The UPA government’s proposed comprehensive indirect tax reform, goods and services tax (GST), will miss its scheduled rollout from April 1, 2010, a temporary setback to creation of a unified national market for goods and services in the country, but experts say this will give more time to the centre and states to prepare a more robust framework.
Contrary to general belief that share prices will rise ahead of the Union Budget, the expectation is that they will fall further due to the expected withdrawal of some stimulus measures, according to foreign brokerage Bank of America Merrill Lynch.
Finance Minister Pranab Mukherjee has sought assistance from the legal fraternity in simplifying the country’s direct and indirect tax norms.
At a meeting, ahead of the Budget, the minister met the Society of Indian Law Firms comprising representatives of 25 law firms in the country.
The contours of the compensation package to the States for the Central Sales Tax (CST) revenue loss that may be incurred by them during 2009-10 was decided at a meeting here at North Block today.
The country’s GDP growth for 2009-10 is seen trending higher to 6.9 per cent even as the possibility of food price inflation spilling over to cause a generalised inflation remains a major concern, according to the Reserve Bank of India’s latest review of macroeconomic and monetary developments.
Expect higher tax rates and massive disinvestment in the coming Budget to help reduce the huge fiscal deficit from 6.8% of GDP this year to 3%
over the next five years. Finance minister Pranab Mukherjee will package his higher indirect tax rates as an exit from the fiscal stimulus of 2008-09 and a return to the path of fiscal responsibility.