THE UNION BUDGET 2012-13
We are on the threshold of witnessing a mega event-presentation of the the union Budget 2012-13 by the current Finance Minister, Dr.Pranab Mukherjee. This year, the Indians will look at the FM, to find out how he addresses the ballooning deficit and a slowing down economy against the backdrop of inflation concerns.
Along with the commoners major industrial bodies have already given their wish list and are keeping their fingers crossed to see what comes out from "Dr.Pranab Mukherjee's Box".
A majority of employees surveyed expect Finance Minister to increase the income tax exemption limit upto Rs.3 lakh in the upcoming Budget, in line with rising inflation; on the other hand the mining sector is seeking duty rationalization in exports along with freight charges. According to the experts, any hike in the IT exemption limits will enhance people's disposable incomes, which, in turn, will boost consumption spending as well as savings.
Agriculture sector, the darling of the government, is as usual expected to get special treatment and the SME segment wants a progressive tax regime for Corporate Tax. Many well known economists have suggested to trim down the subsidies in the fuel, fertilizer and food spaces.
Our GDP growth has already suffered due to savage hike in the interest rate structures, during the last several months, as the RBI in collusion with the government adopted puerile and hackneyed policies to stall the inflation; without properly addressing the supply side factors. It is now a given proposition that Indian GDP growth will be nowhere close to 9% that once made us so happy--we now probably have to stay put with a max-7.5% growth in FY12, given the poor quality of the FMO and a un-innovative RBI team.
It would note be an exaggeration to mentioned that the maze of problems have only accelerated during the last few months, due to lack of clarity in the policy reforms on the part of the government. In addition the state elections in between virtually, turned a statue out of a living governmental machinery. Now with the elections over, and the Congress getting a spank on the back, for their regressive, "Left-like" policies, we can hope government to be a little proactive in terms of pursuing the reform agenda. It has again been proved that as a Prime Minister, Dr.Manmohan Singh is a disaster.
Agriculture sector, the darling of the government, is as usual expected to get special treatment and the SME segment wants a progressive tax regime for Corporate Tax. Many well known economists have suggested to trim down the subsidies in the fuel, fertilizer and food spaces.
Our GDP growth has already suffered due to savage hike in the interest rate structures, during the last several months, as the RBI in collusion with the government adopted puerile and hackneyed policies to stall the inflation; without properly addressing the supply side factors. It is now a given proposition that Indian GDP growth will be nowhere close to 9% that once made us so happy--we now probably have to stay put with a max-7.5% growth in FY12, given the poor quality of the FMO and a un-innovative RBI team.
It would note be an exaggeration to mentioned that the maze of problems have only accelerated during the last few months, due to lack of clarity in the policy reforms on the part of the government. In addition the state elections in between virtually, turned a statue out of a living governmental machinery. Now with the elections over, and the Congress getting a spank on the back, for their regressive, "Left-like" policies, we can hope government to be a little proactive in terms of pursuing the reform agenda. It has again been proved that as a Prime Minister, Dr.Manmohan Singh is a disaster.
Moreover, the Finance Minister is already under server pressure to rein in the expenditure in the forthcoming budget. The weak GDP numbers for the third quarter had already rattled the India Inc and had given some indication that the much expected rebound in growth may take longer than earlier thought of.
Government’s commitment towards fiscal consolidation is the need of the hour, but a weak economic regime might prevent the government from hiking tax rates to garner more revenues, making his task to give a lift to the sagging economy, more complicated and difficult.
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