oppn parties Union Budget 2015-16: Doing Much Without Seeming to do Anything

News Snippets

  • Ban on international flights extended till July 31
  • Reliance launches JioMeet to take on Zoom and other virtual meeting places
  • ICMR says the Covid-19 vaccine made in India, Covaxin, might be launched as early as 15th August
  • The Permanent Court for Arbitration says India is entitled to compensation in the Italian marines' case
  • China says it is "groundless and exaggerated" to claim that it follows expansionist policies
  • In a message to China, PM Modi says the era of "expansionism" is over
  • Prime Minister Modi says India will never bow to any world power
  • Film choreographer Saroj Khan breathes her last
  • China bans access to Indian news websites
  • PM Modi says that as Unlock-02 kicks in and more people resume working, people have to follow the rules even more religiously
  • PM Modi says that all citizens need to be vigilant against people who do not follow the rules in force, like wearing masks and maintaining social distancing
  • PM Modi warns the country that with the onset of the monsoon, more seasonal diseases will strike and citizens have to be more disciplined
  • Hero Cycles to buy the struggling Atlas Cycle group
  • RIL to buy the retail businesses of Future Group
  • Import licensing to be put in place for AC's TV's and other non-essential items
Prime Minister Modi visits Leh and Nimu in Ladakh to take stock of the situation arising out of the LAC stand-off with China and praises the soldiers injured in the Galwan clash
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Union Budget 2015-16: Doing Much Without Seeming to do Anything

By Sunil Garodia
First publised on 2015-09-22 12:53:48

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
The common man will not understand the implications of the 2015 Budget presented by Arun Jaitley although it has many things that directly impact both the middle and the marginal class. This is simply because tax exemption limit has not been raised, the tax rates have not been reduced and the slabs have not been changed. After hearing so much about India being the country with the least tax free threshold, the man on the street was hoping to get the threshold up to Rs 3 lakhs. Instead, he was saddled with an increased service tax, up to 14% with an additional Swachh Bharat cess of 2% from the 12.36% that existed previously. Are these acche din, he is bound to ask?

But is it always more money in hand currently that spells acche din, or is it moving towards empowerment that will increase earnings, bring about new jobs, create better infrastructure and ensure greater social security that will bring acche din? The people have to search their souls for an honest answer to this question.

The finance minister has laid the ground rules. He will make investments in infrastructure simply because only the government seems to be capable of executing large projects â€" if required under the PPP model, which itself will be revisited. He will provide for social security through pensions with contributions from earning citizens. He will provide health cover â€" again with small contributions from citizens. He has allowed small concessions now â€" like increasing the deduction for medical insurance and doubling the transport allowance. He admitted that the fiscal space did not allow him to go for more, which he promised would come as and when the economy was stronger. He indicated that lower rates with lesser exemptions would be the flavor in future.

For the first time, a finance minister had the guts to admit that there was no point in collecting a tax where the cost of collection was higher than the total tax collected. Very wisely, Jaitley abolished Wealth Tax. Instead, persons reporting incomes over Rs 1 crore will pay an additional two percent over and above the maximum marginal rate. In a single stroke, the FM will simplify procedures, increase tax collection and avoid fruitless litigation. A side effect will be bragging rights that this government is not for the rich as it will tax them more. He has also come down hard on black money, outlining his government’s zero tolerance in this regard.

He has promised to bring down the corporate tax from 30 to 25% in four years. This will be done concurrently with the phasing out of exemptions. This will make the tax regime non-adversarial and compliance will be higher. The time limit for availing credits under Cenvat has been increased to 1 year from 6 months, allowing businesses huge flexibility and peace of mind as leakages due to not claiming in the 6 month timeframe will be prevented. The controversial GAAR has been pushed back, a strong indicator that it might be scrapped eventually. The MAT on foreign institutional investors has been scrapped, private equity funds have been allowed to get foreign investors to contribute in local funds and those setting up real estate infra funds will not be required to pay tax on property transfers.

There are several such measures that would spur investment, make India a better place to do business in, bring about transparency and a stable and non-adversarial tax regime. This will ensure rapid and incremental growth. This is a Budget that has given a lot to the man on the streets without actually giving him anything. He is still scratching his head to make sense out of it.