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Union Budget

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Union Budget 2011-12

February, 2011

The Union Budget for 2011-12 has been announced by the Union Finance Minister, Mr Pranab Mukherjee, in Parliament on February 28, 2011.

Highlights of Union Budget 2011-2012


  • Gross Domestic Product (GDP) estimated to have grown at 8.6 per cent in 2010-11 in real terms. Economy has shown remarkable resilience
  • Indian economy expected to grow at 9 per cent with an outside band of +/- 0.25 per cent in 2011-12
  • Exports have grown by 29.4 per cent, while imports have recorded a growth of 17.6 per cent during April to January 2010-11 over the corresponding period last year


  • Fiscal consolidation targets at Centre and States have shown positive effect on macroeconomic management of the economy
  • Direct Taxes Code (DTC) to be finalised for enactment during 2011-12. DTC proposed to be effective from April 1, 2012
  • Areas of divergence with States on proposed Goods and Services Tax (GST) have been narrowed. As a step towards roll out of GST, Constitution Amendment Bill proposed to be introduced in this session of Parliament


  • Discussions underway to further liberalise the FDI policy
  • SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirements for equity schemes
  • Rs 6,000 crore (US$ 1.30 billion) to be provided during 2011-12 to enable public sector banks to maintain a minimum of Tier I CRAR of 8 per cent
  • Rs 500 crore (US$ 108.5 million) to be provided to enable Regional Rural Banks to maintain a CRAR of at least 9 per cent as on March 31, 2012
  • “India Microfinance Equity Fund” of Rs 100 crore (US$ 21.7 million) to be created with SIDBI.


  • Rs. 300 crore (US$ 65.1 million) expenditure to promote 60,000 pulses villages in rain fed areas for increasing crop productivity and strengthening market linkages
  • Proposal to spend Rs. 300 crore (US$ 65.1 million) to promote oil palm plantation in 60,000 hectares and Rs. 300 crore (US$ 65.1 million) for the initiative on vegetable cluster
  • Rs 400 crore (US$ 86.8 million) is proposed to be spent to improve rice based cropping system in the Eastern Region.


  • The allocation for social sector has been increased by 17 per cent to Rs. 1,60,887 crore (US$ 34.9 billion) which amounts to 36.4 per cent of the total plan allocation.
  • Remuneration for Anganwadi workers have been increased to Rs. 3000 (US$ 65.1) per month from Rs. 1500 (US$ 32.6) per month while the Anganwadi helpers will get Rs. 1500 (US$ 32.6) per month. This will be effective from 1st April 2011 benefiting about 22 lakh Anganwadi workers and helpers.


  • The allocation on education has been increased by 24 per cent to Rs 52,057 crore (US$ 11.3 billion). Sarva Shiksha Abhiyan gets Rs 21,000 crore (US$ 4.6 billion) which is 40 per cent higher than the previous year’s allocation of Rs. 15,000 crore (US$ 3.3 billion)
  • The Finance Minister also proposed to introduce a scholarship scheme for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in classes IX and X. It would benefit about 40 lakh students


  • Plan allocation for Health has also been increased by 20 per cent to Rs 26,760 crores (US$ 5.8 billion). The Rashtriya Swasthaya Bima Yojana will be extended to the unorganized sector workers in hazardous mining and associated industries


  • Existing scheme of interest subvention of 1 per cent on housing loan further liberalized
  • Existing housing loan limit enhanced to Rs 25 lakh (US$ 54,271.1) for dwelling units under priority sector lending
  • Provision under Rural Housing Fund enhanced to Rs 3,000 crore (US$ 651.3 million)
  • To enhance credit worthiness of economically weaker sections and LIG households, a Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana
  • Central Electronic Registry to prevent frauds involving multiple lending on the same immovable property to become operational by March 31, 2011


  • Allocation of Rs 2,14,000 crore (US$ 46.5 billion) for infrastructure in 2011-12. This is an increase of 23.3 per cent over 2010-11. This also amounts to 48.5 per cent of total plan allocation
  • Government to come up with a comprehensive policy for further developing PPP projects
  • IIFCL to achieve cummulative disbursement target of Rs 20,000 crore (US$ 4.3 billion) by March 31, 2011 and Rs 25,000 crore (US$ 5.4 billion) by March 31, 2012
  • Under take out financing scheme, seven projects sanctioned with debt of Rs 1,500 crore (US$ 325.6 million). Another Rs 5,000 crore (US$ 1.1 billion) will be sanctioned during 2011-12
  • To boost infrastructure development, tax free bonds of Rs 30,000 crore (US$ 6.5 billion) proposed to be issued by Government undertakings during 2011-12


  • Share of manufacturing in GDP expected to grow from about 16 per cent to 25 per cent over a period of 10 years. Government will come out with a manufacturing policy
  • Two Committees set up for greater transparency and accountability in procurement policy; and for allocation, pricing and utilisation of natural resources
  • Issues relating to reconciliation of environmental concern from various departmental activities including those related to infrastructure and mining to be considered by a Group of Ministers
  • National Mission for hybrid and electric vehicle to be launched
  • Financial Assistance to be made available for metro projects in Delhi, Mumbai, Bengaluru, Kolkata and Chennai
  • Capital investment in fertiliser production proposed to be included as an infrastructure sub-sector


  • National Innovation Council set up to prepare road map for innovations in India
  • Special grant provided to various universities and academic institutions to recognise excellence


  • Additional Rs 500 crore (US$ 108.5 million) proposed to be provided for National Skill Development Fund during the next year
  • An international award with prize money of Rs 1 crore (US$ 217,085) being instituted for promoting values of universal brotherhood as part of National celebrations of 150th Birth Anniversary of Gurudev Rabindranath Tagore


  • Gross Tax receipts are estimated at Rs 9,32,440 crore (US$ 202.4 billion)
  • Non-tax revenue receipts estimated at Rs 1,25,435 crore (US$ 27.2 billion)
  • Total expenditure proposed at Rs 12,57,729 crore (US$ 273 billion)
  • Increase of 18.3 per cent in total Plan allocation
  • Increase of 10.9 per cent in the Non-plan expenditure

Please click here for more details on the Union Budget 2011-12

Please click here for CII's analysis of the Budget 2011-12
Please click here for Deloitte analysis of the Budget 2011-12
Please click here for E&Y analysis of the Budget 2011-12
Please click here for ICRA's analysis of the Budget 2011-12
Please click here for KPMG's analysis of the Budget 2011-12