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Deep deficit, shallow response make hope, market sink
The unambiguous mandate that the Congress-led UPA received in the general elections had re-ignited expectations of systematic reforms over the next five years. Mukherjee did not manage expectations well and missed an opportunity to showcase UPA II’s commitment to bold actions on several fronts — be it disinvestment, labour flexibility, targeted subsidies or structural tax reforms.
On cue, the Bombay Stock Exchange Sensitive Index (Sensex) tanked 870 points or 5.83 per cent, the sharpest fall ever on a Budget day.
Mukherjee’s speech had all the accompaniments of a Budget that he would have presented 25 years ago. Old-fashioned but shrewd, the Finance Minister showered benefits on all stakeholders: marginal tax sops for the salaried, excise duty cuts on a host of items — from LCD panels to gems and jewellery — retaining excise, customs and service tax rates at existing low levels and, surprisingly, giving a bonanza to the upper middle class by doing away with the distortionary 10 per cent surcharge and doubling the threshold on wealth tax of 1 per cent to Rs 30 lakh.
He kept the central excise rate, customs duty and service tax rates intact. He hiked the minimum alternate tax for zero-tax companies to 15 per cent — not seen lightly by India Inc. Even as he did away with the commodities transaction tax, he retained the securities transaction tax creating arbitrage opportunities between two segments of financial markets. Mukherjee’s direct tax measures were revenue neutral, but in indirect taxes, the additional resource mobilization was a meagre Rs 2,000 crore.
After all, it was an expenditure budget.
He used all available resources for enhancing allocations of existing flagship programmes such as the National Rural Employment Guarantee Act.
He also set aside modest sums for new social sector schemes such as Rajiv Awas Yojana and Pradhan Mantri Adarsh Gram Yojana for villages which have a Scheduled Caste majority.
His large expenditure plan — the total spend tops Rs 10 lakh crore for the current fiscal — has given him the confidence to assume a growth rate of 7 per cent in the current fiscal with inflation stabilizing between 2 per cent and 4 per cent by March 2010.
Playing along the fiscal stimulus plan and recognising that infrastructure was one area neglected in the last few years, Mukherjee facilitated Rs 1,00,000 crore worth investment in public private partnership projects through a refinance window made available by IIFCL.
The veteran politician in Mukherjee ensured that his presentation was not chaotic — just two interruptions by Lalu Prasad Yadav and Mulayam Singh Yadav — and devoid of announcements that would evoke strong sentiments. “He did not have to make big announcements just for the market,” said Vijayan Krishnamurthy, Executive Chairman, JP Morgan AMC, adding these can be undertaken outside the Budget.
The speech, as expected after the poll outcome and the President’s speech, focused on inclusive growth and bridging the rural-urban divide by promising banking presence in all unbanked blocks, housing for urban poor, 1 per cent interest relief for farmers who paid short-term crop loans on time, 45 per cent hike in allocation for Bharat Nirman and a new scheme for 1,000 villages with Scheduled Caste majority.
Perhaps, Mukherjee believed that big-ticket reform measures need not be announced in the Budget. Yes, he did not steal the thunder of his Cabinet colleagues but did not read the pulse of the market either.
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I am really disapointed on this budget as i am owner of a Shop which i have given on rent but the tenant is unable to pay my rent with service tax( form last 9 months). He is asking to redused the rent by 75%. If i reduce my rent i will not be able to pay the interest on my investment to the bank. Government has not reduce even a single persent on service tax(i.e. 10%)on rent even in this on going recession.My sugestion is that govt is not ligible to recover the service tax from the public in this massive recession. As owner and the tenant are both facing tuff time in this recession
man o man you got to watch this team for all round development now, it is coming, oppositions WAIT N WATCH. Reaching out to the poor and lower middle class is the agenda for a upliftment. bussiness will be supported and encouraged. JAI HO.
Folks,I had warned you, If the people of India elect a louse Govt you have to face the music; and the music has just begin.
This is not a PM Manmohan Singh budget, it has the fingerprints of Madam Sonia all over it. India needs to grow, grow and grow. It is vital to generate wealth and not to be out done by our very competitive neighbours, who see us as a threat. China plans to spend US$ 74 billion on defence, we can only manage less than 30 billion. This should be a concern to all Indians.
Indians deserved UPA Govt, so got it. As has rightly been said "People get the leadership they deserve". Dont complain or weep for five years now.
The prices of essential commodities are soaring sky high and there is no respite for the middle class and lower level salaried class. The Fin Min should have immediately done something to arrest the prices of essential commodities. By raising the exemption limit of income tax by mere Rs 10,000/- and totally scrapping the surcharge on IT, the Fin Min and UPA have shown whom they are more concerned about. This policy will help the rich becomes richer and poor becomes poorer. Candys for the rich and peanuts for the poor. They are more concerned about the donation from industrialists and 100% exemption of IT on donation speaks volumnes of their concern about poor and middle clas. long live democracy.
The good part is that Pranab has put some numbers his govt wants to achieve before going for next elections. No other Finance Minister has been bold enough. The bad part is that he given sops to Maharashtra and West Bengal with elections in mind. Similarly, he has ignored Bihar just because Nitish Kumar spurned Congress. Such blatant things has not been done by any Finance Minister earlier.
This will go down in history as the worst budget ever to be presented there is no tax benefit or concessions to the salaried class.
CMP - Christain Missionery Programme
CMP - CUMMUNIST MINDED PRANOB
I feel that Mr Pronab has done bad job. He just want to impress Madam
Providing for various expenses in line with the manifesto for urban and rural support are understandable but political wastes like 500 Cr for SriLankan Tamils to appease Karunanidhi are not. Limited provision for divestment from PSUs shows a weak attitude It is high time the Govt accelerated the divestment process from PSUs dompanies and banks and released the money generated for infrastructure health and education of the poor Infrastructure will create jobs and help in the country's development rather than use public money to pay salaries of fat pilots of Air India and other PSU companies as is being done so far. Eulogising Indira Gandhi for nationalising banks in this day and age is nothing short of disgusting How neech and subservient can you get Bonga babu? Chidambaram would never have said that
there has nothing for farmers and middle class. i am unable to see any benefit for middle class people?
India missed the opportunity big time at the last elections. The money, of course, ill gotten at the expense of the poor people, sitting in the Swiss Banks and owned by corrupt politiciaians and bureacrarts, is enoough or more than enough to cover the Central Deficit. You brought the known corrupt people back in power. Have fun. Can't wosh you good luck.
Fraud Government and fruad budget
The budget is another example of a mediocre stance from Mukherjee, who should now retire. The budget in my opinion, provides a band-aid to a larger issue facing the nation. What encouragement is there, if any, for businesses to re-invest and create jobs for the rural poor? Are there any new infrastructure projects that can bring jobs to the villages? We complain about the cities being choked, but private enterprise needs incentives to accomplish such a feat.
If the likes of BJP does not approve of the budget, then it is definately good for aam admi and ofcourse India.Jai Hind.
Is this budget is for Aam admi or khaas admi, disappointed middle class section
It is very good and well speculated budget which will help the poor known as 'aam aadmi'.As usual the taliban like sanghis are displeased as they were when the nuclear deal with USA took place.
The Finance Minister couldnot have presented a Budget satisying all secions of the people,the corporates,governments.etc in the existing conditions of financial deficit faced by the Government. Perhaps the Stock market had already anticipated a beter deal and had discounted the expectations by a thousand points in sensex before presentation of the budget built over a few months but had to fall down thorugh the ladder by over 850 points..alas..the poor retail ivestors lost a lot on the Budget day.The Corporates expected better allotmens from the Government...but having come to power recently spending huge amounts the Government perhaps thought it uncessary to present a better budget satisfying all. As it is known the incomes have increased as a result of Pay Commission , wage revision,etc of.The salalried class could have been given a better deal by increasing the IT Limit by another lakh of rupees. Budeget could have exteneded certain benefits in IT rates to all over 60 years.
With all the blablaon the "aamadmi", neither the poor nor the middleclass have got anything from this Budget. The true character of this Government is slowly but surely emerging. The Congress has never been supportive of the salaried class and the middle class. They continue to be betrayed.Our vote has gone a BIG WASTE.
A very poor exercise by the Bengali babu. Waste of valuable time of the taxpayer. Increase in tax exemption limit by Rs.10000/- to others and Rs15000/- to senior citizens is pitiable. Oh! Bengali babu is also a senior citizen is this the reason?. Withdrawl of 10% surcharge is a boon to the aam Admi. Is this an aam admi's budget? Are you aware who is paying 10% surcharge? With the implementation of Pay commission Recommendations a lot was expected of this Bengali babu. He proved no better than a Bengali Communist. Regret for having brought the Congress back to power. Why Rs500 crores for rehabilitation of Tamils. This is nation's money and the taxpayer's money. Why spend this to rehabilitate people who are not of this nation.
The budget has frustrated the middleclass. there is no adquate concessions in the incometax.Why the deficit problem is left unattended is not explained too?
The budget has frustrated the middleclass. there is no adquate concessions in the incometax.Why the deficit problem is left unattended is not explained too?
Has enough amount been keept in the budget for the Quttorochis for the fiscal year! He may visit India any time and be ready to fly out with handsome amount.