Let us just walk the line
Rooted in pragmatism and continuity, the Budget continues to strengthen finances with no new taxes.
By Kumar Mangalam Birla, TNN |
Rooted in pragmatism and continuity, the Budget continues to strengthen finances with no new taxes, thus acknowledging the buoyancy in collections due to economic growth. It also provides the right degree of thrust to take the country���s economic growth on a higher plane.
It reinforces the commitment to infrastructure and social sectors. It is consistent with keeping reforms on track. And it achieves the multiple objectives of social spending and growth promotion even while promoting fiscal consolidation and tax rationalisation.
A key point that comes across is tax stability ��� there are no big bang surprises, either positive or negative. And that is perhaps the way Budgets ought to be. The projections for revenue and fiscal deficit, at 2.1% and 3.8% of GDP, are impressive yet credible. These are clearly large strides. A significant improvement has also been made in improving the tax-to-GDP ratio, which is projected to go up to 11.2%. The FM has affirmed the role and efficacy of stable and moderate taxes in promoting growth and fiscal health.
It reinforces the commitment to infrastructure and social sectors. It is consistent with keeping reforms on track. And it achieves the multiple objectives of social spending and growth promotion even while promoting fiscal consolidation and tax rationalisation.
A key point that comes across is tax stability ��� there are no big bang surprises, either positive or negative. And that is perhaps the way Budgets ought to be. The projections for revenue and fiscal deficit, at 2.1% and 3.8% of GDP, are impressive yet credible. These are clearly large strides. A significant improvement has also been made in improving the tax-to-GDP ratio, which is projected to go up to 11.2%. The FM has affirmed the role and efficacy of stable and moderate taxes in promoting growth and fiscal health.
To keep the growth engine chugging, several specific sectors have been identified as growth drivers. Among them are textiles, petrochemicals, tourism, food processing, IT and gems and jewellery.The finance minister has also signalled his intention of improving power generation, specifically the announcement that five ultra mega projects will be awarded by the end of 2006.
Similarly, the rationalisation of indirect taxes is distinctly pro-growth. The Budget is consumer-friendly by having cut excise duties. Some of the more burdensome provisions of the fringe benefit tax have also been watered down.
Chairman, AV Birla Group
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