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| Budget to boost growth | | | Though the Finance Minister unexpect
edly did not change the tax slab in his bud
get proposals that he presented in the Parliamenton Saturday he did announce several reforms to boost growth and job creation. The focus was on eradicating black money, creating a social safety net, boosting manufacturing, abolishing the wealth tax with a 2 per cent surcharge on the super rich, and increased deductions on health insurance for the middle class.Well In view of the continued difficult situation on India's borders with hardly any change in the attitude of Beijing and Islamabad and in the context of apprehensions about rise in terrorist activities Jaitley announced that he proposed to allocate over Rs.2.46 lakh crores for the defence sector.This amount is a gradual increase from the budget proposals made in 2013-2014 and 2014-2015 when the amount allocated for the Defence sector was Rs.2.03 laklh crores and Rs.2.29 lakh crores respectively.Besides this Jaitley has assured the Lok Sabha that the Government will lay emphasis on procurement of latest and sophisticated weapons and explosives for upgrading the punch system with the Armed forces.In addition to this outlay for the Defence sector the BJP led NDA Government has already unfolded its plan on attracting global investment in defence sector by way of helping the country in achieving "Make in India" goal in manufacturing of missiles,long range guns,aircrafts for the Armed forces and the fighter planes besides the submarines.However,hike in service tax is going pinch people as they may have to spend a fortune on various consumer items and in saloons and hotels. In a bid to boost manufacturing, the Finance Minister proposed a cut in customs duty on 22 items. The corporate tax is being reduced from 30 per cent to 25 per cent over four years by cutting exemptions.Several steps were announced on black money. Quoting of PAN number will be mandatory for cash transactions above Rs 1 lakh. Measures will also be announced to cut down on cash transactions and boost debit and credit card transactions. Benami transactions law will be introduced to check property. Prison sentence has been announced for those violating laws on foreign assets.A new social safety net has been kicked off with low-cost pension and insurance schemes, including Atal Pension Yojana and Universal Social Security scheme.The Atal Pension Yojana will provide a defined pension according to the contribution. Of this, 50 per cent contribution would be made by the government.Govt will create a refinance agency, Mudra Bank, with an initial corpus of Rs 20,000 crore to provide credit facilities to SC/ST businesses. There were also sops for start-ups by the youth.Transport allowance has been increased from Rs 800 to 1,600 per month. Pension contributions will get exemption of Rs 50,000. Health insurance deduction has been increased from Rs 15,000 to Rs 25,000.Service tax has been increased from 12.36 per cent to 14 per cent, which will make everything from eating out to mobile bills costlier.There is a big push for infrastructure with four UMPPs with investment of Rs 1 lakh crore. More thrust on roads and railways with tax free bonds. MGNREGA allocation will be enhanced by Rs 5,000 crore, if additional funds are available.
By not raising the tax slab Jaitley has disappointed several lakh employees working in Government and private sector.After the implementation of 6th Pay commission recommendations Government employees draw lucrative monthly salary and those working in the private sector earn more than the Government employees.A tax slab of Rs.1.60 lakh to Rs.2.50 lakh is too small an amount because even the class III employees may come under the tax net.Since Jaitley announced that the recommendations of the new pay commission will be available next year he should have raised the tax slab because once the recommendations of the new pay commission were implemented it will further increase the monthly salary of all employees.Well the Finance Minister has announced setting of one AIIMs and one IIM in Jammu and Kashmir which is a good news for the people of the border state.It would have been of great help if Jaitley had included Jammu and Kashmir with West Bengal and Bihar which are to get special financial assistance from the centre.Does it indicate that the BJP is trying to woo Mamata Banerjee,west Bengal Chief Minister, and preparing to contest the upcoming Bihar Assembly elections ? It can be so but the state of Jammu and Kashmir needs liberal financial assistance for meeting various challenges in the sectors of agriculture,horticulture and energy. |
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