Tax-free infrastructure bonds expanded to increase private financing and broaden viability gap funding eligibility across additional sectors.
The budget doubles the ceiling for tax-free bonds to mobilise long-term debt through central financing institutions for infrastructure and adopts a harmonized master list to reduce policy ambiguity. Eligibility for Viability Gap Funding under the PPP support scheme is broadened to include irrigation, agricultural market infrastructure, fertilizer capital investment, oil and gas storage and pipelines, and fixed telecommunication networks and towers. Credit access measures include IIFCL's credit enhancement and take-out finance, a consortium for direct lending, and in-principle approvals to developers before PPP bid submission to improve project bankability.

Financial inclusion expansion broadens rural banking access via business correspondents and ultra small branches in newly eligible habitations.
The Financial Inclusion Scheme 'Swabhimaan' is being expanded to include additional habitations based on census-defined population thresholds, extending coverage in North Eastern and hilly areas at a lower threshold and other areas at a higher threshold. The extension uses the Business Correspondent model and establishment of Ultra Small Branches to deliver cash transaction services, following substantial completion of the initial coverage phase.

Scheme for capitalization of regional rural banks extended to enable state contributions; core banking migration and NEFT participation noted.
Extension of the scheme of capitalisation for financially weak regional rural banks by two years to permit States to make outstanding contributions, noting that recapitalisation was completed for twelve RRBs by end-February 2012 and that the vast majority of RRBs have migrated to core banking solutions and joined the national electronic funds transfer system.

FDI in multi-brand retail under consideration; government seeking broad consensus with states while decision remains held in abeyance.
The Government is pursuing a broad-based consensus with State governments before finalising permission for FDI in multi-brand retail, and the decision to allow such FDI has been held in abeyance; by contrast, FDI in single-brand retail and cash-and-carry wholesale remain fully permitted, and organized retail is noted to reduce intermediation costs benefiting consumers and producers.

Advance Pricing Agreement introduced to reduce transfer pricing litigation and provide tax certainty for foreign investors
Advance Pricing Agreement provisions have been inserted into the Finance Bill, 2012 to provide pre agreed transfer pricing methodologies, reduce tax litigation, and deliver tax certainty to foreign investors; the government moved the APA forward from its earlier placement in the Direct Tax Code proposal to achieve earlier implementation.

Service tax exemption on copyrights for recording cinematographic films announced, relieving the film industry from taxation.
A fiscal measure grants a service tax exemption for transactions involving copyrights relating to recording of cinematographic films, directed at the film industry and removing service tax liability on fees attributable to copyrights created in the course of recording cinematic works, thus excluding such copyright-related services from the service tax net as a budgetary proposal.

Aadhaar expansion to enable direct payments of social benefits with funding assured for large scale enrolment.
The UID Aadhaar platform is declared ready to enable direct payments of MG NREGA wages, social pensions and scholarships into beneficiary accounts in selected areas, and funding is assured to complete a major additional phase of enrolments starting April 1, 2012.

Curbing black money: government advances tax information exchange, investigative capacity and domestic anti money laundering reforms.
Curbing the circulation and externalisation of black money is pursued through enhanced international tax cooperation, operationalising treaty based information exchange and a dedicated exchange cell within the tax authority, accession to multilateral mutual assistance instruments, and creation of a specialised Directorate for criminal tax investigation; concurrently, domestic reforms include amendments to money laundering laws, prohibition of benami transactions, tighter narcotics financial controls, and a bill to improve public procurement transparency.

Service tax negative list exempts healthcare and specified charitable, educational, and personal services from taxation.
Service taxation moves to a negative list model making all services taxable except those expressly excluded; the list covers public authority services (with specified exceptions), education from pre school to recognized higher and vocational levels, renting of residential dwellings, entertainment, and major parts of public transportation, and services tied to agriculture and animal husbandry up to sale in primary markets. A separate exemptions schedule exempts health care, charitable and religious services, sportspersons and certain artists, independent journalists, individual advocates for non business clients, animal care, car parking, business facilitators and correspondents to banks and insurers, and specified construction and affordable housing services.

Agricultural credit expansion boosts rural liquidity with interest subvention, post harvest support and Kisan Credit Card smart card access.
Increase in directed agricultural lending with reinforced interest subvention for short term crop loans, including an additional prompt payment incentive, and extension of subvention to short post harvest loans against negotiable warehouse receipts. Institutional measures include a refinance allocation to strengthen Regional Rural Banks via a dedicated RRB refinance fund, conversion of the Kisan Credit Card into a smart card usable at ATMs to improve credit access, and creation of a government irrigation and water resource finance company alongside funding for agricultural research.

Common return for indirect taxes simplifies filing and harmonises Central Excise and Service Tax compliance.
A procedural harmonisation consolidates registration and return filing for Central Excise and Service Tax: a common simplified registration form will replace separate registrations, and a one page consolidated return, designated EST 1, will replace the existing multi page returns to streamline reporting and reduce taxpayer compliance burden.

Service tax rate increase implemented to strengthen fiscal position and generate additional revenue after the budget change.
Service tax rate increased from 10 per cent to 12 per cent in the Union Budget 2012 13 with consequential adjustments to individually rated services, adopted to strengthen the fiscal position and raise additional revenue; the announcement also noted an increased share of services in GDP.

Agricultural mission consolidation to streamline programmes and boost productivity under national plan.
The 12th Five Year Plan consolidates multiple agricultural programmes into targeted national missions: merging pulses, nutri cereals and fodder initiatives into the National Food Security Mission; incorporating rainfed development and micro irrigation into the National Mission on Sustainable Agriculture; and reinforcing missions on oilseeds, agricultural extension and technology to boost production and technology adoption. Complementary measures expand horticulture diversification, strengthen a Protein Supplement Mission covering dairy, fisheries and livestock, and establish a centrally sponsored National Mission on Food Processing with state cooperation.

Excise duty change on large cars alters levy structure, converting mixed rate into ad valorem.
Excise duty on large cars was raised in the Union Budget proposals and cars previously subject to a mixed charge will have that mixed component replaced by a uniform ad valorem rate, with engine capacity and vehicle length remaining as the segmentation criteria for the levy.

Budget allocation increase for agriculture prioritises expansion of agricultural schemes and intensified irrigation support under the national plan.
Increase in planned budgetary allocations prioritises the agriculture sector by enlarging the Plan Outlay for the Department of Agriculture & Cooperation, augmenting funding for the Rashtriya Krishi Vikas Yojana to support state agricultural development and productivity, and allocating targeted resources for a Green Revolution initiative in eastern India to raise paddy production and for an intensified irrigation development programme in Vidarbha to expand protective irrigation.

Basic customs duty reduction on agricultural and fertilizer equipment eases imports and enables temporary exemptions for project setup.
Basic customs duty on specified agricultural machinery, parts, coffee plantation and processing machinery, and selected water soluble and liquid fertilizers (other than urea) has been reduced to ease imports for agriculture and agro processing. Additionally, imports of equipment for initial setting up or substantial expansion of fertilizer projects are temporarily fully exempted from basic customs duty, creating a time limited concession to support fertilizer sector capacity expansion.

Fiscal deficit target narrows under fiscal consolidation, shaping borrowings and projected public debt trajectory.
The Union Budget for 2012-13 targets the Fiscal Deficit at 5.1% of GDP with net market borrowings through dated securities after other financing items, and projects total debt stock at 45.5% of GDP; the Effective Revenue Deficit is identified as a specified share of GDP. The reduction in the fiscal gap is attributed to fiscal consolidation measures taken despite lower direct tax collections, revenue losses from petroleum duty reductions, and higher petroleum and fertilizer subsidy spending to moderate consumer prices.

Basic customs duty exemption for specified infrastructure imports expands to steam coal, natural gas, LNG, uranium concentrates, and road equipment.
Full exemption from Basic Customs Duty is extended to steam coal, Natural Gas, Liquified Natural Gas, and uranium concentrates and sintered uranium dioxide, with a concessional countervailing duty applied to steam coal; and full import-duty relief for specified road construction equipment, including tunnel boring machines and parts, is extended to contracts awarded by Metropolitan Development Authorities, with the exemption allowed without an end-use condition.

Budget revenue projections indicate higher gross tax and non tax receipts with increased plan and non plan expenditure allocations.
Gross tax receipts for the Union Budget 2012 13 are projected to rise, with Gross Tax Receipts estimated at Rs.10,77,612 crore and net tax receipts after devolution at Rs.7,71,071 crore; direct and indirect tax revenue growth rates are estimated separately. Non tax receipts, including dividends, interest and telecom spectrum receipts, and non debt capital receipts are identified as key receipt components. Total expenditure is presented by Plan and Non Plan, with plan expenditure increased and specified allocations for central plan support, assistance to States and UTs, and higher non plan outlays for subsidies, interest, defence, pensions and sectoral services.

Food security information utility to computerize the public distribution system, enhancing delivery and targeting for vulnerable groups.
A national information utility will be established to computerize the Public Distribution System, centralize PDS records, support beneficiary targeting and transaction tracking, and thereby strengthen delivery of food security to poor and vulnerable populations as part of implementing the National Food Security framework.