A good Budget, but not a pathbreaking one. ------------------------------------------------------------------ Great expectations have been built up in the run up to the Union Budget 2009. Pathbreaking and giant steps are needed to meet great expectations. Though the budget was benign, it has not taken any pathbreaking steps. 144% increase in the outlay for NREGS, substantial increase in the outlay for rural housing, rural health & other social sector schemes are steps in the right direction to boost domestic consumption as well as for inclusive growth. The modest increase in the personal income tax exemption limit & the removal surcharge on income tax will also increase disposable incomes and thereby lead to higher consumption & growth. 23% increase in the plan outlay for NHAI road projects, 59% increase in the outlay for RGGVY rural electrification projects, substantial increase in the outlay for irrigation projects etc will lead to higher infrastructure spending, thereby giving a stimulus to the economy. Maintaining the excise duty and service tax rates at the same earlier reduced 8% & 10% respectively is also benign. What the budget has missed out is not to introduce any tax concessions to encourage investments and capacity building in the industrial sector, particularly in the manfacturing sector to reduce excessive dependence on the services sector. Budget has no measures to encourage housing sector or enhance FDI. Budget has also not unveiled any roadmap on imporatant matters like modernisation of agriculture sector, pension sector reforms or creation of a long term debt market for infrastructure sector financing etc. V. Venkateswara Rao SSVG Engineering Projects Ltd.. |
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