The Hindu: 17th March 2012,Saturday

1. Budget 2012 coverage:

List of ‘must read’ articles: Dr. Pranab (Frontpage), On a wing(Pg8), This is not fiscal consolidation(Pg8), No green signal(Pg9), Food subsidy allocation(Pg13), Farm allocation raised(Pg13), Mobile based fertilizer(Pg13), Funds slashed for (Pg13), Wiser by Vodafone(Pg14), India to launch Mars(Pg14), Defining relatoinship(Pg16).

My picks for the day are as follows:

–> Fiscal deficit projections are kept at 5.9% for this fiscal and 5.1% for the next year with the debt to GDP ratio hovering around 45%

–> 2% hikes each in the service tax and the excise duty (in this context read about the Direct and indirect taxes, CENVAT, MODVAT, Ad velorem, specific duties, GST negotiations and 13th finance commission recommendations, DTC clauses etc)

–> Changes in the Tax exemption limits under Sec 80c IT Act

–> Rs 15888 crore allocation for Swabhiman scheme

–> In the infrastructure sector, budget focused primarily on increasing private investment by further encouraging Viability gap funding in PPP projects, allowing ECB mechanism for Airways sector etc

–> FM has tried to contain the total subsidy bill within 2% of GDP but this in turn has resulted into the lesser allocation being made for the food subsidies which at present is Rs75000 crore, a figure much below Rs 1lkh crore as proposed in the Right to food bill.

–> No new scheme has been introduced in the agriculture sector but the funding for important schemes like Rashtriya Krishi Vikas Yojana, Green revolution in Eastern India, 60000 pulses villages project, Mahila Kisan Sashaktikaran Yojana, KCCs etc has been maintained. Also, a new mission on food processing and an Irrigation and water resource finance company for funding irrigation projects  have been introduced in this budget.

–> Announcement of Mobile based fertilizer subsidy system (mFMS) on the lines of Core Subsidy Management System recommended by Nandan Nilekani committee is a welcome development

–> Govt has stood up with its commitment towards social sector spending, though MGNREGS for the first time in last few years has witnessed dip in its budgetary allocation which came down to Rs 33000 crore from Rs 40000 crore(2011-2012). Apart from that, funding for other important schemes like PMGSY, IAY, NRLM (Aajeevika!), loans for women SHGs, IGNDPS, IGNWPS etc. have either been increased or kept intact.

–> Funding for Adhar project and other Aadhar linked schemes have been increased

–> Interestingly, there is also a mention of proposed ISRO’s Mars Mission along with the Chandrayaan 2 project in the budget

–> Power Sector: Besides having been exempted from paying the custom duty on their coal imports, some other incentives like allowing ECB route to refinance their debts, exemption from Counterveiling duty etc have boosted the confidence of the sector.

–> Provoked by the recent SC judgement in Vodafone-Hutch case, the govt has finally decided to bring in the Advanced Pricing Agreement mechanism. Search APA, Transfer pricing and the related DTC clause on net.

Overall the budget is a balanced one with Fiscal Consolidation in the short term and growth prospectus in the medium term driving the major decisions.

2. Where the pedestrian: Pg6

Relevance: A good read on “City Management and Administration” which is also a separate topic in Public Administration.

3. Other potential 2 marker: Chang’e-3(Pg14),Security Transaction Tax(Frontpage), Counterveiling Duty(Pg13).

I found only these items to be useful in Saturday’s paper. If you could spot some thing more which is relevant to CSE please feel free to post in comments section.

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