Not many of us understand Finance or the
financial implications of the Budget ~ yet there is so much clamour to hear and
discuss the budget.. ! Union Finance
Minister P Chidambaram presented his 8th Union Budget and India 's 82nd.
This is the last Union Budget before the 2014 Lok Sabha elections. May not have any direct
relationship – the rate of pure gold 24K was Rs.2967/- per gram as against 3009
on 18.2.13; the standard gold was Rs.2774/- per gram as against 2813 of
18.2.13.
Chidambaram in his budget speech spoke of
‘Global economic growth slowing from 3.9 percent in 2011 to 3.2 percent in
2012’. He stated that India is part of the global
economy: our exports and imports amount to 43 percent of GDP and two-way
external sector transactions have risen to 108 percent of GDP. We are not
unaffected by what happens in the rest of the world and our economy too has
slowed after 2010-11. He added that however, there is no reason for gloom or
pessimism. Even now, of the large countries of the world, only China and Indonesia
are growing faster than India
in 2012-13. And in 2013-14, if we grow at the rate projected by many
forecasters, only China will
grow faster than India .
A simple search on Budget highlights yielded
some of the following :
• Tax credit of Rs. 2,000 for income upto
Rs. 5 lakh
• Surcharge of 10 per cent for taxable
incomes above Rs. 1 crore, No review of tax slabs
• Excise duty on SUVs to be increased to
30 per cent from 27 per cent, SUVs registered as taxis exempted
• Rs 532 crore to make post offices part
of core banking
• Duty-free limits raised to Rs 50000 for
men and Rs 1 lakh for women
• 18% rise in excise duty on Cigarattes,
cigars and cheerots
• Service tax on all A/C restaurants
• Royalty tax hiked from 10% to 25%
• Tax Deducted at Source to be fixed at 1%
on land deals over Rs 50 lakh
• No change in peak custom, excise rates.
• 5 to 10 per cent surcharge on domestic
companies whose taxable income exceeds Rs 10 crore
I have nothing to cheer or jeer, as none of the
above would seemingly affect me or alter my way of life, in any way. Then there is announcement about all-woman banks across the country. There are women entrepreneurs, women heading
bank branches and a couple of them heading banks too…. Is there any necessity
for ‘all-women’ bank and in which would that help the women of India
? Are not banks today funding
entrepreneurial initiatives by women?, that only an exclusive bank would
do. Anyway, our FM has announced an
allocation of Rs 1,000 crore as initial capital to start the first all-woman
bank that employs women, helps fund enterprises started by women.
There is another – Rs.1,000 crore Nirbhaya fund.
Chidambaram urged the Ministry of Women and Child Development to figure out
ways and strategies to utilise the fund in a way that it helps women be secure
in public spaces. There have been some incidents recently which have cast
shadow on the safety of women in public places. There certainly is need for
curbing any violence anywhere against women, especially in public places and
that way more funds to Law Enforcement Agencies, clearer directions and
stringent laws are the need of the hour.
May be, we have more ‘All women Police Stations, with those (wo)manning
those equipped with good vehicles and sophisticated equipments’. The FM also announced a Rs 200
crore-allocation to the Ministry of Women and Child Development to make sure
that vulnerable women – single mothers, widows and suchlike – are taken care of
and can live with dignity.
If you are a salaried employee and expected some
relief ~ there is nothing in your way. There will be no change in tax rates or
slabs for FY14, Finance Minister P Chidambaram said in his Budget speech. He
has announced a tax credit of Rs 2000 for Rs 2-5 lakh tax payers bracket.
Chidambaram said that only 42,800 people in India last year declared a taxable
income over Rs 1 crore. Therefore, he levied a surcharge of 10% on people
earning a taxable income of Rs 1 crore and above ~ a la ‘super rich tax’.
White is right in India in almost every respect
except income — where only black is the King – people flout all rules and how
many of us can claim totally clean ? Sad,
that the FM has admitted that there are only 42800 who admitted to a taxable
income exceeding 1 crore per year; does not the Govt, FM, the authorities know
that this figure is obviously low ~ with so many luxury cars getting sold,
there should be tens of thousands in each city. Will the Govt ever have the gumption to punish
all those tax offenders. A seemingly
popular measure announced in today’s budget is the increase in the tax
deduction allowed on home loan interest by Rs 1 lakh. Currently a deduction of
Rs 1.5 lakh is allowed to someone buying his first home. The extra deduction of
Rs 1 lakh comes with caveats. The first caveat is that the house should be
bought during the period between April 1, 2013, and March 31, 2014. The home
loan taken should not be more than Rs 25 lakh. And the value of the house being
bought should not exceed Rs 40 lakh; if you add another couple of warranties as
we put on policies, perhaps you can exclude almost all……….
The Minister also suggested initiation of pilot
programme on Nutri-Farms for introducing new crop varieties that are rich in
micro-nutrients such as iron-rich bajra, protein-rich maize and zinc-rich
wheat. He has proposed to provide a sum
of upto `200 crore to start the pilots. Ministry of Agriculture will formulate
a scheme and he hopes that that agri
businesses and farmers will come together to start a sufficient number of
pilots in the districts most affected by malnutrition.
That is Budget 2013-14 for you, Happy ? The
only thing that made it interesting for me was his concluding quote from
Thiruvalluvar :
கலங்காது கண்ட வினைக்கண் துளங்காது
தூக்கங் கடிந்து செயல்.
~ meaning - "What clearly eye discerns as right, with
steadfast will; and mind unslumbering, that should man fulfil".
With regards – S. Sampathkumar
28th Feb 2013