“The world is predicting that it is India ‘s chance to fly”, says Finance Minister Arun Jaitley
By Siva Sivapragasam
“The credibility of the Indian economy has been re-established. The world is predicting that it’s India’s chance to fly. As the PM has mentioned many times — we are a round-the-clock, round-the-year government,” Finance Minister Jaitley proudly remarked last Saturday as he presented the Narendra Modi Government’s first Budget in the Lok Sabha last Saturday.
A staggering seventy thousand crore rupee investment has been allocated in the Union Budget for public spending on India’s infrastructure to stimulate growth in the Indian economy.
A proposal for a 5 per cent cut in corporate tax, abolition of wealth tax and it’s replacement of an additional 2 per cent surcharge on the tax collected from the super-rich with incomes in excess of Rs. 1 crore, are some of the tax proposals introduced in the budget.
Presenting the Modi government’s first full-year budget in Parliament, Union Finance Minister Arun Jaitley said the corporate tax was proposed to be lowered from 30 per cent to 25 per cent over the next four years and would go hand in hand with a rollback in sops and exemptions companies enjoyed.
Mr. Jaitley left untouched personal income tax rates for 2015-16, but gifted the middle class with a higher limit for deduction of Rs. 25,000 on health insurance premium against the existing Rs. 15,000. The limit will go up from Rs. 20,000 to Rs 30,000 for senior citizens. The proposals, said Mr. Jaitley, would not only promote health care but also enhance the savings rate in the economy. The budget also raised excise duty and service tax rates, pushing up retail prices of several goods and services.
Locally manufactured mobile handsets, tablets, microwave ovens and packaged fruits are likely to be cheaper on reductions proposed in various duties and taxes. Mr. Jaitley proposed a 25 per cent hike in the duty on cigarettes, cigars and cheroots. The key construction industry input, cement, too is likely to become costlier. The service tax plus education cess is proposed to be hiked from 12.36 per cent to 14 per cent which is likely to increase costs of air travel, eating out and beauty services.
Commenting on the 2015 Budget, former finance Minister in the Congress regime Harward educated Palaniappan Chidambaram has stated that the Modi government’s first full Budget “Just pleases the corporates and the income – tax payers.The budget has failed the fiscal test, the test of equity, and the test of rising inequality.”