India may be a poor country but we all differ on what "poor" is. There was a furore last year when a per-capita income of Rs. 32 a day was considered "poor" — because Rs. 32 buys you nearly nothing these days. But that is hardly true if you consider the average size of a household is four, and that this means the per-household line for poverty is Rs. 128 per day. There is a more substantial Rs. 3,800 per month, a figure that most of the people, who were outraged at the Rs. 32 per day, will find their household help earns per month. (And in fact, around what the much-maligned rural employment guarantee scheme provides for one household member for 100 days a year)

"Poor" is what you make of it. At a broad level, being poor means the inability to afford what one would consider a basic necessity or standard of living. What I might consider a basic necessity will be different from someone else's; if I think access to clean toilets are a basic human need, someone else might argue that there

Budget Provisions

• Personal income tax exemption limit for general category raised to Rs 2 lakh from Rs 1.8 lakh. Upper limit raised from Rs 8 lakh to Rs 10 lakh for 20% tax bracket.

• Service tax rate raised from 10% to 12%.

• The official amendment to "The Insurance Laws (Amendment) Bill, 2008" will be moved in this session of the Parliament.

• It is proposed to reduce the threshold of premium payable to 10% of the actual capital sum assured from 20% of the actual capital sum assured.

• It is proposed to amend the provisions to provide that the deduction for life insurance premium as regards insurance policies issued on or after 1st April, 2012 shall be allowed for only so much of the premium payable as does not exceed 10% of the actual capital sum assured.

• Within the existing limit for deduction allowed for health insurance (Rs 15000 for individuals and Rs 20000 for senior citizens), deduction of upto Rs 5000 allowed for preventive health check-up

• Setting

The leather industry is thankful to the Hon'ble Union Minister Finance for announcing certain major schemes for the benefit of the leather industry in the Union Budget 2012-13.

Budget Provisions:

• Setting up of dormitories for women workers in the 5-mega clusters relating to handloom power looms and leather sectors.
• The exemption limit of Central Excise duty available to non-leather footwear is being increased from MRP Rs 250 to Rs 500.For non-leather footwear exceeding Rs 500, the applicable duty is increased from existing 10% to 12%.
• The rate of service tax is being increased from 10% to 12%.
• The basic excise duty enhanced from 10% to 12%.
• Exemption of Service tax has been extended with retrospective effect from 16.6.2005 to the Common Effluent Treatment Plants (CETPs) set up with the assistance of Central or State Government in the leather industry.

Budget Impact:

Enhancing the limit of excise duty exemption for non-leather

Budget Highlights:

• General excise duty rate is being enhanced from 10% to 12%.
• Basic customs duty on Titanium dioxide classified under CTH 2823 00 10 is being reduced from 10% to 7.5%.
• During the Twelfth Plan period, infrastructure investment will go up to Rs 50 lakh crore.
• So as to encourage housing loans the Government has also Enhance provisions under Rural Housing Fund from Rs 3000 crore to Rs 4000 crore, Extend the scheme of Interest subvention of 1% on housing loans up to Rs 15 lakh where cost of house does not exceed Rs 25 lakh for another year.
• No change in corporate tax.

Budget Impact:

The Government has considered industry plea of cut customs duty on Tio2 which is a positive for the Paint industry amidst spike in the Tio2 prices. However, the general increase in the excise duty from 10% to 12% will result in higher excise incidence, and needs to be passed on through hike in paint prices.

Scrips to watch:

Asian Paints, Kansai Nerolac, Berger Paints, Akzo Noble etc

Outlook:

Two-wheeler and three-wheeler goods carrier demand will be indirectly aided by increased agriculture credit and additional subvention on farm loans

Budget Highlights

• Increased excise duty by 2% to 12% on both two wheelers and three wheelers.
• Basic customs duty on non-alloy HR and CR coils hiked from 5% to 7.5%. HR. This can lead to more pricing power for steel, and increase in steel cost of the auto sector.
• Target for agricultural credit raised by Rs 1, 00,000 crore to Rs 5, 75,000 crore in FY 2012-13.
• Interest subvention scheme for providing short term crop loans to farmers at 7% interest per annum to be continued in 2012-13. Additional subvention of 3% available for prompt paying farmers.
• Plan Outlay for Department of Agriculture and Co-operation increased by 18%.
• Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to Rs 9,217 crore in FY 2012-13. Further Rs 300 crore has been allocated to Vidarbha Intensified

The shipping sector is already going through a down cycle.  Now it has got a shocker from the Union Budget 2012-13. The shipping industry unlike other industries attracts tonnage  tax and the budget has proposed to increase the tonnage tax by more than 50% on various class of tonnage effective  from April 1, 2013. Under the tonnage tax scheme, the operating profit of a shipping company is determined on the basis of tonnage capacity of its ships.

Budget proposal

Budget Provisions

Change in Excise duty

The excise duty structure on cement manufactured and cleared in packaged form is being rationalized. The graded RSP slabs for the purpose of charging of duty on cement manufactured and cleared in packaged form are being done away with. The rates on cement and cement clinkers are also being revised as under:

National Association of Software and Services Companies (NASSCOM) today expressed its disappointment on the Union Budget Proposals 2012-13, terming the budget proposal as a 'lost opportunity' for the economy.

Budget 2012 is disappointing on various counts — there is no focus on putting the economy on a high growth trajectory; fiscal deficit reduction is through higher taxation, rather than expenditure management; there is no roadmap on implementation of DTC and GST; and also issues of tax simplification, litigation have not been addressed. The continuing uncertain business environment will be negative for investment and hence for growth as well. Equally important, given the current account deficit, there is need to provide a strategic thrust on high value exports; this aspect has been totally ignored.

While the focus on infrastructure through various schemes is positive, the increase in indirect taxes both service tax and excise is a setback. For the USD 100 billion IT-BPO Sector,