With just three months left for the Union Budget 2010-11, the Ministry of Finance has started the process of pre-Budget consultations. A first round of pre-Budget meetings with the various ministries has already taken place.The ministry has also written to industry bodies to send in their proposals for the Budget. It will hold discussions with the industry beginning next month.
“The work has already begun (on Budget). In line with the practice, we will have discussions with the industry on their Budget wish-list from the first week of December,” a government official said.
The meetings with industry assume importance this year since the Budget may mark unwinding of the fiscal stimulus if the economy returns to a high growth path by then. The government has stated it will not roll back the stimulus until a strong recovery is in place.
Despite the government working towards the introduction of a uniform goods and services tax (GST) from April 1, 2010, the industry has been asked to give its suggestions on taxes, including indirect taxes, such as service tax and central excise, which will be subsumed into GST once it is implemented.
In case the GST deadline is met, the changes in service tax and central excise, if any, will hold no significance. However, the implementation of GST might be delayed, as admitted by finance minister Pranab Mukherjee himself. In that case, the government may rationalise the taxes which were reduced in the last one year to provide a fiscal stimulus to the economy at the time of a slowdown.
“We are open to taking their views on all kinds of indirect taxes,” the official added.
A top official in another ministry said: “We have asked the industry to give their wish-list for the Budget. We will compile the proposals and send these to the finance ministry soon.”
In January, the finance minister is also likely to start pre-Budget consultations with different sections of the industry, economists and bankers. Revenue Secretary P V Bhide, whose tenure is coming to an end in January, may continue in the finance ministry till the Budget exercise is over, sources said.
This time, the Budget may be tabled in Parliament on February 26, the last working day of the month.
