Highlights: 2012/13 Budget presented to parliament

                                                                                
Finance Minister Pranab Mukherjee presented the union budget to parliament on Friday for the coming financial year beginning in April.
FINANCE MINISTER ON GOVERNANCE
"We have to accelerate the pace of reforms and improve supply side management of the economy."
FISCAL DEFICIT
* Fiscal deficit seen at 5.9 percent of GDP in 2011-12
* Fiscal deficit seen at 5.1 percent of GDP in 2012-13
BORROWING
* Net market borrowing seen at 4.8 trillion rupees in 2012-13
SPENDING

* Total expenditure in 2012-13 seen at 14.9 trillion rupees, up 29 percent
* Plan expenditure budgeted at 521.25 billion rupees in 2012/13, up 18 percent

POLICY REFORMS
* Hope to achieve "broad-based consensus" to open multi-brand retail sector to foreign investors
* Allow external commercial borrowing of up to $1 bln to raise working capital for airlines industry for 1 year
* To allow qualified foreign investors in Indian corporate debt markets
* To allow external commercial borrowing to part finance rupee debt in power projects
* Proposes to remove sector-specific restriction on venture capital fund investments
SECTOR SPENDING
* Allocates 1.94 trillion rupees for defence in 2012/13, up from 1.64 trillion rupees in previous year
INFRASTRUCTURE DEVELOPMENT
* To award contracts to build 8,800 km of roads in 2012/13
* Govt doubles allocation for tax-free bonds to 600 billion rupees for financing infrastructure projects in 2012/13


REVENUE
* Proposes to raise service tax rate to 12 percent from 10 percent
* Gross tax receipts seen at 10.8 trillion rupees in 2012-13
* Non-tax revenue seen at 1.64 trillion rupees in 2012-13
* Proposes to levy tax on all services except 17 items in the negative list from 2012/13
* No change in corporate tax rates
* To enhance tax exemption limit to 200,000 rupees for individuals income in 2012/13
GROWTH AND INFLATION EXPECTATIONS
* Expect headline inflation to moderate in next few months and remain stable thereafter
* Economy expected to grow at 7.6 percent in 2012/13, plus or minus 0.25 percent
* Economy expected to grow at 6.9 percent in 2011/12
* Signs of economy turning around in March quarter
DISINVESTMENT
* Disinvestment target in 2012-13 of 300 billion rupees
* Expects country to become self-sufficient in urea production in five years
* Proposes to raise agricultural credit target in 2012/13 to 5.75 trillion rupees
SUBSIDIES
* To keep 2012/13 subsidies under 2 percent of GDP
* To inject 159 billion rupees to capitalize state-run banks in 2012/13
CURRENT ACCOUNT
* Current account deficit seen at 3.6 percent of GDP in 2011/12
* Expect smaller current account deficit in 2012/13