Budget 07-08

We had a very encouraging Railway Budget from our Railway Minister and it was indeed very popular one. But, Mr. Chidambaram hasn’t pleased all with his budget. Many whom he tried to please aren’t happy with the budget.

I wouldn’t rate this budget as good, as the one by our Railway minister, but what I shall say is that although Mr. P Chidambaram, has tried to fight a few issues like inflation, education, tax woes, many believe that he could have offered more.

With the proposed cuts in customs for Edible Oils, Food processing machinery, Cement and steel it is a clear indication that the Budget was aimed at cutting prices, to control inflation. New Tax exemptions slabs are in place as, The exemption limit has been raised by Rs 10,000 to Rs 1,10,000, For women its Rs 1,45,000and for Senior citizens the limit is Rs 1,95,000. The exemption limit on bank cash transaction tax has been increased to Rs 50,000.

While the FM, encourages saving he has also levied a 1% increase in educational cess, on all taxes.

So How’s the budget actually affected you? Things like Television sets, Cell Phones, refrigerators, coffee, medical equipment, footwear have become cheaper, while goods like motorcycles, tea, cars, softwares, cigarettes, pulses and grains have become costlier. Although these small things do matter a lot for the average middle class family, many have given a thumbs down to the budget.

One of the prominent critics of the budget – The Left, has said that the budget isn’t keen on taming inflation. In a IBNlive.com report,

Coming down heavily on the budget, CPI-M said that the Government has failed to deliver resources to warrant its rhetoric that the budget serves the cause of the crisis-ridden peasantry, the working people and the poor.

The party also said that

Finance Minister P Chidambaram failed to seriously address the problems of unemployment and inflation and did not exploit the many opportunities for additional resource mobilisation, especially by taxing the rich whose income shares have increased.

The Left has also raised an important issue that the budget fails to address the woes of farmers committing suicides and fails to allocate resources to the affected.

And the opposition couldn’t be silent. In their view the budget lacks zing and has failed to address inflation.As quoted in an IBNlive.com report,

It’s a budget that lacks zing, lacks concrete steps, fails to address the problem of inflation and does not takes into account any measures either for the industry or the agriculture

The UPA government was going tom-tom about its special packages to the rural sector. But at the ground level, the budget failed to bring any hope for the distressed rural sector.

The left is skeptical about the promises actually reaching out to the aam admi, because such financial promises often do not translate into action—as was the case with the prime ministers much hyped package for farmers in Vidarbha.

The opposition has only welcomed the additional 1% educational cess, which shall be used to fund secondary education.

Another major highlight was the hike in the defense budget allocation to Rs. 96000 Crore.

Chidambaram said that the allocation of Rs 96,000 crore would include a whopping Rs 41,922 crore for capital expenditure or acquisition of new hardware, signaling that the armed forces would go ahead with some big ticket weapons deals.

I believe this is a just move, since we move in to many deals with other nations for fighter jets, and other combat equipment. What I would like to say here is that rather than just spending upon acquiring new machine, more emphasis should be laid on easing the lives of the jawans on the border front. The life they live on the border at sub zero temperatures it torturing. May be some day we realize that spending money on buying combat equipment is a waste and use the same in preparing human resources to help during natural calamities. I mean, someday we find a war-less world.

How did the PM react to this?

The PM, soon after the budget said that it was ‘Anti – inflationary’ and added that the prime focus of the budget was education and health care. As in an IBNlive.com report,

Singh said that the budget put a lot of emphasis on improving access to social services and social safety net. Also, adequate measures have been taken to tackle the rising inflation in this budget:

The Prime Minister, an economist by profession, pointed out that the whole system of reduction of custom and excise duties would also strengthen the anti-inflationary bias of the Budget.

In another report, the PM asked back, on what more do you want from the budget, and said that the exemptions provided were just and adequate.

“What more can we give, my friend?” was Prime Minister Manmohan Singh’s riposte when he was asked if the government had not dashed the hopes of taxpayers who were aspiring for exemption limit to go up to Rs 1,50,000.

But there’s more for the Tax payer,

…the Budget does have something new for the tax-payer as it proposes to deduct interest paid on loans taken for education of children or spouse from the taxable income. The amendment in Section 80E of the Income Tax Act, as proposed in the Budget, would expand the scope of those availing of this benefit.

Frankly speaking, expecting tax exemptions to increase every year isn’t a good thing from the Indian Voting community. Although I do not earn now, I can say that the FM, has a better idea of the amount of taxes he’s collecting and thus he know hown much money would be required by the government to fund the development process. However every one does have the right to ask if he misuses it, or spends unnecessarily.

My Take on the Budget:

Well, I would rate it 7/10.

That’s because there was lots expected from the budget, which remained unsatisfied. May be since the budget is not yet passed in the parliament as yet, he can amend the changes, and do what’s required. Although he has taken steps to address inflation, I still feel more can be done in this regard. And I’m not expecting a tax exemption, A reason being that if youm escape tax here there shall be some in direct means through which you shall be taxed, so better not to expect and keep the process of basic commodities at an affordable range, if not dirty cheap.

Access the Budget text here from IBNlive.com site.