By Bhaskar Upadhyaya
Fince Minister Arun Jaitley unveiled BJP Government’s first full year budget, but does this budget reflect the correct translation of PM rendra Modi’s high worded content of his political speeches? Will Modi’s “Make-In-India” get the required call to action from this budget? Former PM Manmohan Singh critiqued that this budget though has good intentions but lacked a clear roadmap to achieve solid action and results. The effect of this particular budget on the general population would be hard to judge as it hardly offers any strong exemption or inclusion in terms of taxation, but it does aim to ramp up the tion’s growth and put monetary capital to work. A welcome move to increase allocation in road and rail investments, 5 new Ultra Mega Power Projects to end chronic power shortages, building of 6 crore toilets under the Swachh Bharat Abhiyan and upgradation of schools.
This budget has nothing fancy to offer to the middle class taxpayer. Afterall, only about 3% of Indian individuals pay income tax. Tax slabs have been untouched. However, a hundred percent bump in transport allowance exemption from the current Rs 800 to Rs 1600, tax deduction allowance on payment of health insurance premium to Rs 25,000 from the current Rs 15,000 and increase in the limit of deduction on investing in tiol Pension Scheme to Rs 1.5 lakh from the current Rs 1 lakh are welcome moves. But the increase in Service Tax to 14% from 12.36% will make the middle class pay more at each restaurant or any other service that they might avail.
Abolition of wealth tax and introduction of additiol surcharge on the super rich should increase the tax collection and will ease the work of compliance authorities. “The rich and wealthy must pay higher taxes,” Jaitley said. Gradual reduction in the corporate taxation structure from 30% to 25% to project India as an ideal investment destition would hopefully help attract investors to the tion.
Black Money Mece: More promises on this front or some solid action plan; FM remarked “Recognising the limitations under the existing legislation, we have taken a considered decision to ect a comprehensive new law on black money to specifically deal with such money stashed away abroad. To this end, I propose to introduce a Bill in the current Session of the Parliament.” Also a new and more comprehensive Bemi Transactions (Prohibition) Bill would be introduced in the current session of the parliament to curb suspicious monetary transactions.
For Modi’s Make-In-India to be a success, merely a budget is not enough. Though, this budget sets right the strategic pillars needed to boost our tion’s manufacturing sector; work ethic and cultural changes, abolition of red tapism, promotion of entrepreneurship at educatiol level, skill development and many other factors must be worked towards in sync with infrastructure development and creation of an ecosystem that supports the manufacturing sector. Simplification of taxation especially for corporate businesses is positive to attract investment. Introduction of GST is eagerly awaited by many sections of the Industry.
FM Jaitley remarked “We also have to encourage and grow the spirit of entrepreneurship in India and support new start-ups. Thus can our youth turn from being job-seekers, to job-creators?” For the benefit of small companies and to facilitate the inflow of technology the rate of tax on royalty and fees for technical services has been reduced to 10% from 25%. Also, Jaitley announced the formation of a new establishment mely SETU (Self-Employment and Talent Utilisation). He said “SETU will be a Techno-Fincial, Incubation and Facilitation Programme to support all aspects of start-up businesses, and other self-employment activities, particularly in technology-driven areas.” An initial Rs 1,000 crore has been set aside in NITI Aayog for this purpose. All these are steps in the right direction, but budget is just a facilitator, good governce and successful implementation of such reforms mean more to make Make-In-India a success.
(Writer can be reached at bhaskar12del @gmail.com)