Budget Coverage

Budget 2015: Jaitley goes tough on tax evaders; attempts to woo investors

Our Bureau New Delhi | Updated on January 24, 2018 Published on February 28, 2015

Finance Minister Arun Jaitley

Finance Minister Arun Jaitley on Saturday presented an ‘intellectually honest’ Budget that seeks to address the concerns of domestic tax payers, while signalling the intent to go tough on those who have stashed black money abroad.

The Budget is replete with several measures that would go to improve social security in India and make the country a pensioned society from the current pensionless society.

It has gone the extra mile in providing comfort to foreign investors given the improvement in investment sentiment in the Indian economy. Besides announcing a merger of FMC with SEBI, the Budget also provides for a new law that would tackle the menace of black money abroad.

Markets not impressed

Modi government’s first full-fledged budget triggered huge volatility in stock markets today with the benchmark Sensex finally ending 141.38 points higher on promise of lower corporate tax rates — logging the the first rise on a Budget day in four years.

The Sensex, which was trading with a gain of over 200 points before Finance Minister Arun Jaitley began his much-awaited Budget speech, swung between positive and negative terrain as he announced different measures. Soon after the Budget speech ended, the bluechip index fell to the day’s lowest point of 28,882.02 — down 338 points. However, markets recovered from the lows and rose steadily in the last two hours of trading to end at 29,361.50 — a net rise of 141.38 points or 0.48 per cent. Intra-day, it swung a massive 678 points. Yesterday, Sensex had gained 473 points after the Economic Survey.

In the previous three sessions on Budget 2014, 2013 and 2012, the Sensex had ended down.

The NSE Nifty also moved up by 57.25 points to close at 8,901.85, after hovering between 8,751.35 and 8941.10.

Tax evasion

On the anvil is a proposal to declare tax evasion and parking of illegal money abroad as a predicate offence under the Indian money laundering law which could even lead to imprisonment that could be as long as 10 years.

To appease the foreign investors the Budget has announced deferment of GAAR by two years and the implementation will be with prospective effect. Meanwhile, domestic corporates have been assured of gradually pruning of corporate tax to 25 per cent from 30 per cent starting next year.

While Jaitley has done away with the wealth tax component for taxing rich, he has introduced an additional two per cent tax on the super rich.

Gold rush

There are also several measures to tap the gold rush in the Indian society including framing of the gold sovereign bond scheme, besides allowing individuals to open a metal account so that household gold can be monetised. There is also proposal to start a Mudra Bank that would cater to micro finance institution.

Given the favourable macro-economic situation the Budget is not aggressive on fiscal consolidation and pegged the fiscal deficit for 2015-16 at 3.9 per cent.

The Budget has increased the service tax component by 2 per cent taking it to 14 per cent. It has subsumed the two per cent education cess with Central excise.

Disinvestment

The Budget has pegged the disinvestment target at Rs 41,000 crore in addition to this the Government is looking to make strategic disinvestment of Rs 28,500 crore.

Path-breaking, says BJP

The BJP has hailed the Budget as path breaking. Party leader and environment minister Prakash Javadekar said the Budget is truly inclusive.

"This a historic Budget. It really cares for poor. First time social security for all has been ensured. Unorganised labourers will get a complete security cover and this is the thrust of the budget... Fantastic reductions were given to industries and to the taxpayers," he said.

He added that the Budget will help for concerted action against black money.

An election budget: Kharge

The Congress said Arun Jaitley presented a bad case as a good advocate in Parliament.

"This is a just a vision Budget, which will not to be implemented now. Jaitley has indirectly taken a development holiday. It's an election budget, corporate budget aimed at the rich. Nothing is given for poor," said Congress leader in Lok Sabha Mallikarjun Kharge.

He said schemes like MGNREGA is going to be finished with no new allocations. He termed the proposed law on black money as a farce. "Where's the black money. Making sound is no replacement for action," he added.

He said the Centre has enough money by not reducing the oil prices, but Jaitley is not ready to pass on the benefits to poor.

'Not a make or break budget'

Jyotsna Suri, FICCI President, and Chairperson, Bharat Hotels Ltd, said: "It is not a make or break budget. It is a visionary budget which lays the road map for future. Measures such as reducing corporate tax is appreciated."

Sunil Sanghai, MD and Head of Banking, HSBC India, says: While there is nothing for personal tax, it is a Budget aimed at the long term. The proposal to merge FMC and SEBI is welcome as country needs a strong regulator.

Published on February 28, 2015
null
This article is closed for comments.
Please Email the Editor