The Telegraph
Saturday , March 17 , 2012
Since 1st March, 1999
CIMA Gallary

Too little, too late

Debanjali Sen (30) is an advertising professional working in Delhi. She feels fiscal consolidation is the need of the hour. She wants to see measures to increase revenue through higher tax collection. On the income tax front, Sen is expecting the tax exemption slab to be raised to Rs 3 lakh. Also, the deduction limit under 80c may be revised to Rs 1,50,000. Sen feels infrastructure and mining need a boost. Easing of FDI caps on aviation, retail and insurance will be welcome. Fiscal discipline is the key expectation from this budget with inflation and interest rates expected to come down.

Budget reaction: This budget will pinch the pockets of common people. Tax benefit is less, only Rs 2,000 a year. This is an average budget. Gold price will go up. Not much in tax benefits. This budget will stoke inflation by increasing the prices of commodities, including oil. There is nothing for women in general.

Amit Ghosh Dastidar (43) and Swagata Guha (41) are both entrepreneurs from Calcutta. Amit leads an event management firm, while Swagata owns an interior designing company. Their daughter Sharanya is nine. Amit hopes for some relaxation of the tax exemption limit in this budget. He also expects the investment limit under 80CCF for infra bonds to go up. Swagata is hoping for a quick implementation of the GST as she is finding it difficult to expand her business that currently spans across the eastern region because of the different levels of taxation. She hopes for a simplified tax structure, especially service taxes.

Budget reaction: The budget does not bring a happy situation for us. While tax exemption has been quite negligible, increase in indirect taxes is very high. A day ago, the interest on EPF was cut. Now it increased the excise and service taxes without giving a matching tax benefit. Prices will go up. However, if GST is made operational from August, it may bring down prices.

Rajarshi Ghosh (26) is a Mumbai-based professional with a German firm. He invests in LIC and PPF to save tax. He wants the tax slabs to be overhauled, including raising the threshold for tax-free income to Rs 3 lakh from Rs 1.8 lakh per annum. He wants the government to pull out all stops to control inflation. Further, Rajarshi feels tax-saving schemes should be widened to strengthen the government’s cash reserves. He wants the government to generate awareness to enroll new taxpayers.

Budget reaction: I had expected the basic income exemption limit will be increased to Rs 3 lakh, but it has been raised only to Rs 2 lakh. I appreciate the proposal to introduce the Rajiv Gandhi Equity Scheme. However, hikes in excise duty and service tax are not good for common people. But the budget is not reform oriented. Only high income people will benefit.

Nilanjan (41) & his wife Debjani Basu (39) are partners at a Calcutta-based travel firm and also own a rural eco-tourism initiative in Midnapore, which supports an orphanage. Nilanjan wants to see a more aggressive budget this year. He wants some allocation or subsidy on electricity or equipment from the Centre for individuals who take up rural eco-tourism initiatives. Debjani particularly wants the investments she makes at her rural tourism project to bring her some tax benefit. Also, as a woman she feels she does not need any special tax treatment in terms of a higher exemption limit. A hike in the I-T exemption limit and more room to invest under Section 80c would be welcome.

Budget reaction: It is not at all a good budget. Even for self-employed people like us, there was nothing in terms of tax benefits. This would be really bad for salaried people. The basic exemption limit was expected to be raised to Rs 3 lakh. It has not been done. We are not unhappy with the increase in rail fare. But the general budget will fuel price rise. We wanted a bold budget... this was far from that.

Dr Partho Bishnu (51) is a neurosurgeon based in Calcutta. He feels the budget should focus on increasing investments in infrastructure and reduce borrowing and fiscal deficit. Dr Bishnu wants infrastructure status for education and healthcare. If the investment limit under 80C is raised to Rs 2-3 lakh, a taxpayer can invest more in infrastructure bonds. Raising the taxable income slab to Rs 3 lakh for both men and women would also be welcome. He has more on his wish list— budget should improve buying power of the rupee; increase employment opportunities, include more people in the tax net and reduce corruption

Budget reaction: This is neither a populist budget, nor a reformist one. I would say, it is a balanced budget.

However, taxpayers have to pay more. Service tax and excise duty will go up, so will diesel and petrol prices. The proposal to table a white paper on black money is a good move. It is not clear, however, how they will reduce the fiscal deficit.

Monil Chandna (33) is a regional sales manager with a private bank. Wife Akanksha (29) is a home maker. Akanksha and Monil have two sons Athrv (3+) and Kunsh (five months). Monil feels the rate of interest on housing loans has risen very high from 7-8 per cent to 11-11.5 per cent, whereas the exemption limit on home loan interest remains Rs 1.5 lakh — this he feels should go up to Rs 2.5 lakh so that salaried people are encouraged to buy property. Moreover, the 1.5-2 per cent service tax slapped on property purchase is a major deterrent as the customer is already paying stamp duty.

Budget reaction: FM has given nothing to individual tax payers. Whatever tax benefit he has proposed, will accrue to high income people. He should have increased the exemption limit on interest component of housing loan payment. I'm really unhappy on that front. Moreover, the increase in excise duty and service tax will fuel inflation. It is not a positive budget. I am disappointed.

Priyabrata Dutta (70) is a retired PSU banker. As a pensioner, he is happy with the present tax exemption limit for senior citizens. He is more concerned about the lack of social security for senior citizens in India. As a retired PSU banker he feels he is much better off than other retired people who do not earn any pension, even though he is not too happy with his own pension format. He wants to see more people being included in the pension scheme. In his travels abroad, he has noticed how aware those countries are about labour laws, social security and work culture.

Budget reaction: Pranab Mukherjee has done something for social development by allocating higher budget for education and healthcare. He has also put large emphasis on the farm sector. But the tax benefit for individual taxpayers, particularly the retired people, is a drag. The government should have done away with the tax it deducts from superannuation benefits when an employee retires.