2012 Union budget of India

Government budget

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

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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]

## Background

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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

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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

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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]

## References

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1. ^ "Union Budget 2012-13 on March 16, Railway Budget 2012-13 on March 14". Business Standard. Feb 15, 2012. Retrieved June 30, 2012.
2. ^ a b "State of the Economy and Prospects" (PDF). Ministry of Finance, Government of India. 15 March 2012. Retrieved 10 April 2025. "The Indian economy is estimated to grow by 6.9 per cent in 2011-12... following a growth of 8.4 per cent in each of the two preceding years. This indicates a slowdown ..."
3. ^ a b c "Taxes, Political Gridlock, and India's 2012 Budget: The Future of Economic Policy in India | The National Bureau of Asian Research (NBR)". Retrieved 2025-04-11.
4. ^ "Budget 2011-2012: Speech of Pranab Mukherjee, Minister of Finance". The Economic Times. 2011-02-28. ISSN 0013-0389. Retrieved 2025-04-11.
5. ^ a b c "India's union budget 2012–13: playing it safe | East Asia Forum". 2012-04-14. Retrieved 2025-04-11.
6. ^ a b c "India uses budget speech to sound upbeat economic note". BBC News. 2012-03-16. Retrieved 2025-04-11.
7. ^ "Budget 2012 anti-people, reflects UPA's policy paralysis: Tamil Nadu Chief Minister J Jayalalithaa". The Economic Times. 2012-03-16. ISSN 0013-0389. Retrieved 2025-04-11.
8. ^ "Untilised funds reflect government's policy paralysis". Governance Now. 2012-03-14. Retrieved 2025-04-11.
9. ^ "Budget 2012 highlights". Business Today. 2012-03-16. Retrieved 2025-04-11.
10. ^ "India's 2011-12 budget fails to see the big picture | East Asia Forum". 2011-03-19. Retrieved 2025-04-11.
11. ^ Jayaraman, K. S. (2012-03-01). "Indian budget disappoints". Nature. 483 (7390): 384. doi:10.1038/483384a. ISSN 1476-4687.
12. ^ "Union Budget 2012 - Who Really Bit The Bullet ?". www.forbesindia.com. Retrieved 2025-04-11.

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