CA Pooja Indani
Everyone has closely opened their eyes for budget which has announced by our Hon’ble Finance Minister Mr.Arun Jaitley for the F.Y. 2014-15. After hike in railway & oil prices people had not lose there hopes for ‘AACHE DIN’ & budget has also moved towards it to the extent.
In the budget Finance Minister has touched all the sectors. In short, there was something for everyone in the budget basket of FM. But with that also for some sectors good days are yet to come.
In the start of budget speech F.M. has set a target for fiscal deficit of 4.1% of GDP which is little bit overambitious and also targeted to bring it down to 3% in 2016-17 which is also a challenging task for the government because, as a writer I haven’t seen any major reforms has taken in this budget to lift the economy at such faster rate. FM has picked correct lane to achieve this target i.e. reviving growth in manufacturing and infrastructure sectors but major growth showing sectors have not been considered which might be because he wanted to boost other low growing sectors but with that keeping the fiscal deficit with such a low % of GDP is challenging task in itself.
incentives have been provided to sectors like fertilizer, food which highly contribute to country’s export so that they can improve there performance and can contribute to the development of whole economy. As, major source for generating employment in India is through manufacturing sector and if manufacturing sector grow rapidly it will lead to reduce % of unemployment in the country to the extent, which will in turn helpful for the economy to increase its Gross Domestic Product.
The NDA government has increased the percentage amount of subsidy to be allocated to fertilizer sector by Rs. 5000 Cr. Over the allocation made by outgoing UPA government in its interim budget 14-15, with this there is some hope of better performance by fertilizer sector. Some more benefits were needed to the agricultural sector i.e. Indian farmers should have been ‘DIRECTLY’ benefited from the huge amount sanctioned to them. As, the whole growth cycle of economy begins with the growth in agricultural sector.
FACTORS CONSIDERED FOR MANUFACTURING UNITS IN UNION BUDGET:-
Some of the following changes have been observed:-
1) To boost the domestic production of electronic items & reduce our dependence on imports, custom duty has imposed on certain electronic items.
2) To encourage production of LCD & LED TV’s below 19 inches in India, basic custom duty on LCD & LED TV panels of below 19 inches reduced from 10% to Nil.
3) To give an impetus to the stainless steel industry, increase in basic custom duty on imported flat rolled products of stainless steel from 5 to 7.5 %.
4) To incentivize expansion of processing capacity, reduction in specified food processing and packaging machinery from 10% to 6%.
5) Reduction in Excise Duty from 12% to 6% on footwear of retail price exceeding Rs. 500/pair but not exceeding Rs.1000/pair.
So these are some of the manufacturing sectors are considered by the FM. But, if country is targeting of having fiscal deficit of 4.1% of GDP in FY. 14-15, then to contribute in the growth rate of country by manufacturing units, petroleum, oil sector would have been considered by FM as due to huge amount of importation of the same economy is suffering .According to the statistical data collected it has been observed that % increase in importation of petroleum crude product from may 13 to may 14 was 28.7% as compared to exportation of it for the same duration % increment was only 2.45%,hence this sector needs a major reforms.
Secondly, by imposing import duty on electrical items like LCD LED TV’s to improve the performance of these domestic industries, but it hardly contributes to the growth of economy. No doubt because of this norm these industries will grow but gradually. To achieve the target of reducing fiscal deficit government should have considered some other major growing sectors too like leather & leather relating products, jewelry sector etc.
At the end what remains in the hands of common man is to hope for good change. Lets see how the government tackle with all these issues to curtail fiscal deficit .
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018