Tuesday, March 01, 2005
Indian budget for 2005-06 was presented y'day. The budget basically focuses on two things. Tax reforms and more central funded schemes for poverty alleviation (Bharat Nirman as they call it). Tax reforms are all very welcome! Standard deduction is gone. We can have consolidated deduction of upto Rs 1,00,000 on savings apart from already existing deductions on Insurance and Housing loan spending etc. It means more people including me will pay less tax and I can't be complaining about that. Women and Senior citizens will pay even less. Expanding the IT net is the way forward and I hope all these concessions to individuals and Corporates will encourage more people to pay tax. Excise and Customs duties have been slashed to bring it more closer to world standards. However more should have done to increase the service tax net. VAT is going to be in place on 1st April. Hope FM keeps his promise of doing away with Central Sales tax next year. On the second aspect of more central funded schemes, I am skeptical. I welcome any scheme for infrastructure development. But I doubt pumping money into social sector schemes like Sarva Shiksha Abhiyan, Mid day meal scheme, Antodhya Anna yojana or even the new Employment guarantee Scheme etc will have the desired effect however good their intentions may be. I think its only a case of more tax payers money going down the flush. I believe assault on Poverty can only be launched by good governance at the state level, but alas! we hardly have a handful of good state governments. And finally a tax of 0.1 % has been introduced for cash withdrawal of above Rs 10,000. Average Joe like me will naturally ask.. Who on hell are you to tax me for withdrawing my own money? Mr. PC responds by saying that its to curb Cash transactions which promote black economy and its just Rs 10 for Rs 10,000!! I can put this back to you Mr. PC, is this Rs 10 on Rs 10,000 going to prevent black money ? It can only take away my honestly earned money for absolutely no reason. One expects you to be more mature than this.