BUDGET and MULNIVASI BAHUJAN SAMAJ


The Union Budget of India, referred to as an annual Financial Statement in Article 112 of the Constitution of India is an annual budget of the Republic of India, which is presented each year by the Finance Minister of India in the Parliament. The Union budget has to be passed by the House before it can come into effect on April 1, the start of India’s financial year. The Union budget of India lays down guidelines and pronouncements on different types of taxes, financial allocations for various heads, and developmental plans for different sectors. Budget is also an important source of information on government finances i.e. which way that’s heading. Every year before the budget is presented; there are expectations from people all over the country; industry and the masses alike. The Union Budget matters to you whoever you are — a Salaried person, an Investor, a Businessman, a farmer, labour or a House Wife. Directly or indirectly, budget proposals affect us all.
The Union Budget 2012-13 will be presented on 15th March 2012 by the Union Finance Minister Pranab Mukherjee. It is the need of time before this budget is put before the Mulnivasi Bahujan Samaj, we should understand what Budget is and what terms are normally used in Budget and its analysis. A small attempt has been made to get brief info about Budget.
What is Budget ?
Budget is a financial plan and a list of all planned expenses and revenues
What is GDP?
Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period
GDP per capita is often considered an indicator of a country’s standard of living
GDP = private consumption + gross investment + government spending + (exports − imports), or

What is Inflation?
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
What is Sensex?
SENSEX is the short term for the words “Sensitive Index”. It is the barometer of the Indian stock market. It is the unit to measure the ups and downs in the Indian stock market. It is based on globally accepted construction and review methodology. Sensex is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies.
How Sensex is calculated?
Example : – Suppose the Index consists of only 2 stocks: Stock A and Stock B.
Suppose company A has 1,000 shares in total, of which 200 are held by the promoters, so that only 800 shares are available for trading to the general public. These 800 shares are the so-called ‘free-floating’ shares.
Similarly, company B has 2,000 shares in total, of which 1,000 are held by the promoters and the rest 1,000 are free-floating.
Now suppose the current market price of stock A is Rs 120. Thus, the ‘total’ market capitalisation of company A is Rs 120,000 (1,000 x 120), but its free-float market capitalisation is Rs 96,000 (800 x 120).
Similarly, suppose the current market price of stock B is Rs 200. The total market capitalisation of company B will thus be Rs 400,000 (2,000 x 200), but its free-float market cap is only Rs 200,000 (1,000 x 200).
So as of today the market capitalisation of the index (i.e. stocks A and B) is Rs 520,000 (Rs 120,000 + Rs 400,000); while the free-float market capitalisation of the index is Rs 296,000. (Rs 96,000 + Rs 200,000).
The year 1978-79 is considered the base year of the index with a value set to 100. What this means is that suppose at that time the market capitalisation of the stocks that comprised the index then was, say, 60,000 (remember at that time there may have been some other stocks in the index, not A and B, but that does not matter), then we assume that an index market cap of 60,000 is equal to an index-value of 100.
Thus the value of the index today is = 296,000 x 100/60,000 = 493.33
This is how the Sensex is calculated.
The factor 100/60000 is called index divisor.
Expectations & Latest Developments-Indian Budget 2012-13 Highlights:
• Centre is planning to increase the income tax exemption for up to Rs 3 lakh paid as interest on housing loans in one year as compared to the current limit of Rs 1.5 lakh with the aim to strengthen housing sector credit.
• The tax exemption slab is expected to be increased from the present Rs 1.8 lakh to Rs 3 lakh, in case the proposed recommendation of a Yashwant Sinha-led parliamentary standing committee on finance get cleared in the Union Budget for the year 2012-13.
• Agriculture Ministry has demanded lowering of interest rate on crop loans to 3% for those farmers who pay in time, from the existing 4%.
• The micro, small and medium enterprises (MSMEs) sector is seeking separate consultations with them in the run-up to the Union Budget 2012-13.
• Stock exchanges have pitched for abolition of the Securities Transaction Tax (STT) on equity trades.
• Ministry of Petroleum & Natural Gas has requested the Union Finance Ministry to lower the excise duty on branded diesel in the upcoming Budget due to the strong decline in the sale of the fuel.
• Companies Bill is expected to be unveiled in Budget Session
• Union Budget 2012 is expected to witness Union Finance Minister Mr Pranab Mukherjee attempt to push the entrepreneurs for more investment by introducing major investor-friendly policies.
• The Central government may incentivise the pharma sector to boost the higher spending in research and development and also to lower the taxes and duties on life saving drugs and active pharmaceutical ingredients (API) to offer fillip to the growth of the industry
• Centre may unveil a series of measures in the Union Budget 2012-2013 to help the export sector and also the micro, small and medium enterprises (MSMEs) in India.
• Association of Biotechnology Led Entrepreneurs (ABLE) has demanded various fiscal and tax incentives from the Union Budget.
• Fiscal consolidation to be launched:
The Deputy Chairman of the Planning Commission of India, Dr. Montek Singh Ahluwalia, stated that the Ministry of Finance is thinking about introducing the fiscal consolidation in the forthcoming Union Budget 2012-2013.
For people who have not heard the expression fiscal consolidation before, fiscal consolidation is a strategy which is targeted to lowering the shortfalls of the government and piling up of debt. Fiscal consolidation is one of the taxation and financial markers of the Central Government. It is constantly utilized to lower the fiscal shortfalls of the nation
Expectations of Mulnivasi Bahujan Samaj From Indian Union Budget 2012-13:
a) To control the increasing prices for essential commodity
b) To curb the private school fees, so that common man can get the best education.
c) To get best medical treatment at speciality houspitals in a minimum charges
d) Subsidy on Gas, Oil, Fertilizer, Food etc.
e) Subsidies in FDI norms in sectors like Retail, Media and BFSI etc.
f) Relaxation in service taxes.
g) Tax reforms like implementation of GST and DTC
h) A person of 60 years of age is defined as Senior citizen. But in income tax rule a Sr Citizen of 65 years of age is eligible for tax rebate. Why!
i) A member parliament is allowed to make tax free earning of about Rs. 10 lacks in a year by the same income tax rule. Then why for common men it so small an amount?
j) Govt.should contain fiscal deficit and control corruption. Corrupt officials and politicians should be jailed and their wealth used for reducing fiscal deficit. Govt. should not involve in populist waists such as subsidised food for all. All subsidies should be well targeted and should reach the real needy.
k) To control food inflation export of all primary food products should be banned and all export subsidies should be withdrawn. Exporter-IAS- Politician nexus in defrauding the country for their selfish motives should be exposed and stopped.
l) Up gradations of hospitals and opening new super specialist hospitals at different part of country for Mulnivasis.
m) Major announcement for aid to woman educations and adult educations in rural area
n) Special announcement for farmers in term of agri insurance, Agricultural equipment
o) Minimum wages target should be increase
p) Total loan waiver for the marginal farmers possessing small piece of land. Special rebate in buying Agri cultural equipment and tools
q) Will India manage 24/7 power for each and every Indian citizen?
Other terms that are used in Budget.
Bill :- It is a well drafted legislative proposal that later becomes an Act on being approved by both the Lok Sabha and Rajya Sabha.
Budget Estimates :– These are assessment of expenditure by the government for a year. This also includes the estimate of Revenue Deficit and Fiscal Deficit for the year
Custom Duties :- These are levies that are incurred from the goods exported from or imported to the country.
Direct Taxes :- These are taxes that are implied directly on the individuals or customers. Corporate tax and Income tax are direct taxes.
Disinvestment :- Government makes a number of investment in public sector undertakings. But when it dilutes its stake in these undertakings, it is defined as disinvestment
Excise Duties :- The foods manufactured within the country are imposed with some duties. Those duties are known as Excise duties.
Fiscal Deficit :- The sum found on calculating the difference of Revenue Receipts and Total Expenditure.
Indirect Taxes :- Taxes imposed on goods that are manufactured, imported or exported. Eg. Excise Duties, Custom Duties etc.
Subsidies :- The Central Government extends monetary aid either to a group of individuals or individual in order to enhance their business skills.
Value-Added Tax :- It is a tax that is imposed on a company or firm in respect of the percentage of its value added. This tax is implied to prevent the increasing effects of taxes through the different production processes. The sum determined by finding the difference between value of inputs and outputs is the basis of the value-added tax.

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