While it may appear that the Govt. is not having any pressure to perform, thanks to the slow Global recovery and the threatening inflation, the Govt. needs to be alert and go for fiscal consolidation. Also there is the agenda on GST and DTC which require gradual switch over.So my expectations from the Budget are:-
1) Income Tax- with sixth pay revision across the board, the exemption limit for tax purposes need a revision to atleast Rs. 3,00,000/- to give some respite from inflation. The slab rate of tax can thereafter be 10% upto Rs. 5 lacs, 20% upto Rs. 7.5 lacs and 30% above Rs. 7.50 lacs. The surcharge on income above Rs. 10 lacs at 10% should continue. The Sec. 80C exemptions on NSC and Bank Deposits over 5 years to be withdrawn. Al other items under the section to be retained for the present. Senior citizen should be defined as one who has completed 60 years of age as most organizations retire employees at the age of 58 or 60 years. These measures will pave the way for eventual implementation of Direct Tax code provisions from 1-4-2011.
2) Indirect Tax:- with the roadmap of GST drawn, it is advised to increase CST marginally by 1 to 2% so that convergence with GST can be smooth.
3) Customs Duty across board to be softened to enable Indian Inc. to take advantage of global scenario and at the same time export sops to be protected as there is pressure on them for the same reason – slow global recovery.4) Other reforms- It should include moving towards nutrient based fertilizer subsidy( that too directly to farmers) and better pricing of petroleum products.
On the whole this budget should see the Finance Minister focusing on fiscal responsibility measures.
V.Narayanan,
A-503, Punit Park,
Nerul(e),
NaviMumbai-400706
v_narayan1@rediffmail.com
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