Budget 2015-16 reaction: Sanjay Chaturvedi
The budget 2015 is overall a good budget as far as the overall economy is concerned. The Railway budget presented earlier has already shown the direction by not introducing any additional trains, not favouring any particular par of the country and focus on improving the services without any additional cost. The Financial budget has also shown the commitment of the government to strengthen the economy. There were some hitches in the common men’s mind about increasing the cost of imports of gold, increasing the rate of service tax etc. While the interview of the finance minister on the next day of the budget cleared the concept of making gold imports costlier the increase in service tax is the only point which is found to be a negative step for the people.(1) The increase in service tax do not affect the industry too much because of the advantage of cenvat on most of the services. However, the effected one is the end consumer. The common man would be landed with an increase of cost of almost everything.
(2) The increase in the cost of cigarette, tobacco etc is a welcome step. This has been a repeat in every budget.
(3) No change in tax slabs is a shock for the people because everyone was expecting a reduction in the taxable amount. However, the finance minister has done some juglary with the figures, which I would say is an intelligent one. By reducing the tax impact the overall impact would have been the lesser revenue for the government and would have affected the people to a smaller extent. However by increasing
(a) deductions under 80D from existing 15000 to new limit of 25000 the FM has not only promoted people for more savings to get an advantage of reuduced tax but has also increased the inflow of funds in the financial markets.
(b) By increasing the exemption on the mediclaim of senior citizens from existing 20,000 to the new limit of 30,000, the FM has, again called for more investments and also have promoted the caring of senior citizens.
(c) By increasing the limit of investment in pension plans by 50,000 the same concept of increase in low cost savings with an impact of reduced tax to the common man and the investment of funds into high return securities by government has hit three targets with the same stone.
All the three points taken collectively would benefit an individual in the tax category of 30% by a net amount of 49,000
The proposal of starting some investment option for girls upto 10 years of age is also a welcome step as it is also to promote savings for girls.
Increase in excise duty is also to hit the monthly budget of the common man because the industries remain unaffected with the change due to benefit of Cenvat while the common man has to pay the landed cost including the excise duty.
Others major plan expenditures, increase in defence budget and project planning are not of much interest for the common man.
Reduction in corporate tax has nothing to do with the common men because the companies are not going to share their increased reserves with the people obviously.
At last a fix date for implementation of GST has been announced. This can also be called a major win for BJP government if they meet the deadline set by them.
Seen from wider vision, the budget is a balanced one. But, as pointed out by certain industrial associations there is impact of some double taxation at some points. The FM should welcome the suggestions and necessary changes to be implemented before the budget being adopted by the Parliament.
