Swetha KannanPriyanka Jayashankar
As February 28 draws closer, moguls of India Inc, small-time businessmen, homemakers, professionals and tillers of the soil wait with bated breath for an economic wind of change. It is a day when the nation's most anticipated vision document the annual Budget is laid in front of an expectant audience. A day when newspapers and television channels work overtime to bring out post-Budget reactions, impact analysis and sound bytes from those who matter or care to share an opinion.
Can P. Chidambaram play Santa and dole out goodies to everyone? Come February and the entire nation has this single expectation from every Finance Minister. As always, taxes particularly raising the exemption limit on personal income tax and prices of essential commodities are uppermost on people's mind.
Brig J. L. Sood, an exporter, wants the Finance Minister to go easy on the common man. "Why should the salaried class be burdened with huge taxes, especially on essential items such as cooking gas," he asks. Padmanabhan wants LPG and petrol prices regularised in this Budget, rather than "frequent revisions throughout the year to adjust deficits in other areas."
For the salaried classes, income tax provokes hot debate at all times Carton Of Cigarettes Price. While the hike in I-T exemption limit is on everyone's mind, there are other grievances too. Periodic revision is not good, says Padmanabhan, and hopes the Budget will streamline I-T for the organised sector, once and for all.
S. Venkataraman, a Chennai-based insurance and investment consultant Marlboro Cigarette Types, is clear on what aspects of I-T this year's Budget should look into. "There are three factors: increase tax exemption limit on pension fund premium from Rs 10,000 to Rs 30,000 (Section 80 CCC-1) and the exemption limit for medical insurance premium under Section 80 D from Rs 10,000 to Rs 20,000.
"Currently there is a tax rebate under Section 88 on savings schemes such as PPF, LIC, NSC, housing loan repayment (with a cap of Rs 70,000) and infrastructure bonds, totalling Rs 1 lakh. Instead of bifurcating the two, the Rs 70,000 ceiling must be done away with and we must be allowed a single common block of Rs 1 lakh," he says.
Mahadevan, a retired engineer working for an NGO, says the Government must fix minimum wages and working hours for senior citizens since many supplement their pension with part-time jobs. "We need more job opportunities in the social sector," he says.
As most pensioners cannot afford high-quality medical treatment Brands Of Cigarettes, Chennai-based financial analyst and accountant N. Venkateswaran suggests that people above 60 years should receive free medical aid even in private hospitals. To fund such a scheme, the Government can impose a medical cess during the earning years of employees.
High import duties have escalated the cost of medical treatment. "Today, people feel medical treatment is not within the reach of the common man," says Sheela Ketan, Deputy General Manager (operations), Apollo Speciality Hospitals, Chennai. Mohandas Pai, CFO and Director (Finance and Administration), Infosys Technologies, hopes the Budget will shed more clarity on the I-T Act. Under Section 10A/10B, the export turnover excludes forex expenses incurred on technical services provided outside India. This denies the company the exemption on profits from exports, he says.
Other issues that fox software exporters relate to export proceeds and exemptions for new export units. "It is unclear whether the tax withheld overseas would constitute export turnover, since that amount cannot be remitted to India in convertible foreign exchange Marlboro Menthol Lights," he explains.
Hopes abound that the Budget would stay in sync with the latest business trends in the software sector. Of late, software vendors use tie-ups to provide multi-year services. Partners who do not bill the client directly lose out on I-T benefits. The Infosys CFO suggests that Section 10A/10B should be "extended to support manufacturers providing value addition."
Organic food exporters have their woes before the B-day. A five-year tax holiday tops the wish list of N. Subramanian, Managing Director, Enfield Agrobase. A concessional 6 to 7 per cent interest rate on working capital and term loans will also perk up the industry, he says.
The sales tax system is hardly a bed of roses for fledgling SMEs. "The Government should waive purchase tax on agricultural items and sales tax on agro-based products, as they deter the growth of organic farming," he says.
In the WTO regime, domestic manufacturers of organic food have to compete with farmers from developed countries who receive heavy subsidies. For instance, the farming sector in the US will receive more than $10 billion in the next five years through Government incentives. Subramanian suggests that lower air freight and shipping charges would help Indian players compete in the international market.
Some believe that India Inc. is a tad over-taxed. Financial analyst Venkateswaran says corporate tax must be brought down from 35 per cent to 30 per cent. "To fully develop the country, corporates should be allowed to generate more capital internally through lower tax rates," he says.
The brick-and-mortar sector appears bullish on the economy. Sukumar Srinivas, MD, Shankara Pipe, a Bangalore-based steel pipes SME, says that the VAT regime will streamline taxes. However, the Government must focus on infrastructure development, "as the per capita consumption of steel in the country is extremely low."
With the introduction of VAT in April, jewellers too look ahead to a good year. Princeson Jose, MD, Prince Jewellery, says VAT will bring in "uniform taxation" and remove "price differentials between States".
The FM, he says, is known for his industry-friendly Budgets and therefore expects the Government to de-structure the jewellery trade by liberalising it. He hopes the import duty on polished diamonds and gold is scrapped, so that the gold price becomes "internationally matched" and more buyers come to India. This will generate more employment and encourage people to set up factories.
Brig Sood calls for labour reforms, especially in manufacturing and export-oriented units. Small manufacturers must be freed from the ambit of rigid laws and encouraged to export more. He also supports the hire-and-fire policy so that "we do not carry deadwood in the name of social protection. The Government can lay down conditions such as non-performance and absenteeism for such a policy."
But with the Left comrades breathing down the FM's neck, this wish is hardly likely to be granted!
Show me the money!
Banking on higher capital formation, Venkateswaran thinks more people should invest their savings in the equity market. "Though the country has the highest domestic savings (28 per cent) in the world, its capital creation is minimal." The Government, on its part, should withdraw the assurance on return of interest in small saving schemes Organic Cigarettes. This will induce more high-income earners to bid for equity stocks, he says.
And it must place a White Paper in Parliament periodically for greater accountability, just as corporates report their performance every quarter, he says.<br/>Related articles:<br/> Nbt Herbal Cigarettes
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