University lecturer (economics), New Delhi
The Budget does not offer any substantial relief to the already hard-pressed salaried class. The proposals provide a mere relief of Rs1,000 in income tax, which is inconsequential. The education cess has been increased by 1%, which offsets partially this small relief. The salaried class is the most tax-compliant category and I was hoping that the finance minister would provide a significantly higher exemption limit rather than increasing it by only Rs10,000.
A better alternative, perhaps, would have been to reintroduce standard deduction for the salaried income taxpayer. One only hopes that the marginal reduction in passenger fares and freight charges in the rail budget, reduction in the central sales tax and recent reduction in petrol and diesel prices will have some controlling effect on the rate of inflation.
I hope that the benefit of the proposed reduction in import duties on several items including edible oils will be passed on to the consumer and monthly household expenditure will be reduced to some extent. In the last few months, the high rate of inflation had made it difficult to balance the household budget. One was hoping that the finance minister would take stronger measures to control the rising prices. Inclusion of more activities under the service tax net may prove to be an additional burden on some people. The proposal in the Budget for significantly raising allocations for agriculture and irrigation schemes will have a positive impact on the economy by improving farm productivity only in the long run and will not provide immediate relief. The increase in allocation for the social sectors, mainly education and health, will have a positive effect at macro level in the long run. One will have to wait for the fine print of the proposals to make a more accurate assessment