budget 2011(full final)
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Budget 2011
(Service Sector)
Prepared By:
Manoj Chejara
Sagar Pandey
Vijaykumar Gupta
Pankaj Panchmukh
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Union Budget:
Pranab Mukherjee's budget speech was 80th in India's history
1st Union Budget -- R K Shanmukham Chetty; 26th nov,1947.
12.58-trillion rupee ($273.4 billion) budget
Mr. Mukherjee expects:
Net revenue loss of115 billion rupees from changes in direct taxes Net revenue gain of113 billion rupees from amendments to indirect
taxes
The overall net tax revenue is likely to be 6.64 trillion rupees.
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OVERVIEWOFTHE ECONOMY
Gross Domestic Product (GDP) -- 8.6 per cent growth rate in 2010-11
Continued high food prices have been principal concern this year.
Consumers denied the benefit ofseasonal fall in prices despiteimproved availability of food items, revealing shortcomings in
distribution and marketing systems.
Monetary policy measures taken expected to further moderate
inflation in coming months.
Exports have grown by 29.4 per cent, while imports have recorded a
growth of17.6 per cent during April to January 2010-11 over the
corresponding period last year.
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Total Receipts/Expenditure
Revenues
Earnings
Tax Revenue
Non-Tax
Reven
ue
Borrowings
Debt Receipts
Capital
Receipts
Non-DebtReceipt
Expenditure
LeakyExpenditure
Subsides
Defense
Central Planoutlay
Others
Non LeakyExpenditure
Grants toStates/UT
Assistance to
State Plan
s
InterestPayments
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Service Sector
India stands out for the size and dynamism of itsservicessector
Contribution :55.2% share in GDP
Growing by 9% annually
Contribute quarterof total employment
Accounting for a high share in foreign direct investment (FDI)inflows
Overone-third of total exports ; (27.4%) export growth throughthe first half of 2010-11.
Servicessector likely to register9.6% growth ;despite globaldeceleration
Indian economy 2nd fastest growing in the services growthwith 8.9% , behind china (10.5 per cent).
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Statistical Data:
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Services Category:
Transport Services:
Shipping
Port Services
Storage Services
Business Services: I.T
Accounting & Auditing services
R & D
Legal Services
Consultancy
Social Services:
Healthcare
Education
Sports
Tourism Hotels & Restaurants
Telecom & Related Services
Real Estate Services
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Service Sector (9%) Trade, hotels, transport, and
communication (11%)
Financing, insurance, real estate, and
business services (10.6%) Community, social and personalservices (5.7%)
Construction sector (8%)
IT BPO services (19.5)
Domestic IT related services (22.8%)
Growth Rate
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Source : Economic Survey 2010-11
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FDI ( Foreign Direct Investment)
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Service Tax:
Hotel accommodation in excess of Rs1,000 per day
Standard rate retained --- Seeking closer to its GSTsuccessor.
Proposals estimated to result innet revenue gain of Rs 4,000 crore.
Tax on all services provided by hospitals with 25 or more beds with facility of
central air conditioning.
Service Tax on air travel both domestic and international raised.
Services provided by life insurance companies in the area of investment and
some more legal services proposed to be brought into tax net.
All individual and sole proprietor tax payers with a turn over upto Rs 60 lakh
freed from the formalities of audit.
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Exemptions:
Business exhibition service - - exhibition held outside India will beexempt.
Abatement of 25% -- on transport of goods through coastal andinland shipping
Works contract service -- JawarhlalNehru National Urban RenewalMission & Rajiv Awaas Yojna
Services provided to Rashtriya Swasthya Bima Yojana under GeneralInsurance.
Modified scheme for refund ofservice tax to SEZ units anddevelopers which will supersede the earlier notification
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Banking:
SBI to get the freedom to reduce itsstake in itssubsidiaries to 51%
Microfinance companies may see better fund flow
PSU banks to get capital support ofRs 6,000 cr
India banks on IT to reboot key projects
RBI to issue guidelines on new banking licenses
Stocks to Watch Out:
SBI, Axis bank, Yes Bank, Oracle Financial Ser-vices
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Education:
100% hike in Anganwadi workers' wages Education gets 24% hike in budget allocation
The allocation for Right to Education was
meanwhile hiked by 40 percent. The Indian Institute ofTechnology ,Kharagpur
will get Rs.200 crore as a one-time grant.
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Telecom:
Telecom sector is one of the fastest growing sectors in India--- Compound annual growth of34% over the last decade ---
India as already reac ed t e 500 million subscriber-base
Telecom sector revenue at Rs 29,648.33 cr
Telecom companies disappointed at 'discouraging' budget
3G, broadband wireless access frontiers for growth
Telecom revolution yet to reach over62,000 villages
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Transport
Airlines to pass on service tax increase
Air India to get Rs1,200 cr fresh equity
Northeast to get Rs93 crfor airport development
Cos cheer Mamta's decision not to hike freight rates
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Infrastructure:
Budgeted spending -- Rs2,14,000cr-- hike of over23% from Rs
1,73,000cr during 2010-11.
Allocation forBharat Nirman is proposed to be increased by Rs.
10,000 crore over the current fiscal at Rs.58000 cr
Allocation for infrastructure stands at 48.5% of Gross Budgetary
Support to plan expenditure
Tax Free Bond of Rs.30000crto boost infrastructure development
in railways, ports, housing and highways.
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Media & Entertainment:
Relief for cinema industry as film rolls getsduty rebate
Prasar Bharti's budget decreased
Media cosseekhigherFDI, lower taxes to aid growth
Future of entertainment: Web Integration with TV
BCCL forms JV forTV channels distribution
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