Some of the steps taken towards tax administration and social welfare measures are positive highlights of this Budget. In order to make the Government’s social and infra spend effective, a good monitoring and audit system through independent accounting firms across the country is critical. Even if 1% of spend towards audit is actioned, the productivity of spend will increase by 3 times and we will see intent matching action; Intent has to grow beyond mere announcement in the newspapers. Equity of economic growth through social spend will also curtail inflation in the long run and help economic growth.
One is surprised (though happy) to see no change in service tax rate. Is this a hint that GST rate will be sub 20%? If so, this would be good.
We have managed fiscal deficit owing to the oil scenario. Capital asset formation is not happening and we are not seeing much measures in that direction. Exports are key. With present exchange rates and the “Make in India” campaign, exports should have been given some thrust. We cannot bank on present oil prices to support our forex needs in long run. Taxing Dividend in hands of individual is retrograde. As profit is already after tax and there is dividend tax of 20%, another tax in the hands of the individual is unwarranted. It will also impact HNIs investing in start-ups / encouraging enterprise. Capital market has lot more role to play for economic growth and this could have been avoided.
Technuter.com News Service