New Delhi, Feb 28: Falling just short of big bang reforms called for by his own economic survey, finance minister Arun Jaitley Saturday presented a Rs 17.78 lakh crore (nearly $300 billion) national budget for the next fiscal that seeks to put more money in the hands of the average citizen, tackle the menace of black money more effectively and end an era of ‘scam, scandal and corruption’.
In his 93-minute budget speech in the Lok Sabha, the finance minister said a new law on black money stashed abroad will call for an imprisonment of up to 10 years on its perpetrators with a penalty of 300 per cent, while another proposed legislation will clamp down on benami property in India with both confiscation and prosecution.
This apart, the 62-year old lawyer-politician also proposed a new public procurement law for the consideration of the house that can encourage transparency in the way government buys goods and services while removing the reluctance in decision-making among the bureaucracy due to the fear of being questioned later by probe agencies.
The finance minister said while individual tax payers would stand to gain as much as Rs 440,200 by way of enhanced exemptions he has proposed in his two budgets since July last year, the corporate sector can benefit from a cut in tax rates from 30 per cent to 25 per cent over four years, albeit with a sharp reduction in the exemptions.
The other highlights of Jaitley’s budget include universal social security with health insurance coverage for the poor, a new bankruptcy law, a fresh gold monetisation scheme, the deferment of much-criticised General Anti-Avoidance Rule by two years with prospective effect, a pan-India goods and services tax regime from April 1, 2017, tax-free bonds to fund rail, roads and irrigation projects and five new ultra mega power projects.
Regarding radical liberalisation suggested by the economic survey, Jaitley sought to give an explanation.
“People who urge us to undertake big bang reforms also say that the Indian economy is a giant super tanker, or an elephant. An elephant, Madam Speaker, moves slowly but surely. Even our worst critics would admit that we have moved rapidly,” he said.
Among the various welfare programmes, the finance minister outlined a new student loan scheme for higher education, Rs.8.5-lakh credit for farmers, significant hikes in the allocations for women safety, rural job guarantee scheme, and mid-day meal programme, a new pension fund and several skilling schemes for the youth.
He also made several references to two of Prime Minister Modi’s pet projects, and said while policies outlined by him and various tax proposals were aimed to giving an impetus to “Make in India” campaign, particularly aimed at the youth and manufacturing, he also announced 100-percent tax rebate on money spent by the corporate sector towards the Swachh Bharat Abhiyan.
In the realm of taxation, Jaitley said wealth tax will be abolished, with a cess, instead, on the super rich, the service tax rate hiked, exemption limits for individual tax-payers significantly enhanced, notably in areas like insurance, excise and customs duty rationalised and corporate tax rate cut over four years from 30 per cent to 25 per cent, with the removal of a host of exemptions.
“My direct tax proposals would result in revenue loss of Rs 8,315 crore, whereas the proposals in indirect taxes are expected to yield Rs 23,383 crore. Thus, the net impact of all tax proposals would be revenue gain of Rs 15,068 crore,” the finance minister said, while also earmarking a target of Rs 41,000 crore from divestment of stake in state-run enterprises. IANS
