2012 Union budget of India

Background

The Indian economy had experienced a slowdown in the fiscal year 2011-12, with GDP growth decelerating from the preceding years. The Economic Survey 2011-12, tabled just before the budget, estimated growth at 6.9%, a significant drop from the 8.4% recorded in 2010-11. Persistently high inflation, particularly in food prices, remained a major concern and leading to protests over corruption and price hikes. The fiscal deficit was also under pressure, exceeding the initial budget estimates for 2011-12 along with subsidy spending reaching up to 2.5% of the GDP. Globally, the sovereign debt crisis in Europe added to economic uncertainty and impacted capital flows. The government faced criticism over policy inaction, sometimes termed 'policy paralysis', which was seen as hindering investment and growth.

Highlights

Notable changes included:

• No change in corporate tax rates
• Exemption limit on individual tax raised to 200,000
• Service tax raised from 10% to 12%
• Defence spending increased by 18%
• Excise duty raised from 10% to 12%
• Full exemption on import duty of thermal coal for power plants
• Customs duty on gold doubled

Reactions

The budget proposal was widely criticized to be a "play-it-safe", "too-conservative" budget with no big reforms or policy changes.

References

References

1. (Feb 15, 2012). "Union Budget 2012-13 on March 16, Railway Budget 2012-13 on March 14".
2. (15 March 2012). "State of the Economy and Prospects". Ministry of Finance, Government of India.
3. "Taxes, Political Gridlock, and India's 2012 Budget: The Future of Economic Policy in India {{!}} The National Bureau of Asian Research (NBR)".
4. (2011-02-28). "Budget 2011-2012: Speech of Pranab Mukherjee, Minister of Finance". The Economic Times.
5. (2012-04-14). "India's union budget 2012–13: playing it safe {{!}} East Asia Forum".
6. (2012-03-16). "India uses budget speech to sound upbeat economic note". BBC News.
7. (2012-03-16). "Budget 2012 anti-people, reflects UPA's policy paralysis: Tamil Nadu Chief Minister J Jayalalithaa". The Economic Times.
8. (2012-03-14). "Untilised funds reflect government's policy paralysis".
9. (2012-03-16). "Budget 2012 highlights".
10. (2011-03-19). "India's 2011-12 budget fails to see the big picture {{!}} East Asia Forum".
11. Jayaraman, K. S.. (2012-03-01). "Indian budget disappoints". Nature.
12. "Union Budget 2012 - Who Really Bit The Bullet ?".