Indian Budget 2011-12
Shri Pranab Mukherjee, Minister of Finance- February 28, 2011
HIGHLIGHTS- Indian Budget 2011-2012
To quickly revert to the high GDP growth path of 9 per cent and then find the
means to cross the ‘double digit growth barrier’.
To harness economic growth to consolidate the recent gains in making development
To address the weaknesses in government systems, structures and institutions at
different levels of governance.
OVERVIEW OF THE ECONOMY
India among the first few countries in the world to implement a broad-based
counter-cyclic policy package to respond to the negative fallout of the global
The Advance Estimates for Gross Domestic Product (GDP) growth for 2009-10
pegged at 7.2 per cent. The final figure expected to be higher when the third and
fourth quarter GDP estimates for 2009-10 become available.
The growth rate in manufacturing sector in December 2009 was 18.5 per cent – the
highest in the past two decades.
A major concern during the second half of 2009-10 has been the emergence of
double digit food inflation. Government has set in motion steps, in consultation
with the State Chief Ministers, which should bring down the inflation in the next
few months and ensure that there is better management of food security in the
With recovery taking root, there is a need to review public spending, mobilise
resources and gear them towards building the productivity of the economy.
Fiscal policy shaped with reference to the recommendations of the Thirteenth
Finance Commission, which has recommended a calibrated exit strategy from the
expansionary fiscal stance of last two years.
It would be for the first time that the Government would target an explicit reduction
in its domestic public debt-GDP ratio.
On the Direct Tax Code (DTC) the wide-ranging discussions with stakeholders
have been concluded – Government will be in a position to implement the DTC
from April 1, 2011.
Centre actively engaged with the Empowered Committee of State Finance Ministers
to finalise the structure of Goods and Services Tax (GST) as well as the modalities
of its expeditious implementation. Endeavour to introduce GST by April, 2011
People’s ownership of PSUs
Ownership has been broad based in Oil India Limited, NHPC, NTPC and Rural
Electrification Corporation while the process is on for National Mineral
Development Corporation and Satluj Jal Vidyut Nigam. This will raise about
Rs 25,000 crore during the current year.
Higher amount proposed to be raised during the year 2010-11.
Foreign Direct Investment
Number of steps taken to simplify the FDI regime.
Methodology for calculation of indirect foreign investment in Indian companies
has been clearly defined.
Complete liberalisation of pricing and payment of technology transfer fee and
trademark, brand name and royalty payments.
Financial Stability and Development Council
An apex level Financial Stability and Development Council to be set up with a
view to strengthen and institutionalise the mechanism for maintaining financial
This Council would monitor macro-prudential supervision of the economy,
including the functioning of large financial conglomerates, and address interregulatory
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