I know it's a bit late but better late den never. I hope it will be useful to CA and CS students.  

KING’S SPEECH – UNION BUDGET- MY ANALYSIS

Well it’s a mere coincidence that Union Budget and Academy Awards (Oscars) were announced on the same day. King’s speech swapped the show by claiming all the major awards like – Best Movie, Best Actor and Best Original Screenplay.

Well let’s shift our focus from King’s Speech – The Movie to King of Finance – Pranab Da’s speech.

Well there were lots of expectations from this Budget. 

Friends I am neither an economist nor a financial analyst. I am a CA student and will mention what I have understood as a layman/common man.

 (A)   Inflation

Who can forget the onion/food prices last year!!

The main reason of inflation given by him was the gap b/w wholesale & retail price. Conditions have improved this January from last year but still it is a major issue and a matter of prime concern. Govt. is taking measures especially to control food prices and expects it to fall next year- I will say WIP (Work-in-progress)

 (B)    LOANS/MONETARY/AGRICULTURE

• Budget proposes to raise housing loan limit from20 lakh to25 lakh and 1% reduction in the interest rates on loan upto 15L  – Good move
• Remuneration of Anganwadi Helpers is being raised from1500 to3,000 per month &1,500 from750 – Well I hail from a small city of Western-Up (Bijnor) and seeing the present system of Anganwaadi in my city don’t consider it as a very wise move. Absenteeism and corruption are the major highlights of Anganwadiand first a proper system s’d be developed to check the discrepancies of the same otherwise our hard earned money is gonna waste in such schemes-thumbs down from me  
• Capital Investment in Fertilizer it to be treated as Investment. 3% Interest subsidy to farmers -  thumbs UP
• Pension Age (BPL cards) reduced from 65years to 60 years and for 80+ age pension increased from200 pm to 500 pm -  GOOD MOVE BUT STRICT VIGILANCE IS REQUIRED IN DISTRIBUTION OF AMOUNT

 Direct tax/indirect tax/i-tax return/TAX SAVINGS

• Direct Tax Code will be implemented from April, 2012 and the Goods and Services Tax Bill is to be introduced in Parliament this year  – Expected
• Exemption limit for the general category of individual taxpayers enhanced from Rs. 1,60,000 to Rs. 1,80,000 giving uniform tax relief of Rs. 2,060-BELOW EXPECTATIONS
• A New category of V.Senior citizen created for people of 80+ age and a exemption limit of500000 will be provided to them – NOT USEFUL FOR MIDDLE/ LOWER CLASS
• Qualifying age reduced for senior citizens from 65 years to 60 years -thumbs UP
• No change in tax slab for Woman Assessee - DISSAPOINTED
• The standard rate of central exercise duty will be maintained at 10%. A 1% central excise duty on 130 items entering the tax net and there will be no change in CENVAT rates -  A MOVE TO STAY ON COURSE FOR TRANSITION TO GST
• Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning- BLUNDER. JUST TELL ME ANY ICU WITHOUT AN AC FACILITY. A big blow on lower middle class people
• Hotel accommodation in excess of ` 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax- NECESSARY MOVE TO COVER UP THE LOSS FROM DIRECT TAXES.
• A new simplified form ‘Sugam’ to be introduced to reduce the compliance burden of small tax payers- APPRECIABLE MOVE
• Tax free bonds of Rs. 30,000 Crore proposed to be issued by Government undertakings during 2011-12 – Expected
• Salaried employee having no other source of income is exempted from filing the return– TOTAL WASTE. JUST TELL ME THAT IS THERE ANY SALARIED PERSON WITHOUT ANY F.D. OR A SAVING A/C?? IF NO, THEN INTEREST INCOME WILL COME UNDER INCOME FROM OTHER SOURCES AND HE WILL BE REQUIRED TO FILE THE RETURN. 

(D) OTHER IMPORTANT ANNOUNCEMENTS

• Cash subsidy will be provided to people below poverty line for Kerosine,Fertilizers & LPG – BRILLIANT MOVE BUT DEPENDS A LOT ON APPLICATION
• FII investment through Mutual Funds – CRUCIAL FOR INDIAN ECONOMY
• 5 Point Strategy to deal with Black Money -  no expectation from this system kyunki chor khazane ki raksha nahin kara karte
• Disvestment without Privitisation – TIMID DECISION
• Scholarship scheme for SC/ST students studying in classes IX and X- JUST ONE QUESTION. WHY ONLY FOR SC/ST STUDENTS????
• Mobile, Laser Printer, Steel, Cement & LED will be cheaper and Brander clothes, branded Gold, Air Travel, Medical check-up will become costlier-  NO COMMENTS

CONCLUSION

Well half of the Union Budget focused on Infrastructure. It is a good budget for Industry. But FM has missed an opportunity. The reason for the same is it can’t be called as “Aam Aadmi ka Budget”.

I have tried my level best to keep the matter simple but effective. Your comments and suggestions for improvement are most welcome.

 Regards

Pulkit Gupta