Here are some aspects of the 2008-98 India Union Budget that made the maximum impact on me:
1) Sops to farmers: On the face of it the waiver of loans to small farmers (small and marginal farmers with holdings up to 2 hectare, complete waiver plus rebates for others, total cost Rs 60,000 crore) seems a wonderful measure as I have little faith in our aid delivery system. But should there have been a blanket waiver? Couldn’t the loans terms have been extended or rates reduced to say zero interest? But I guess the impact would have been less dramatic. Economists like Swaminathan S. Anklesaria Aiyar feel this massive write-off is a big let down for the banks and weakens the banking credit system, sort of makes a joke of the public sector banks lending system.
But everyone was expecting such populist measures, as this is the last budget before the general elections next year.
But if this loan waiver is to help small farmers, I cannot help thinking of the hundreds of farmers who have taken loans from moneylenders…what happens to them?
2) Income Tax: The other important measure is the reduction of tax rates and I am all for reduction in direct taxes and who wouldn’t be! While I had hoped the FM would reduce taxes for the high income groups as well, I knew it was wishful thinking…but anyway the lowering of the direct taxes on the whole should stimulate the sluggish consumer durables sector. Here’s a nice chart from the Times of India: (attached slab)
in the case of all assesses, from Rs.110,000 to Rs.150,000, thus giving every assessee a relief at a minimum of Rs.4,000. Consequently, the four slabs and rates will be as follows:
Up to Rs.150,000 NIL
Rs.150,001 to Rs.300,000 10 per cent
Rs.300,001 to Rs.500,000 20 per cent
Rs.500,001 and above 30 per cent
• in the case of a woman assessee, from Rs.145,000 to Rs.180,000;
• in the case of a senior citizen, from Rs.195,000 to Rs.225,000.
3) Education: It’s good to hear that the education budget has been increased to Rs 38,702 crore, an increase of over Rs 9,000 crore. Some plans on the anvil:
Setting up 6000 high quality schools all over the country
16 central universities to be opened in 2008-09
3 IITs to be set up in Andhra Pradesh, Bihar and Rajasthan
Indian Institutes of Science Education and Research to be set up at Bhopal and Thiruvananthapuram
Schools of architecture and planning to be set up in Bhopal and Vijaywada.
Other institutes of higher education to be opened.
The Information Technology Ministry to set up national knowledge centres
The Mid-day Meal Scheme to be extended to all children upto upper primary level (from class I to VIII) in all areas across the country.
4) North-East: The allocation for the North-East has gone up, from Rs 14,365 crore to Rs 16,400 crore. Perhaps more should have been allocated, knowing the state of this region.
5) Health. Allocation for Healthcare too has increased, by 15 percent. The bulk of this money will go to fund the National Rural Health Mission, to take Health Care to the poor and the “the goal is to establish a fully functional community owned, decentralized health delivery system…” There has been criticism that the scheme has covered selected areas only, but hopefully the extra money provided will help the rural health delivery system to cover more of the needy. A interesting (undated) article on the importance of Rural Healthcare in India can be read here.
6) Defence: The defense budget has risen by 10 percent, but will it be of use? You can read the full article discussing this here…what it basically says is that red tape invariably delays defense spending. However, defense spending has fallen below 2 percent of GDP in more than a decade this year, so there is nothing much to cheer about.
7) Share Market: The short-term capital gains tax has gone up from 10 percent to 15 percent, a dampener for investors. If you sell your shares within the year, then this applies.
8]The Reverse Mortgage scheme for senior citizens, which I had written about in my last year’s write-up apparently failed to take off as senior citizens were unsure about the Income Tax liability. Under this scheme, those over 62 years of age can mortgage their home for 15 years whilst living in it. In return they get either a lumpsum or a monthly income from the bank which has taken the house. On the death of the senior citizen, the bank takes over the house. This year the FM has clarified that there will no tax liability on income under the Reverse Mortgage Scheme and this should help the scheme along.
A list of what’s getting expensive and what’s getting cheaper. Here’s short list:
Paper and its products
Non filter cigarettes
Unbranded petrol and diesel
From India, Mumbai
Nice & Informative one...........Dost..........But if u want more views on your topic.........post some ordinary extra.........not extra ordinary post............... Viral Shah :roll: :roll: :roll:
From India, Mumbai