The government is looking so serious in to the issues of supply chain bottlenecks a measure to control inflation. It’s the Government’s push to facilitate storage and reduce the production and supply chain bottlenecks in the agricultural sector. A perfect execution of these measures will bring down the price difference between whole sale and retail chains and also an effective pricing for farmers.

Also we can see a planned approach to alternate edible oil resource development through palm oil outlays and it’s heartening to see agricultural inclusion of eastern regions as well…

Few snippets from the budget:

• The total plan outlay for agriculture & allied sector is 147.44 bn an increase of 19 %.
• Increase in  corpus of RIDF (Rural Infrastructure Development Fund) to 180 bn wherein the additional allocation would be dedicated to creation of warehousing facilities.
• Interest subvention proposed to be enhanced from 2% to 3% for providing short-term crop loans to farmers who repay on time.
• Capital base of NABARD to be strengthened by 30 bn in a phased manner, enhancing credit flow to farmers/agriculture.
• An allocation of 13.50 bn for National Food Security Mission.
• An allocation of 7.80 bn for Macro Management in Agriculture.
• An allocation of Rs11.50 bn for National Mission on Micro Irrigation.
• An allocation of Rs7 bn for National Agricultural Insurance Scheme including 1.50 bn for Modified national Agriculture insurance scheme.
• Focus on supply chain efficiency for items like fruits and vegetables, milk, meat, poultry and fish.
• Rs.4 Bn allocated for eastern states for agricultural developments, focussing on rice based plantations.
• An allocation of Rs3 bn to bring 60,000 hectares under oil palm plantations – an initiative to yield about 3 lakh metric tonnes of palm oil annually in five years.
• Rs 3 Bn towards Vegetable cultivation initiatives
• An allocation of 3 bn provided for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.
• Promotion of organic farming methods, combining modern technology with traditional farming practices.
• An approval being given to set up 15 more Mega Food Parks during FY12.
• Augmentation of storage capacity through private entrepreneurs and warehousing corporations has been fast tracked.
• Extended full exemption from excise duty to air-conditioning equipment and refrigeration panels for cold chain infrastructure.
• Include conveyor belts in the full exemption from excise duty to equipments used in cold storages, mandis and warehouses.

the only comfort is the removal of tax filing …

Tax payers

If you are getting salary and TDS is done, no need to file tax from this year. If you have any other income, other than salary, you need to file the returns, otherwise, the Form 16 which u receive from ur company is sufficient.

New tax slabs:

Std deduction to be raised to 1.8 lacs- so we save Rs.2000/- in tax directly.

So, if your salary is 9 lacs per annum;

The tax would be;

And , if you are a senior citizen, then , the tax exemption goes up by another ten thousand rupees; from 2.4 lacs to 2.5 lacs per annum.;

And keeping in mind the poor CM’s who still wants to rule the country even after 80 years of age, the FM (one of the probable contestant in the future J ) announced a special category of tax payers- super senior citizen, where the tax exemption limit will be upto 5 lacs per annum.

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• Since, DTC implementation is getting postponed, you can enjoy the ELSS ( tax saving mutual funds), benefits for another year.
• The tax exemption for  investments in infra bonds for 20,000 is still applicable .
• Investment related Insurance products will cost more , since they are included in service tax net.

The underlining issue in budget is to address the issues of inflation and to roll up the sleeves to maintain the growth momentum, and to achieve the targeted fiscal consolidation, and achieve greater revenue ( or u can say to unlock potential ) from disinvestments..
Though the government/budget/few economists say that increase in infrastructure allocations will help in moving that sector to greater heights, it might not lead to a bubble in Infra sector.. but if managed well, this will improve the connectivity to greater heights..
On a overlook, budget gives a lot of hope by focussing on Three life line sectors of education, Infrastructure and Agriculture- which for sure will address the issues in the longer and medium term.
Few bold decisions can be seen in the budget.. new fertiliser policy for urea, direct transfer of cash subsidy to BPL people for better delivery of kerosene, LPG and fertiliser, liberalisation of the FDI policy etc.. but there are few disappointers as well.. Rescheduling the implementation of Direct Tax Code (DTC) and Goods and Service Tax (GST) by April 2012 sends a signal on the weak admin system and implementation plans of Indian government.. ( i have stopped my SIP’s in ELSS funds, this year expecting DTC to come in action this year.. need to renew them.. good at least for another year  ).. what surprises me is the fiscal deficit target… when every other country is reeling under pressure, FM says, we can control it well beyond the targeted limit of 4.8%.. bravo..

Following this , we will have  CapitalM’s view on effect of budget proposals on various sectors of Banking, Financial services, Taxation, Agriculture, Pharma, Infra etc..

Even though the FM brushed aside, any serious incident in the system, the worrying part is the effectiveness of the KYC system, and how bad it is monitored as just another customary paperwork…

neverthless, i can’t stop wondering at the simplest of financial innovation by a fellow Indian, challenging the Ponzi’s of western world and why none of the client’s affected lodged a complaint??

whatever said, poor fellow wealth managers will now be scrutinized more and will be meeting those suspicious eyes of customers nation wide…

CapitalMoney- Lets add wings to our dreams!