Budget 2013 is out! Finance Minister, P. Chitambaram
recently announced the new budget aimed at improving country’s GDP which is
hitting rock bottom ever since the recession. Touted by many as a balanced and
safe budget, let’s speculate if it actually proves to be a boon for the crying
economy.
Some of the highlighting feature is the 10% tax rebate over
superrich earning over 1 crore p.a. which will surely infuse a large sum for
government for carrying out development activities. But does it mean that if a
businessman plans to make all his money white and pay all of the taxes, he
won't be able to save anything for himself. An anonymous person comments, “This is the reason people do all kind of
malpractices and this is the reason most of the big transactions takes place in
black money. USA has lot of tax exemption for the corporates generating jobs
there. In Singapore the maximum tax slab is not even of 10%. This is the reason
they are progressing so faster than us. In late 1990s the mobile tariffs were
very high so hardly any operator was able to make money but when calls charges
were dropped, number of mobile users rose exponentially. In similar way if
government will decrease the tax rates than many more people will try to do
transaction in white money any tax collected will be much more than it is now,
which will be more beneficial for Indian economy and everyone of us”.
Over the years, budget has very little to offer the IT
industry. However this year there are few major announcements which promised to
stir some wind in Indian IT industry. Excise duty is planned to increase by 6%
on mobiles which means even costlier mobiles than already overprized mobiles.
The direct impact will be on small companies like Micromax who may get the
benefit of being a less costly brand than premium brands like Samsung, Apple,
HTC. From consumer’s front, it will be quite a blow for them.
There are a flurry of proposals to boost local products like
indian mobiles and set top boxes. Digitization will force millions of people to
buy set top boxes. Cheap indian counterparts may benefit largely from it. The
increased excise duty on gadgets is an indirect way of encouraging companies to
setup manufacturing facilities in country itself. Those investing 100 crore or
more enjoy a deduction of investment amount of 15% over current depreciation
rates.
Outsourcing, which plays an important role in economy
suffers from vague tax demands. However BPOs will have some respite as PC
promised to look into the issue. However most of the problems went unaddressed.
Indian Semi-conductor industry seems to get major benefits
as custom duty will be waived off from plant and machinery offering a
productive ground for chip makers to set up their base in India. This may in
the run of the mill counter the increased taxes on mobiles causing inflation in
rates. However, it is far sighted and only time will tell the value of seeds
that we sow.
2000 crores have been infused in Science & Technology
which will fund all those organizations who work towards providing innovative
and fresh concepts and need government’s support to shelve their product
commercially. Research will have a major boost which is a positive move and will
prove beneficial for India. Same goes for Real time banking solutions. "Post offices will become part of the
core banking solution and offer real time banking services. I propose to
provide Rs 532 crore for the project in 2013-14," Finance Minister P
Chidambaram said.
There were some positive moves and taxes will play an
important role in deciding future of the country. However more taxes and
already existing inflation will cost a lot of suffering to common man and major
industries alike. It will be a hard road from here on for government to face
some flakes and fumes by common man.
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