Today Hon’ble Finance Minister (FM) presented his budget for FY2011-12. These are my immediate comments on seeing the live broadcast.
For the initial years of UPA government, I had great expectations like rest of India on then dream team headed by Dr.Manmohan Singh. But over the last 6 Years it has diminished and now I am happy if Government just stays on course.
So on today’s budget and FM, I had very low expectations, but for that FM seems to have done well. He hasn’t done anything new or path-breaking, but thank god he hasn’t messed up anything either. He has retained Service Tax @10% itself which is good for many of us like me in Services Industry. He has promised easier refunds for Service Tax on input services that go into Exports and on some cases there will be Exemption coupons as well – I wonder what took the government so many years to see this.
I was not expecting STPI (Software Technology Parks of India) 10A/B Income Tax exemption to continue beyond 31st March 2011 and FM didn’t extend it, so I am not disappointed with that. But the FM introduced up MAT (Minimum Alternate Tax) on SEZ (Special Economic Zones) at around 18% tax, which basically renders SEZ useless from attracting new investments. The North Block of the Government headed by the FM has to be made to travel to China to understand the true meaning of SEZ and why they are important to generate employment for millions of young Indians.
To inject growth into overall Economy FM has announced some good measures like Tax Exemptions for Cold Storage for Foods products, a much-needed thing to address routing of food products. He talked at length on the E-Governance initiatives, introduction of more Central Processing Centres (CPC) that is currently operating in Bangalore for Income Tax Returns Processing, Process of TDS E-Filing getting stabilized (Is it there are many gaps and mistakes happening on this ), exemption from Employees to file their TDS returns as it is already filled by their Employers and so on. All these E-Governance measures are good news for IT biggies who are involved in these, but nothing for SME (Small & Medium) IT Companies.
Lastly, no announcement of much awaited GST (Goods and Service Tax), Labour Reforms, Reforms in FDI, measures to address Inflation and budget deficits are big disappointments.
(Key Highlights of the Budget is available here from NIC Website)