Expectations from Union Budget 2012-13

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The year 2012 has set off and the time of tabling the Union Budget 2012 is approaching fast. Like the previous budgets, there are many expectations from the Union Budget 2012. Mr. Pranab Mukherjee, the Union Finance Minister, is going to table the Union Budget once the Rail Budget is tabled by the Union Railway Minister.

Expected Launch Date of Union Budget 2012-13

As stated by news sources, the Union Budget for 2012-2013 will be presented in the second week of March this year. Consequently, the budget sessions for the year have been planned to start from the 2nd week of March this year.

Previously, these sessions were scheduled to take place in the last week of February 2012. However, they have been deferred because of the assembly elections taking place in five states of the country (Uttar Pradesh, Manipur, Goa, Uttaranchal and Punjab). The results of these assembly elections will be announced on the sixth day of March and the other formalities of the Election Commission of India (ECI) will be completed by the ninth of March, 2012.

The second week of March is a quite vital period for tabling the Union Budget 2012-2013 since Holi is falling in this week as well. Previously, the Finance Minister Pranab Mukherjee had indicated that inflation will reduce by 6% in the month of March.

Once the Union Budget 2012 is tabled, an economic study will also take place.

Budget 2012 Expectations

The expectations from Union Budget 2012 are given below:

The Union Budget should save up for monetary policies and be stringent on fiscal policies:

Uday Kotak, the vice chairman and managing director of Kotak Mahindra Bank, advocated India to progress with financial reorganizations to make the most of the shifting worldwide dynamics. Mr. Kotak has also stated that it is the right occasion for India to choose more stringent fiscal guidelines and simplify its monetary guidelines position.

According to his statement, the whole world is witnessing an accommodative monetary policy and the emerging trend is going in the direction of a more rigorous fiscal policy. In India, the situation is somewhat different. Here the monetary policy is more stringent than the fiscal policy. The time has come to modify the formula, he said.

The managing director of Kotak Mahindra Bank informed a news agency that he expects that the budget in 2012 would incorporate measures to handle the fiscal deficit. He thinks that the Reserve Bank of India might take into account a reduction in the CRR (Cash Reserve Ratio) in the month of March by 100-200 basis points. As a result, the interest rates will also come down in the month of April.

Expectations of the salaried individuals

It is expected that the exempted income tax limit for the male salaried individuals will be raised from Rs. 180,000 to Rs. 200,000. This way, the salaried people and employees of different organizations will be benefited.

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.

When the cash reserve ratio has been slashed by the Reserve Bank of India by 50 basis points, the Governor of RBI (the Reserve Bank of India) stated that it is now crucial on the part of the Union Government to assume measures in the direction of fiscal consolidations. Dr. Ahluwalia said that the Ministry of Finance will definitely indicate fiscal consolidation in the upcoming budget. However, the government is not going to initiate substantial contractionary measures. The main concentration will be on reducing the fiscal deficit and regulating subsidies and grants. However, this will not be a simple job and the government has to move slowly. He said that curbing subsidies will not influence the inflation.

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.

Now what is fiscal deficit? Fiscal deficit is that quantity or figure where the outlays and financing of the government for different activities and improvements goes beyond the already obtainable revenue of the nation. There is a probability that bringing in this fiscal consolidation will lower the fiscal shortfall. At the same time, it will better the standard of macroeconomic supervision covering the utilization and supervision of the wealth of the common people and finances through designing a reasonable budget.

The amount of expenditure should be equal to income for any economy, starting from tiny families to a nation. This is important for that nation to be on the right track. The Central Government is planning to furnish a budget policy in the middle of March for the approaching fiscal year which is starting on 1st April, 2012.

Last Updated on 2/8/2012