Finance Minister Pranab Mukherjee today said the Government proposes to introduce the Constitution Amendment Bill in the current session to pave the way for introduction of the long-awaited Goods and Services Tax (GST) regime.

"I propose to introduce the constitution amendment bill in this session of Parliament," Mukherjee said in his Budget speech 2011-12.

The government originally planned to roll out GST from April 1 last year but a consensus could not be reached on the introduction of the Bill, which needs to be passed by two-third majority in both the Houses of Parliament.

In its latest GST constitution amendment draft -- the third of so far -- the Centre has proposed to give powers to Parliament for constituting the GST council.

The earlier two drafts had to be changed because of opposition by some states to them, who said the Bill would curb their fiscal autonomy.

GST would subsume most of the central and state taxes like excise and sales tax, making rules easier for the industry and other tax payers.

Low-cost housing loans of Rs 15 lakh to get 1% interest sop

(PTI) The government today said low- cost housing loans of Rs 15 lakh will be eligible for one per cent interest subsidy, which will help in increasing the demand for such housing.

In his Budget speech, Finance Minister Pranab Mukherjee said he is liberalising the existing scheme of one per cent interest subvention on housing loans up to Rs 15 lakh, where the cost of house does not exceed Rs 25 lakh.

The existing interest subsidy is on loans of Rs 10 lakh where the cost of house is Rs 20 lakh.

"To further stimulate the growth in housing sector, I am liberalising the existing scheme of interest subvention on 1 per cent on housing loans by extending housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, from the present limit of Rs 10 lakh and 20 lakh respectively," Mukherjee said.

Farm, services sector push economic growth to 8.2% in Q3

(PTI) Driven by good performance of agriculture and services sector, the Indian economy grew by 8.2 per cent in the third quarter of the current fiscal, up from 7.3 per cent in the corresponding period a year ago.

According to the data released by the government today, farm sector during the third quarter ending December, recorded a growth rate of 8.9 per cent, up from a decline of 1.6 per cent in the corresponding period a year ago.

The services sector, including financing, insurance, real estate and business services during the same period recorded a growth rate of 11.2 per cent as compared to 8.5 per cent during the same period last year.

Electricity, gas and water supply is another sector that has done well as it grew at the rate of 6.4 per cent in third quarter compared to 4.5 per cent in the same period last fiscal.

Mining and quarrying growth jumped to 6 per cent in third quarter from 5.2 per cent in the same three-month period last fiscal.

Manufacturing and construction activity has slowed down, growing at pace of 5.6 and 8 per cent cent, respectively, in the three- month period as against 11.4 and 8.3 per cent respectively in the corresponding quarter.

The government expects the growth to top 8.5 per cent in the current fiscal. The growth rate for the first and second quarters was unchanged at 8.9 per cent each.
 

Direct cash subsidy on fuel, fertilizers by March, 2012

(PTI) Concerned over the misuse of subsidies provided under various schemes, Finance Minister Pranab Mukherjee today said the government will provide a direct cash subsidy on kerosene and fertilisers to the poor from March next year.

"... To ensure greater cost efficiency and better delivery for both kerosene and fertilizer, the government will move toward direct transfer of cash subsidy for people below poverty line (BPL) in a phased manner," Mukherjee said during his presentation of the Budget 2011-12.

The system will be in place by March, 2012, he said.

A task force headed by Nandan Nilekani is working out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers, he said.

"The interim report of this task force is expected by June this year," he said.

At present, the government provides kerosene at subsidised rates to families living below the poverty line through the Public Distribution System (PDS). Furthermore, LPG is provided at a subsidised rate to households.

As regards fertilisers, the government provides subsidy to companies so that farm inputs, which include urea and imported fertilisers, can be provided to farmers at cheaper rates.

Earlier this month, the government set up a task force under the former chief of Infosys, Nilekani, who at present is Unique Identification Authority of India (UIDAI) Chairman. The panel also included secretaries from the ministries of finance, chemicals and fertilisers, agriculture, food, petroleum and rural development.

The need to set up the task force arose in view of "overwhelming evidence that this (current) policy is resulting in waste, leakage, adulteration and inefficiency. Therefore, it is imperative that the system of delivering the subsidised kerosene be reformed urgently," the government had said.

Besides designing an IT framework, the task force will align the systems with the issuance of the UID numbers and suggest changes in the administration and supply chain management.

The recommendations of the task force will be implemented on a pilot basis by the concerned ministries and the final report would include the results of such projects.

Farm loans at 4 pc; credit target raised to 4,75,000 cr

(PTI) In a bonanza to the farming community, the government today announced loans at interest rate of four per cent -- three per cent less than market rate -- for farmers who pay their dues in time and raised the credit target for farm sector by Rs 1 lakh crore.

"The existing interest subvention scheme of providing short-term crop loans at seven per cent interest rate will continue during the 2011-12 fiscal," Finance Minister Pranab Mukherjee said in Budget proposal

He also said the credit target for the agriculture sector has been increased by Rs one lakh crore to Rs 4,75,000 crore.

Also, banks have been asked to focus on farm credit lending to small and marginal farmers, he added.

"In the last Budget, I had provided an additional two per cent interest subvention to those farmers who repay their crop loan on time. In order to provide further incentive to these farmers, I propose to enhance the additional subvention to three per cent in 2011-12. The effective rate of interest for such farmers would be four per cent," he said.

Faced with high food inflation and the country's dependence on import of pulses and edible oil, the Finance Minister also announced various schemes for promoting production of vegetables, pulses, oilseeds, fodder and nutrition-rich crops like millets and maize.

O T H E R  H I G H L I G H T S

Budget estimates for 2011-12 projects Rs 9,32,440 crore - an increase of 24 per cent, says FM.

Fiscal deficit brought down from 5.5 per cent to 5.1 per cent in 2010-11. In 2011-12, it will be 4.6 per cent, says Mukherjee.

Revenue deficit fixed at 2.3 per cent in revised estimates of 2010-11 and 1.8 per cent in 2011-12, says FM.

Total plan expenditure will go up 100 per cent in nominal terms in the next year, says FM.

Net tax to Centre will be Rs 6,64,457 crore. Non-tax receipts pegged at Rs 1,25,435 crore, says FM.

Minimum alternate tax raised from 18 per cent to 18.5 per cent of book profits.

Extension of investment on long-term infrastructure bonds by one more year.

Goods and Services Tax Bill to be introduced in Parliament this year, says FM.

Govt to move towards direct cash transfer of cash subsidy as regards kerosene, LPG and fertilisers from March 2012 in view of large diversion: FM.

Government to keep up tempo of disinvestment process, says Mukherjee.

Discussions on to further liberalise FDI policy, says Mukherjee.

Portfolio investment would be permitted in SEBI registered mutual funds from foreign subscriptions: Mukherjee.

Rs 6,000 cr to be given to public sector banks to maintain capital-to-risk assets ratio norms, says Mukherjee.

Indian micro finance equity with SIDBI to be formed at Rs 100 crore, says Mukherjee.

Proposal to increase rural housing fund to Rs 3,000 crore.

Government plans to create a Women Self Help Group development fund with a corpus of Rs 500 crore.

Allocation under Rashtriya Krishi Vikas Yojana to be raised from Rs 6755 crore in the current year to Rs 7860 crore: FM.

Rs 300 cr provided to promote pulses cultivation in rain-fed areas, another Rs 300 cr to promote farm product cultivation: FM.

Credit flows to farmers raised from Rs 3.75 lakh crore to Rs 4.75 lakh crores, says Mukherjee.

Government proposes to promote organic farming methods to enable farmers get best from their land.

Existing interest subvention scheme on short term farm loans at 7 % interest to continue: FM.

NABARD capital base to be strengthened; Rs 10,000 cr to be provided to it as short term credit fund.