DEAR MR. MURALI.
ATTACHING MY REACTION IN THE BODY OF MY E-MAIL. EARLIER IT WAS ERRONEOUSLY SENT AS AN ATTACHMENT.
BUDGET 2009 REACTIONS
COPACETIC BUDGET 2009
On an overall analysis, Union Budget 2009 is a copacetic budget. It is neither too tasty nor can be labeled as 'insipid'! It is more 'skewed' towards recovery from recession as the need of the hour rather than look beyond on a long-term perspective. Goal park % of 6.8 GDP growth is not beyond reach. Logically speaking, it appears a wise move in the right direction. Stumble blocks removal is top of this budget agenda. There has not been any noticeable imposition of additional burden on taxation front, both direct and indirect. To this extent, we need to be content, if not happy. No budget can create happiness across all sectors since we need to understand that there are two sides to the budget –income and expenditure. As far as possible, the budget has reached some sort of a 'harmonious balance' between the two sides. Abolishment of FBT as a long term measure does not augur well for the economy. 100% EOUs could have been allowed exemption and the rest of the industries made to 'cough up' FBT. All advanced countries do have FBT in place. To this extent, there will be a huge shortfall on FBT abolishment. Corporate taxation, in general, has been spared of any kind of 'noose round their neck'. Marginal increase from 10% to 15% on MAT is not a major hike. Customs duty & excise duty left untouched is a boon to manufacturing sectors.
On the individual tax front for women, senior citizens and general category, budget has provided some kind of 'breathing space'.
Increase of Customs duty on luxury items like gold & silver leave the have-nots unaffected and the haves do need to bear them.
Additional funds earmarked for social uplift in rural areas in power, housing, healthcare, infrastructure et al make sense and laudable at that.
Inclusive growth on a macro-level coupled with rural development & spurring of demand as well as spending appear to be the theme of the budget. It is more recession-to-recovery road map.
Fiscal deficit, though alarming, cannot be overlooked in the long-run. An analogy that can be drawn, in a nutshell, on the budget is like trying to save a patient from slipping into a coma! Recovery first and then move on to narrow the fiscal deficit. Bridging the gap will take sometime to happen.
ASHOK JAYARAM
CHARTERED ACCOUNTANT,
(The author is a chartered accountant associated with Kalyaniwalla & Mistry, Chartered Accountants,
Phone: +91-934 285 34 70
LL: 080-40 944 704
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