- arthashastra
- kautilya (chanakya) (350-283 bc)
so, its out....quoting kautilya and praising the 1969 bank-nationalisation scheme of indira gandhi, finance minister pranab mukherjee opened the 'pranabora's briefcase' yesterday amidst high speculations. the fm has focussed on the need to put the economy back on 9% growth.
minimum alternate tax (mat) increased from 10% to 15% which will increase the cash outflow burdens for companies liable to tax.
plans are on to introduce a uniform indirect tax structure (known as goods and service tax - gst) on a dual process, at centre and state levels. for the implementation of this tax, excise duties have been raised on items like nylon, filament and lpg's. the gst is supposed to replace excise and service tax at the centre and vat at the state level. at present, most goods attract a tax rate of 20% (8% at centre and 12% at the state).
legal advice is goint to cost more. govt. has bought plastic & cosmetic surgery under service tax which means actresses and models will have to re-think before increasing or decreasing their 'assets'. interstate transportation for passengers on private carriers has been exempted which means travel rates will be lowered. since services received by exporters from goods transport commission agents would be exempted, from now on, exporters need not go through the hassle of paying the taxes before claiming refunds.
at the expense of other women and child welfare plans, the funds for 'integrated child development scheme' has been increased. by 2012, every child under the age of six will be taken care of. govt. has also proposed the 'rajiv gandhi scheme for empowerment of adolescent girls' which will provide calorie meals to girls in order to reduce the school-dropout rates. govt. will launch a 'national mission for female literacy' focussing on minorities and marginalised groups, to attain female literacy in three years. thats nice. if not more indra nooyi's at least, to keep a tab on day-to-day expenses. but, other schemes like the ones for children of working mothers,'shishu greha scheme' and 'integrated scheme for street children' have been trimmed.
its good time for hikers and rafters. the budget has introduced incentives for adventure tour equipments and road travel which could reduce air fares and room rents.
the abolition of fringe benefit tax (fbt) is a relief for corporates and advertising agencies. the huge sums that celebrity management companies had to cough out for sales promotion, publicity and brand ambassadors can be re-routed for better purposes. the stimulus package handed out to the print media (10% increase in govt. ad rates and 15% waiver fo agency commisions) will be continued.
the budget has given a boost to the accelerated power development and reforms program (apdrp) to reduce gap between power demand and supply. this will bring the loss down to 15% from the present 35%.
for the poll-bound state of maharashtra, the proposal is to provide relief to farmers and flood management program which will help the party in coming elections. for uttar pradesh, the minimum daily wage under national rural employment guarantee scheme (nregs) has been raised to 100rs. the 'big bong' railway budget was augmented with reliefs for cyclone victims for the state of west bengal. tamil nadu has been taken into account by providing relief for tamil refugees. in the elections, upa had performed well in minority dominated districts. as a return-goodie, the minority sector has been put on par with the underprivileged communities like sc's and st's. the ministry of minority affairs (moma) has struck jackpot this time. since muslims form the largest backward group, the budgetory proclamation sounds more of political than social. 'pradhan mantri adarsh gram yojana' shows a budgetory inclination towards dalits; an attempt on the part of congress to challenge the bsp or mayawati in particular or the ambedkar gram yojana in specific.
the recent terror attacks have echoed in the budget. proposal to construct dwelling units, increase the strength of para-military forces, better border management by construction of fences, roads and flood-lights to secure the eastern and western borders and the modernisation of state police forces. the bulk of the home ministry budget is for the recruitment and training of jawans in crpf, bsf, cisf, ssb, itbp, nsg and assam rifles. pensions have been hiked for soldiers and jco's. though it is not on their demand of 'one-rank one-pension', still, it has helped to reduce the disparity in the pensions of past and present retirees.
the thrust for rural development and consumption will give the food processing industry a boost which will in turn, help the customer. india can become the outsourcing destination in processed foods. prices will remain constant. i hope it brings a ray of sunshine into the life of farmers.
the budget has indeed, given a life to the i.t. sector. the extension of tax holiday for one more year would help i.t. units that would not have completed 10 years of operation (about 70% of the industry). the removal of fbt will also help. packaged software will no longer attract vat, but service tax.
120 crores have been allocated for setting up the unique identification authority of india (uidai) for providing 'unique' identity cards based on an online database with identity and biometric details that can be verified across the country. so, the ration card can now be used as a bookmark.now for matters of my interest:
wheels: nothing has been done for lowering the taxes for cars and two-wheelers. the automobile companies can heave a sigh of relief that the stimulus packages promised for them have not been touched. the additional excise duty levied on cars/utility vehicles above 2000 cc have been lowered by 5000 rs to 15, 000 rs.
booze: gst doesnt cover booze products. tax on alcohol is a state subject, attracting high taxes on an average of 70%; so the states would not want to dilute their earnings by bringing liquor under gst. this means alcoholic beverages will continue to vary across the country. i am going to bangalore and fill my kitty.
clothes: excise duty on manmade fabrics and yarn has been increased, which will help the polyester makers. the word polyester reminds me of gurukant desai from the movie 'guru'. the cost of finished products is bound to increase which will be passed on to the ones at the end of the line - the customer.
others: customs duty on gold and silver (bars, coins, ornaments) has been increased. even for lcd panels. branded jewellery has been exempted. mp3 players, mobile phones, ipods, contact lenses, set top boxes are going to cost more. tata dish and dishtv are going to pass on the hike to the customer. while soaps, detergents, shampoos and cosmetics will be cheaper, the toothbrush is going to cost more!!!.
when pranabda started his speech, the sensex was 150 points up and by the time he finished it, it was 756 points down. i would love to sit back and see how the fm is going to get the 9% growth in a way that benefits all sections of society as he promised.
