2012 Union budget of India

The 2012 Union budget of India was presented by the Finance Minister Pranab Mukherjee on March 16, 2012.^[1] This budget was presented in a challenging backdrop of slowing domestic growth, high inflation, and global economic uncertainty stemming from the Eurozone crisis.^[2][3] The budget aimed to revive growth, control inflation, and move towards fiscal consolidation.^[4]

2012 Union Budget of India

Emblem of India
Submitted	March 16, 2012
Submitted by	Pranab Mukherjee, Finance Minister
Party	INC
Website	http://www.indiabudget.nic.in Official Site
‹ 2011 2013›

Background

The Indian economy had experienced a slowdown in the fiscal year 2011-12, with GDP growth decelerating from the preceding years. The Economic Survey 2011-12, tabled just before the budget, estimated growth at 6.9%, a significant drop from the 8.4% recorded in 2010-11.^[2] Persistently high inflation, particularly in food prices, remained a major concern and leading to protests over corruption and price hikes.^[5][6] The fiscal deficit was also under pressure, exceeding the initial budget estimates for 2011-12^[5] along with subsidy spending reaching up to 2.5% of the GDP.^[6] Globally, the sovereign debt crisis in Europe added to economic uncertainty and impacted capital flows.^[3] The government faced criticism over policy inaction, sometimes termed 'policy paralysis',^[7] which was seen as hindering investment and growth.^[8]

Highlights

Notable changes included:^[9]

• No change in corporate tax rates
• Exemption limit on individual tax raised to 200,000₹
• Service tax raised from 10% to 12%
• Defence spending increased by 18%
• Excise duty raised from 10% to 12%
• Full exemption on import duty of thermal coal for power plants
• Customs duty on gold doubled

Reactions

The budget proposal was widely criticized to be a "play-it-safe",^[5] "too-conservative"^[10] budget with no big reforms or policy changes.^{[6][3][11][12]}