Bhubaneswar: Proposals in Nirmala Sitharaman’s first budget speech as the Union minister have evoked different shades of retort with diametrically opposite emotions of applaud and angst flowing in from different corners.
Expectations of a major tax relief in the present budget were not fulfilled as the Union minister’s speech did not have any mention about the much- expected hike in tax deducted at source (TDS) and standard deduction levels. The proposal for increasing special additional excise duty and road and infrastructure cess by one rupee for both petrol and diesel was yet another blow for public in general
Analysts also feel that that Sitharama’s speech failed to give any specific focus on creation of jobs, at a time when the country had been pained by job losses in almost all sectors. Similarly, pointed out an analyst, withdrawal of basic customs duty for newsprint, paint a gloomy picture for the newspaper industry in general.
While there are the gloomy sides of the budget, there are some points to cheer as well. Union finance minister’s budget proposal to give Rs 70,000 crore of capital to banks to boost credit flow is one such positive step, feel analysts.
Analysts are however in two minds on the proposal to increase the surcharge for those earning Rs 2-5 cr to three per cent and for those earnings above Rs 5 crore to seven per cent. While a section feel that this the right path to tax the richer more to contribute for the country’s revenue and growth, another section feels that this proposal is uncompetitive and will force many individuals to fade away to lower tax levels.
According to analysts, one major positive point in this year’s budget proposal is to merge the non- resident Indian NRI) Portfolio Investment Scheme Route with that of Foreign Portfolio Investment (FPI scheme. This according to them, will give NRI’s an easier access to Indian equities.
Meanwhile, the stock market has already reacted negatively to the proposal to increase the minimum public holding in listed companies from 25 per cent to 35 per cent. The BSE Index’s decline by 400 points is probably because of the apprehension that this proposal will prompt international investors listed in Indian houses to delist.
Analysts, however, confused on how the proposal to levy a 2 per cent TDS on cash withdrawal exceeding Rs. 1 crore from a bank account will be effective. “The proposal sounds positive. But I am not really sure on how will the government react in checking the tendency to divide such withdrawals from multiple accounts,” said a senior analyst.
Finally analysts in general have welcomed the decision to give more power to the Reserve Bank of India (RBI) to regulate the non banking finance companies (NBFCs). “This in an extremely positive step considering the looming doubts over activities of many such entities,” said an analyst.
