Union Finance Minister Mr.P.Chidambaram presented his 8th budget of Rs.16,65,297 lakh crores of rupees with biggest allocation of 2 lakh 3 thousand 672 thousand for defence expenditure. Mostly it is static to allocation. Inflation, fiscal deficit in current account, lower growth rates continue to be cause of concern for the Government.
Although as feared he announced no drastic cut in the subsidies but he has not given the expected relief in Income Tax either by enhancing the tax limit from 2 to 3 lakhs. He allowed slash of 2000 rupees for the Income Tax payees is the range of 2 to 5 lakh Income per year. Perhaps taking a clue from the American President Barak Obama, he imposed 10 per cent surcharge in super rich earning more than one crores of rupees per annum, for one year only. This super surcharge is also applicable to the companies earning more than 10 crores in a year. At present in the country of 110 crores people only 42,800 earn more than one crore in a year and overall there are 1 lakh 80 thousand people who are Income Tax payees.
This picture show that we as a nation are nearer to poverty and far away from being rich people. The other IT slabs of 20 to 30 per cent continue as it is. The Budget is higher by 29.3 per cent than the previous budget which was above 14 lakh crores. It reflects the impact of inflation and price rise. The fiscal deficit would remain at 5.2 per cent and it is hoped that in the year 13-14 it would come down 4.8 per cent. But the target to bring it down to 3 per cent will not be achieves in the coming year also. The growth rate moving around 6 per cent expected to come upto 8 per cent. But in the budget there are no indication about it. The budget has tried to give relief and incentive to battered industrial sector because high bank lending rates through upon by the Reserve Bank of India.
Mr.Chidambaram has made a provision 50,000 crores of rupees for the development of industrial infrastructure. The RBI will issue infrastructure bonds of 33,000 crores. The industries are facing dearth of skilled persons. The Government has come forward with a provision of 1000 crores of rupees to set up institutions to produce trained and skilled hands to cater the needs of the industry and society. For traditional micro, minor and medium industries there is provisions of 800 crores. Despite all this the prime need of the industry in the cheap capital as low bank lending rates. In global economies the business, trade, commerce and industrial fields the competition is also global. In developed nations are also facing recession, inflation and price rise. But their trade and industries are getting cheap bank loans at rate of 2 to 3 per cent. India will have to be a tune with such situations. The RBI must come forward with real solutions. Much more than the railways the portal services are the biggest network in India. It approach is very deep and intensive. But with private carrier services it has almost became redundant with workless ness. It is being managed with skelter staff.
Kudos to Chidambaram for giving tremendous boost to revive it into vital service to the nation again. Provision of 532 crores of rupees to modernize the Post Office and it will now function as bank with its own core banking. It is network will be biggest banking network also. It will play major role in direct cash transfer of subsidies. The postal banking sector will generate large employment potential. In this financial year cash transfer of subsidies will be introduced in the entire country and postal sector will come handy in handling it. In the Budget corporate taxes have been increased from 5 to 10 per cent and additional duty of 18 per cent on cigarettes. The import duty on imported cars and motor bikes enhanced from 75 to 100 per cent. The Finance Minister announced tax free bonds of 50,000 crores of rupees for small investors.
Founder : Late Shri Ramgopal Maheshwari