New Delhi, Jan. 8: Jaswant Singh did not get to make a speech in Parliament today, but he did present the budget — well, almost.
Confirming — if any were needed — early polls, the finance minister sought to make the jump from “feel good” to “feel great”, as BJP president M. Venkaiah Naidu said the other day, delivering a colourful bouquet of measures to the middle class.
Air travel will be cheaper by 15 per cent from tomorrow, prices of personal computers and laptops will drop Rs 1,500-2,000 and high-end cellphones should cost Rs 1,000 less as a gung-ho industry decided to pass on to consumers the benefits of a rash of excise and customs duty reductions.
Although the finance ministry was not putting a figure out, rough calculations show the concessions — led by a cut in peak customs duty on all non-agricultural products from 25 to 20 per cent — add up to Rs 8,000 crore in loss of revenue in a full year.
In last year’s budget, the giveaways amounted to only Rs 2,955 crore, making today’s measures much more than just a mini budget.
Jaswant Singh defended the sops, claiming that “faster growth will offset the revenue (loss). The impact on revenue will be temporary. These measures will, in fact, greatly enhance growth and stimulate investment”.
The mini budget left little doubt that elections will be held early. It is obvious now the full budget will not be presented on the traditional last day of February, and only after the elections.
The government slashed duties on computers, cellphones, life-saving drugs and aviation fuel and scrapped the tax on air travel — domestic and foreign.
Along with a cut in the peak customs rate, it withdrew the 4 per cent special additional import duty on all goods.
Salaried employees with earnings up to Rs 1.5 lakh a year, whose taxes were being deducted and paid by their employers, need not file tax returns.
Pensioners without a taxable income will also be exempt from filing returns even if they own mobile phones, cars or houses.
“What benefits the common people, we are not against it. But it is clear that this has been done to bribe the people. Had they really wanted to give some relief to the people, why didn’t they think of this earlier'” Congress leader Manmohan Singh asked.
The new lower duties will come into effect from January and the direct tax provisions — there are no changes in rates but only in rules — from April 1.
“The growth momentum is strong and what the finance ministry is trying to do is to give the economy a boost,” said chief economic adviser Ashok Lahiri.
Even without knowledge of the Delhi stimulant, the stock market in Mumbai sizzled, ruing only that the announcements hit at a time trading was about to close. The sensitive index, which tracks the market mood, swung up by over 151 points to end at 6108, the highest closing in history.
Jubilation over Jaswant Singh’s gifts is still left for tomorrow.
Before the finance minister announced the slew of sops, there was a meeting of the BJP Big Four — Atal Bihari Vajpayee, L.K. Advani, Jaswant Singh and Venkaiah Naidu — in the morning. Customs duty on most infotech products and cellphones is being halved to 5 per cent. Excise duty on computers has been cut from 16 to 8 per cent. Recorded video compact discs and digital video discs have been completely exempted from excise.
Import duty on coal stands reduced from 25 to 15 per cent, a move that will help the booming steel and aluminium industries.