Union budget



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UNION BUDGET

Finance Minister of India, Dr. Pranab Mukherjee presented the Union Budget on 16 March, 2012 on the floor of Lok Sabha. The main points of this budget are:



  • Personal Income Tax slabs for indiviuals relaxed.

  • Exemption limit enhanced from Rs. 1.8 lakh to Rs. 10 lakh.

  • Upper limit of 20% tax raised from Rs. 8 lakh to Rs 10 lakh.

New slabs as follows:

Upto Rs. 2 lakh – Nil.

Rs. 2 – 5 lakh – 10%

Rs. 5 – 10 lakh – 20 %



Rs. 10 lakh – 30%

  • In addition to medical insurance an additional Rs. 5000 to be exempted for preventive health check ups.

  • Deduction of 50% for investments upto Rs. 50000 in equity by new investors with an annual income upto Rs. 10 lakh.

  • Withholding tax on certain overseas borrowings reduced to 5% from 20%.

  • Securities transaction tax cut by 20% for stock market orders.

  • Service tax rate up from 10% to 12%.

  • Higher service tax to add Rs. 186.6 billion in revenue.

  • Duty free baggage allowance for Indians increased to Rs 35000.

  • Duty free baggage allowance for children increased to Rs. 15000.

  • Construction services relating to specified infrastructure, canals, irrigation works, post harvest infrastructure, residential dwelling and low cost mass housing upto an area of 60 sqm.

  • Exemption for the monthly charges payable by a member to a housing sciety up from Rs. 3000 to Rs. 5000.

  • Standard excise duty raised from 10% to 12%.

  • Excise duty on LED lamps cut to 6%.

  • Custom duty on gold bars, gold coins increased to 4%.

  • GST network to become operational from August, 2012.

  • Industry pulled down growth in past two years.

  • Expedite coordinated implementation of decisions being taken to improve delivery systems, governance and transparency and address the problem of black money and corruption in public life.

  • India 33rd signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

  • Directorate of Income Tax Criminal Investigation was established in CBDT.

  • Tax deduction at source on transfer of immovable property (other than agricultural land above a specified threshold),

  • Tax collection at source on trading in coal, lignite and iron ore.

  • Increasing the onus of proof on closely held companies for funds received from shareholders as well as taxing share premium excess of fair market value.

  • To increase outlay for agriculture by 18% to Rs. 202.08 billion.

  • India to be self sufficient in urea manufacturing in 5 years.

  • India Opportunity Venture Fund via SIDBI to Rs. 50 billion.

  • To issue revised norms for banks’ priority sector lending.

  • To set up financial holding company for recapitalization of banks.

  • 12th Plan investment for infrastructure rises.

  • ECBs allowed to part finance rupee debt of power projects.

  • Budget approves overseas borrowing of upto US $ 1 billion for airlines’ working capital needs.

  • To allow 1 year ECBs of SU $ 1 Billion for airline companies.

  • Allowed direct import of ATF by airlines.

  • To keep subsidies under 2% of GDP over next 3 years.

  • Subsidy for food security to be fully provided for some subsidies inevitable.

  • Fiscal policy had to absorb subsidy payments.

  • Allocated Rs. 255.55 billion under Right to Education.

  • Integrated Child Development Services (ICDS) scheme to be re-structured.

  • Allocated Rs. 158.50 for child development.

  • Allocated Rs. 119.37 billion for mid day meal.

  • Rs. 250 million for Anand Rural Management Institute.

  • Allocated Rs. 208.22 billion under rural health plan.

  • NRHM allocation up Rs. 181.15 billion to Rs. 208.22 billion.

  • National Urban Health Mission being launched. National Urban Health Mission to focus on primary healthcare needs in urban areas.

  • Seven government medical colleges to be upgraded.

  • National Rural Livelihood Mission (NRLM) allocation increased to Rs. 39 billion.

  • Women’s SHGs Development Fund Corpus enlarged to Rs. 30 billion.

  • Interest subvention to Women SHGs to avail loans upto Rs. 3 lakh at 7% per annum.

  • Women SHGs that repay loans in time to get 3% more subvention.

  • Prime Minister’s Employment Generation Programme allocation at Rs. 12 billion in 2012-13.

  • National Skill Development Corporation (NSDC) allocated Rs 10 billion.

  • Provision of Rs. 1.93 trillion for Defence services.

  • Efforts to increased availability of residential quarters to defence forces.

  • To construct nearly 4000 residential quarters for Central Armed Police Forces.

  • Provision of Rs. 32.80 billion for construction of office buildings including land acquisition and barracks to accommodate 27000 personal.

FRAMING OF THE CONSTITUTION

  • The idea to have a Constitution was given by MN Roy (Political Philosopher)

  • The constitution was framed by the Constituent Assembly of India, set up in Dec. 1946, in accordance with the Cabinet Mission Plan under the Chairmanship of Sachidanand Sinha, initially. On the demise of Sachidanand Sinha, Dr. Rajendra Prasad was elected as the President. BN Ra was appointed as the Constitutional Advisor.

  • The total membership of Constituent Assembly was 389, when 93 were representatives from the Indian States and others from British India.

  • The chairman of the Drafting Committee was Dr. B.R. Ambedkar.


IMPORTANT ARTICLES OF THE CONSTITUTION:

Part I

Union and its territories:

(Article 1 – 4)

  1. The constitution says, “India, that is, Bharat, shall be a Union of States”

  2. Admission or establishment of new states.

  3. The constitution empowers the Parliament to form new states and to alter the areas, boundaries or names of existing states.

  4. Jammu and Kashmir has been given special status under Article 370

Part II:

Citizenship (Articles 5 – 11)

Five modes to acquire citizenship of India

  1. By Birth

  2. By descent

  3. By registration.

  4. By naturalization.

  5. By incorporation.

Three modes of losing citizenship

  1. Renunciation

  2. Termination.

  3. Deprivation.

Part III:

Fundamental rights (Article 12 – 35)

Right to equality (Article 14 – 18)

  • Equality before law.

  • Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.

  • Equality of opportunity in matters of public employment.

  • Abolition of un-touchability.

  • Abolition of titles.


Right to freedom (Articles 19-21)

  • Protection of certain rights regarding freedom of speech and expression, freedom to assemble peacefully, etc.

  • Protection in respect of conviction for offences.

  • Protection of life and personal liberty.

Right to Education:

  • Article 21A states that the state shall provide free and compulsory education to all children of the age of 6-14 years.

Right against Exploitation:

  • Prohibition of trafficking in Human beings and forced labour (Article 23)

  • Prohibition of employment of children in factories, etc. (Article 24)

Right to freedom of religion (Article 25-28):

  • Freedom of conscience and free profession, practice and propagation of religion.

  • Freedom to manage religious affairs.

  • Freedom as to payment of taxes for promotion of any particular region.

  • Freedom as to attendance at religious instructions or religious worship in certain education institutions.

Cultural and Educational Right:

  • Protection of interest of minorities (Article 29)

  • Right of minorities to establish and administer educational institutions (Article 30)

Freedom of press is implicit in the Article 19 and Article 21 cannot be suspended under Article 352 (National Emergency)

Right to Property under article 31 was repealed by the 44th amendment Act, 1978, and was made a legal right under Article 300A.

Right to constitutional remedies:

  • Right to move to the Supreme Court and the High Courts (under article 226) in case of their violation, termed by BR Ambedkar as the Heart and Soul of the Constitution.

  • Article 32 (4) shall not be suspended except according to the provision of the constitution.

  • The Supreme Court and High courts have the power to issue writs, if fundamental rights are violated.

Types of writs:

Writ

Meaning

Intended Purpose

Habeas Corpus

You may have the body

To release a person who has been detained unlawfully whether in prison or in private custody.

Mandamus

We command

To secure the performance of public duties by lower court, tribunal or public authority.

Certiorari

To be certified

To quash the order already passed by an inferior court, tribunal or quasi judicial authority.

Prohibition

The act of stopping something

To prohibit an inferior court from continuing the proceedings in a particular case where it has no jurisdiction to try.

Quo warranto

What is your authority

To restrain a person from holding a public office to which he is not entitled.

Part IV

Directive Principles of State Policy (Articles 36- 51)

Article 36-37 Definition and application of the principles contained in this part.

Article 38 To secure and protect a social order which stands for the welfare of people.

Article 39: Certain principles of policy to be followed by the state.

Article 40: To organize village panchayats as units of self-government.

Article 41: Right to work to education and to public assistance in certain cases.

Article 42 To secure just and humane conditions of work and maternity relief.

Article 43 Living wage etc. for workers.

Article 44: Uniform Civil Code for the citizens.

Article 45: Provision of early childhood care and education to children belwo the age of 6 years.

Article 46: To promote the educational and economic interests of the weaker sections of the people, especially the Scheduled Castes and Scheduled Tribes.

Article 47 Improvement of public health and the prohibition of intoxicating drinks and drugs.

Article 48: Organization of agriculture and animal husbandary.

Article 49: To protect all monuments of historic interest and national importance.

Article 50: To bring about the separation of the judiciary from the executive.

Article 51: Promotion of international peace and security.

FUNDAMENTAL DUTIES

PART IV A:

FUNDAMENTAL DUTIES (Article 51 A)-

It was inserted by the 42nd amendment Act in 1976 on the recommendations of Swaran Singh Committee and it was taken from erstwhile Constitution of USSR:



It shall be the duty of every citizens of India-

    • to abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem.

    • to cherish and follow the noble ideals which inspired our national struggle for freedom.

    • to uphold and protect the sovereignty, unity and integrity of India.

    • to defend the country and render national service when called upon to do so.

    • to promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious, linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of women.

    • to value and preserve the rich heritage of our composite culture.

    • to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures.

    • to develop the scientific temper, humanism and the spirit of inquiry and reform.

    • to safeguard public property and to abjure violence.

    • to strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement.

The 86th Amendment Act, 2002 inserted Article 51A (K) “each parent or guardian to provide opportunities for education to his child or ward between the age of 6 and 14 years.”

Part V

Union (Articles 51-151)

The President

  • The executive head of the state and the first citizen of India.

  • The 42nd Amendment of the Constitution has made it obligatory on the part of the president on accept the advice of the Council of Ministers. However, 44th Amendment Act, amended the word “obligatory” and added that “President can send the advice for reconsideration”

  • Qualifications: Must be a citizen of India, of 35 years in age, eligible to be a member of the Lok Sabha and must not hold any government post.

  • Election: Indirectly elected through Electoral College consisting of elected members of both the Houses of the Parliament and elected members of the Legislative Assemblies of the States.

  • According to the 70th Amendment Act, 1992, the expression ‘States’ include the National Capital Territory of Delhi and the Union Territory of Puducherry. Members of the Legislative Councils have no right to vote in the Presidential election.

  • Supreme Court decides all disputes regarding President’s election.

  • Impeachment procedure: It is a quasi-judicial procedure. President can be impeached only on the grounds of violation of the constitution.

  • The impeachment procedure can be initiated in either House of the Parliament.

Tenure:

  • The term is five years though there is no upper limit on the number of times a person can become the President (Article 57). He can give resignation to the Vice-president before the full-term.

  • The salary of the President is Rs. 1,50,000 per month.

  • In case the office of the president falls vacant due to death, resignation or removal, the vice-president acts as the president. If he is not available then Chief Justice of India, if not then the senior most Judge of the Supreme court shall act as the President of India.

The first and only president who died in the office was Dr. Zakir Hussain. He was also the President with the shortest tenure.

Powers:


  • He is the formal head of the administration.

  • The president shall have the power to appoint ad remove high authorities like the Prime Minister, other Ministers of the Union, Judges, Governors of States, appoints Chiefs of Army, Navy and Air force. He is the Supreme Commander of the Armed Forces.

  • He appoints 12 members of special repute in the Rajya Sabha and 2 members in the Lok Sabha, of the Anglo-Indian Community.

  • He has the power of Pardon to a criminal in special cases.

  • Declares wars and concludes peace, subject to the approval of the parliament.

  • President has the veto power.

  • Under article 72, the President has the power to grant pardons, reprieves respites or remission of punishment, or to suspend, remit or commute the sentence of any person convicted with death sentence.

  • Under Article 123, President can promulgate ordinances only when the parliament is not is session.

IMPORTANT CONSTITUTIONAL AMENDMENTS

First Amendment Act, 1951: Added 9th Schedule. 

Seventh Amendment Act, 1956: Necessitated on account of reorganization of States on a linguistic basis.
Twelfth Amendment, 1962: Incorporated Goa, Daman and Diu as UT. 

Thirteenth Amendment, 1962: created Nagaland as State.


Fourteenth Amendment, 1962: Pondicherry, Karaikal, Mahe and Yanam, the former French territories were included in the Schedule as UT of Pondhicherry. 

Fifteenth Amendment, 1963: age of retirement of High Court Judges has been extended from 60 to 65 years.

Eighteenth Amendment, 1966: reorganised Punjab into Punjab, Haryana and UT of Chandigarh.
Twenty-second Amendment, 1969: created a sub-state of Meghalaya within Assam.

Twenty-sixth Amendment, 1971: abolished the titles and privileges of former rulers of princely states.

Twenty-seventh Amendment, 1971: established Manipur and Tripura as States and Mizoram and Arunachal Pradesh as UTs.
Thirty-first Amendment, 1973: increased the elective strength of the Lok Sabha from 525 to 545 members. The upper limit of Representatives of States wet up from 500 to 525.

Thirty-sixth Amendment,1975: made Sikkim a state.

Thirty-eighth Amendment, 1975: Clarified that declaration of emergency by the President and promulgation of ordinance by the President or Governor cannot be challenged in any court on any ground.

Forty-third Constitutional Amendment, 1977:

The 43rd amendment omitted many articles inserted by 42nd amendment. It restored the jurisdiction of the Supreme court and the High Courts, which ahd been curtailed under the 42nd Amendment.

Forty-forth Amendment, 1978: The right to property was deleted from part III. Article 352 was amended to proved “Armed Rebellion” as one of the circumstances for declaration of emergency.



Forty-fifth Amendment, 1985: Extended reservation for SC/ST by another 10 years (till 1990)

Fifty-third Amendment, 1986: Mizoram was made a state.

Fifty-sixth Amendment, 1987: Hindi version of the Constitution was accepted for all purposes. The UT of Goa, Daman and Diu was divided and Goa was made a state. Daman and Diu remained as UT.
 Sixty-first Amendment, 1989: Reduced the voting age from 21 years to 18 years for the Lok Sabha as well as Assemblies.  

Sixty-ninth Amendment, 1991: Special provision for Delhi and Delhi made a NCT.
Seventy-third Amendment, 1992: The institution of Panchayati Raj got Constitutional guarantee, status and legitimacy. XIth Schedule was added to deal with it. It also inserted Part IX, containing Articles, 243, 243 A to 243 O.

Seventy-fourth Amendment, 1992: provides constitutional status to municipalities by inserting Part IX-A and the XIIth Schedule.

Eighty-sixth Amendment, 2002: made education a fundamental right for children in the age group of 6 to 14 years.
Eighty-Eight Amendment, 2003: The Act amends Article 268, 270 and VIIth Schedule of the Constitution. It adds 92C just after 92B and makes provisions for Tax on Services.

Eighty- ninth Amendment, 2003 : The Act adds Article 338A and provides for the creation of National Commission for Scheduled Tribes.

Ninety-one Amendment, 2003: Amended the Anti-defection law and also made a provision that the number of ministers i the centre and state govt. cannot be more than 15% of the strength of Lok Sabha and respective Vidhan Sabha.

Ninety- third Amendment 2005: To reserve seats for the socially and educationally backward classes, besides the Schedules Castes and the Scheduled Tribes, in private unaided educational institutions other than those run by minorites.
Ninety-fourth Amendment, 2006: The changes pertained to provision of a separate Minister of tribal affairs for these states. This amendment stipulated that in Article 164 of the Constitution in Clause (1) in the provision for the word “Bihar” the words “Chhattisgarh, Jharkhand” shall be substituted.

Ninety fifth amendment, 2009: Extends the reservation of seats for SC/STs in the Lok Sabha for another 10 years. In Article 334 of the Constitution for the words “sixty years” the words “seventy years” was substituted.

Ninety Sixth Amendment, 2011: Amendment of 8th Schedule it replaces ‘Orissa; with ‘Odisha’

Ninety seventh amendment, 2011: Amendment of Article 19(1)(i), insertion of article 43B, insertion of part IXB, This amendment gives constitutional status to cooperatives.

National Income of India

Domestic Product:

Gross Domestic Product at Market Price – Market value of final output of goods and services produced within the country’s domestic economy in a period of one year.

Net Domestic Product at market price – GDP – Depreciation.

Net Domestic Product at Factor Cost – NDP – Indirect Taxes + subsidies.

National product:

Gross National Product at Market Price = GDP + Net factor income from abroad

Net National Product at Market Price = GNP – Depreciation.

Net National Product at Factor cost = National Product – Indirect taxes + subsidies

Per capita product/ Income: National income/ population or Net National Product at Factor cost/ Population.

  • The first estimate of national income was prepared by Dadabhai Naoroji and per capita income was calculated Rs. 20 in 1870.

  • The first scientific estimate was made by Prof. VKRV Rao using output and income methods for the year 19331-32.

  • Natioal income committee was headed by Prof PC Mahalanobis, set up in 1949 and provided for the first time comprehensive date of national income in 1954.

  • Conventional series with basic year of 1948-49 were divided the economy into 13 sectors. At present, the economy is divided into 9 sectors.
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