The Hindu Business Line : Bye-bye cash, welcome credit card

WHETHER the intended tax on cash withdrawals really helps control tax evasion or not one can be sure that the credit card companies will be rubbing their hands in glee; after all, you cannot pay cash to buy a TV or a fridge or even an expensive mobile phone unless you have been careful enough to draw the cash for it over many days in small instalments so as to not attract the provisions of law taxing cash withdrawals of more than Rs 10,000 per day. One, of course, wonders how this will be implemented at all - whether everyone will file all their bank statements or whether the banks will be forced to collect this at source when giving out the cash. Anyway, this is probably the most `rollbackable' aspect of this Budget and the one that each one of us needs to keep an eye out for. One only hopes that this does not encourage people to hold larger and larger amounts of currency rather than putting in money in the bank or create such absurdities.

As an individual consumer in India one has learnt to suppress expectations so much so that even lack of bad news is inevitably good news. In this context, the Budget is definitely good going as there is not too much bad news and there are some straws to clutch at and bigger ones on which hopes have been aroused.

The positives lie in the removal of the two-year-old excise duty on edible oil and vanaspati and the nominal Re 1 per kg surcharge on packaged tea. The disappointments clearly are that the policy of protecting the Indian farmer against the Indian consumer continues. The integration with Asean country duties is happening everywhere except for agricultural products and the high levels of import duties on edible oils continue.

In a year when consumers have been paying some of the highest prices in the last 10 years for sugar it must surely rankle to know that sugar companies are considered sick and are the candidates for support through interest subsidies and such. Of course, the fact that petrol and diesel prices will go up is a non-issue almost as it has anyway happened so many times in the last 12 months. No one who has endured forced passive smoking in the company of a GOGO smoker will ever grudge the higher tax burden on smokers.

The bigger positive is the reaffirmation of the VAT implementation deadline. Considering that States have been crying themselves hoarse about revenue losses on VAT and that the Centre is talking of the strains to its finances in reimbursing the losses, the losses to the States must be read as gains to consumers like you and me - if the numbers on these are anything like the Governments think they could be. There could be far more for us to cheer on April 1 when VAT rolls out - one hopes it will finally - than today.

(The writer is Managing Director of Subhiksha, the Chennai-based discount retail chain.)

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