WHETHER THE UNION BUDGET HAS EMPOWERED GROWTH OF ECONOMY
Sitting with a few economist friend during the night of 5th July( 6th July in India) we found despite a bold budget aiming at higher growth and making provision of better domestic consumption the budget never looked populist and might not enthuse the share market. immediately.
The budget is a balanced budget. The impact of the budget would be seen in time to come. The knee jerk reaction of market is not the real views of the market.
The Fiance minister aimed at 9% growth rate over the years, abolished CTT in shares and commodity. The infrastructure sectors have been due importance. There is nothing more in corporate taxes but that should not have been negative impact.
The finance Minister also gave some relief to senior citizen, women and general public. The recommendation of the finance minsiter in respect of fertilizer to farmers directly is noteworthy. The finance minister intent on agriculture was shuttle but positive.
The finance minister have clearly stated that Banking and insurance would remain in public sector. This is good move. But have not liked by most of the specialist economist. But if we notice even in openi economy of America banks have come under government control following recession.
This is a very intelligent budget. This is not a pular budget but a wise budget since there is clear signal that the country is going to have better fiscal control. He kept the expenditure going. rationalization of tax cannot be done in a short time. It is reformist move. Announcement of new tax code is a good direction. The rise of MAT from 10% to 15% is
hurting the sentiments rather than real loss to corporate. It is extremely tax reformist.
I am delight FBT has gone. He has given 45 days for new code. The market is over reacting on MAT. The disinvestment have not been shuttly brought in and not been clearly mentioned in the speech. But that could be more professional approach than political.
During last thirty years fiscal deficit have been always 10% every year. The finance minister has tried to bring it down now. This is a good signal. According to us at Los Angles the budget is very intelligent budget though popular views may be different.
Many of us feel that exemption of tax on pension benefit is ging to be a far reaching
proposal. This point has to be noted because pensioner would be greatly benefited in due course of time. This is becuase ne pension scheme would be applicable to common persons also.
The senior citizen would get from now onward exemption limit of Rs 2.40 lakh, women would get Rs 1.90 lakh and general public would get Rs1.60lakh. This would give substantial benefit to common IT payers.
Perhaps abolition of Fringe Benefit Tax would give a brighter smile to corporate sector though no corporate tax has been reduced.
It is a futuristic budget which has aimed for the betterment of society and poorer section of people. I am sure market may react like small school boy who have not been given a lollipop but it bound to come up soon as soon as the implications and real intention of the finance minister is clear to them.
________________________________________
Gautam Prasad Baroowah
WebSite: http://gpbaroowah.esmartweb.com/
My Blog: http://gpbaroowah.blogspot.com
|
|
