citizen to 2.5 lakh from previous years 2.4 lakh A new category called "Very Senior citizen" added for people above 80 years.

EQUITY INVESTMENT : 

EQUITY INVESTMENT IMPACT ON FINANCIAL SERVISES IN INVESTMENT MARKET

Indian Budget 2011-12vs Stock Market : 

Indian Budget 2011-12vs Stock Market During the time when FM Mr. Paranb Mukhargee presented the budget 2011-12, the eyes of every investor are on the market variation as every one was thinking that the market will loose the points. But it was really surprising that the market gain some points. Which is good indeed for the Indian market. The BSE 30-share Sensex was up 162.43 points or 0.92% and the market edged higher in early trade. & Market extends initial gains ahead of Budget

Allowing FDI investors to invest in Indian Market : 

Allowing FDI investors to invest in Indian Market In the Union Budget for 2011-12 presented to the Lok Sabha, Mr Parnab Mukherjee said the limit for investment incorporate bonds, with residual maturity of over five years issued by companies in infrastructure sector was being raised by $20 billion to $25 billion. This would raise the total limit available to FIIs for investment in corporate bonds to $40 billion, he said. He pointed out that all prior regulations and guidelines had already been consolidated into one comprehensive document in order to make the FDI policy more user friendly. This is reviewed every six months, said the Finance Minister.

ANALYSISANDINTERPRETATION : 

ANALYSISANDINTERPRETATION

Question-1 Do you think, the budget 2011-12 come up to the expectations or fulfill the whims of “Aam Admi”. : 

Question-1 Do you think, the budget 2011-12 come up to the expectations or fulfill the whims of “Aam Admi”. Interpretation :- after the analyzing it is still confusing as the budget is based on long term results. It fulfills the expectations of people somewhat. Yes, it helps to fulfill wishlist of common man. No, infact it will rises the prices. May be, can’t say exactly.

Question-2 Will new strategies of various duties like excise duty help to control the rise in prices of daily use goods or products? : 

Question-2 Will new strategies of various duties like excise duty help to control the rise in prices of daily use goods or products? Interpretation :- after the analyzing of 50 respondents 30% thinks optimistic but 40% respondents say it will not control the price rises. Yes, I think so. No, it will increase in prices Can’t say specifically but hope so.

Question-3 What element of Budget 2011 will impact most on you and your family? : 

Question-3 What element of Budget 2011 will impact most on you and your family? Interpretation :- most of respondents says the fuel prices impacts them rather other things. Cuts to social welfare/benefits Increase in fuel costs Change to taxation regime Other

Question-4 Does New tax slab in budget 2011-12 presented by FM, give benefit to you? : 

Question-4 Does New tax slab in budget 2011-12 presented by FM, give benefit to you? Interpretation :- the respondents who seeks for tax relief are not satisfied. FM increases the investment opportunities. Not much Yes, What i was expecting at least Satisfactory

Question-5 Is union budget effect your investment strategy and portfolio? : 

Question-5 Is union budget effect your investment strategy and portfolio? Interpretation :- FM projected long term growth and in budget he opens the door for FDI and gives opportunities to investors. Yes, as it effects the market as well No, it doesn’t effects that much

Question-6 What do you think if the FM allowing FDI to invest in Indian market. : 

Question-6 What do you think if the FM allowing FDI to invest in Indian market. Interpretation :- more than 50% respondents says it’s a positive move and 25% respondents says FM opens the door for black money welcome in country through the budget. Positive move. Opens back door for black money. Negative move.

Question-7 FM has aimed for long term growth while making the budget 2011-12. What do you think his point of view is in favor of us and had to follow long term strategy, when the inflation rises day per day? : 

Question-7 FM has aimed for long term growth while making the budget 2011-12. What do you think his point of view is in favor of us and had to follow long term strategy, when the inflation rises day per day? He projected right. Budget could have been better. Insufficient point of view. Interpretation :- more than 50% respondents says it could be even better infact FM also says in his first interview after budget the same.

Question-8 Do you think that the budget 2011-12 will achieve its target (like GDP growth target) or the targets in budget are achievable according to you ? : 

Question-8 Do you think that the budget 2011-12 will achieve its target (like GDP growth target) or the targets in budget are achievable according to you ? No, FM’s expectation are high Yes, its not a big deal Interpretation :- FM sets good target rates in budget 2011-12 which are achievable. But 30% respondents says it still not good as FM expecting high from future.

Question-9 Do you think that the union budget 2011-12 presented by FM, will help to control the inflation? : 

Question-9 Do you think that the union budget 2011-12 presented by FM, will help to control the inflation? Yes, I think it will help. (12) Can’t say right now. (24) No, it doesn’t work for control inflation. (14) Interpretation :- after the analyzes most of respondents could not give proper answer as its yes or not for this question. But I think it will control the inflation to a hight.

Question-10 What would you say overall regarding union budget 2011-12 presented by FM? : 

Question-10 What would you say overall regarding union budget 2011-12 presented by FM? Interpretation :- During survey some would say budget is growth oriented, some would say budget is neutral, some says budget is populist. After analyzing it is found that its a good, mixed and well balanced budget. Its like something for everyone. Growth oriented. Neutral budget. Well balanced budget.

FINDINGS & CONCLUSION : 

FINDINGS & CONCLUSION

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Indian Finance Minister Pranab Mukherjee, 28th February, Monday presented a 12.58-trillion rupee ($273.4 billion) budget for the next fiscal year, which starts April 1, 2011. Many would look into the Indian Union Budget 2011-2012 highlights and term it as per as their own opinion. Some would say budget is growth oriented, some would say budget is neutral, some says budget is populist and some would say its bad. In my own opinion its a good, mixed and well balanced budget. Its like something for everyone. The biggest fear markets had was hike in excise and custom duties and both of them are kept unchanged. Reform does not always mean that it should attract headlines. Real reform is change in the functioning of the government, change in the policies and its implementation which will affect the lives of aam aadmi." Budget was also focused on Infrastructure, Foreign Investments (FDIs), Education Sector, Disinvestment and Direct Tax Code. This budget is not helping a common man in India. Thezero tax bracket should have been applied upto 2 - 2.5 lakhs income people. People who earn 2 lakhs will loose Rs 20,000 of their salary which is almost Rs 2000 less per month. No wonder India can't get rid of its poverty.. rich always gets richer in India.

QUESTIONS… : 

QUESTIONS…

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T HANK YOU . .