The Hindu Business Line : A Budget for everybody

The changes in income-tax slabs are welcome, will leave more disposable income with salaried class and should prove to be a catalyst in consumer spending. Compliance still needs to improve from non-salaried class individuals. Hopefully making investment in mutual funds will further help in improving the compliance. The Government should work towards making PAN card mandatory for everybody over a period of time. Non-reduction of corporate tax rates must have disappointed th e corporates. The Government should be rationalising tax rates further and improve compliance over a period of time linking certain percentage of tax rebates to the total spend on educational institutions and health. Reduction of excise duty on small cars and pharmaceuticals should send a positive signal. Bringing PDS under smart card scheme is also a welcome step, however, this will require time bound and effective execution. Withdrawal of cash transaction tax is a big relief to bankers and entrepreneurs. While the waiver of farm debt is welcome as the fruits of economic reforms have not percolated down to rural India, its impact on credit culture will be worth review. Increase in transaction tax on stock trading may not bring desired impact in long term as long as day traders are making profit. Doubling of allocation for Textile Upgradation Fund should help textile firms to upgrade their technology, reduce their production cost and realize better margins. However non –extension of tax exemption to IT companies operating from IT parks (on the lines of tax exemption given to companies operating from SEZ) may make small and medium IT companies vulnerable to the exchange rate fluctuation.

Abhay Kumar Sinha, Business Head, Banking & Financial Services, South Asia

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