Budgets India: Looking back 5 times

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Reuters: Feb 27 2013, 11:07 IST

Budgets India: Flashback. The countdown has begun for the biggest business and economic event of the year, the release of the annual Budget on February 28, and finance minister P Chidambaram has a tough job on his hands. With general elections a year away, he must please voters, boost growth and control deficits. As the economy battles slowing growth, investors will take cues from Chidambaram’s plans to rein in spending and boost growth. Here’s a look at Budgets between 2008 and 2012 — the hits, the misses and how they affected the common man.

2012 : Finance minister: Pranab Mukherjee

Highlights

Projects a decline in the fiscal deficit to 5.1% of GDP in 2012/13. GDP expected to grow at 7.6%.

Controversial proposal to retrospectively tax cross-border transactions in which the underlying assets are located in India. The move amounts to a push to get foreign companies that have invested millions in India to pay more taxes. Or in India’s words, it’s supposed to “counter aggressive tax avoidance schemes”

Service tax rate raised to 12% from 10%, double basic customs duty on gold

No change in corporate tax rates. Personal taxation: minimum threshold of income not chargeable to tax increased to R200,000.

The 30% tax slab applicable on income above R10,00,000.

Market reaction on Budget day

The Sensex fell 210 points (1.2%) to close at 17,466 as the Budget was seen as too modest for a corporate sector looking for more concessions. During trade, the index fell nearly 250 points.

Rating agency reactions

Standard & Poor’s said the Budget was “mildly negative”

... contd.

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