UNION BUDGET’07

In a nutshell PC delivered a politically correct budget, with an emphasis on distributing the profits of a booming economy to aam aadmi.

UNION BUDGET’07

In a nutshell PC delivered a politically correct budget, with an emphasis on distributing the profits of a booming economy to aam aadmi.

This is how PC summarises his budget:- "The big message is that growth story is intact. The other message is that we are now distributing the gains of growth to a larger number of people."

UNION BUDGET’07

In a nutshell PC delivered a politically correct budget, with an emphasis on distributing the profits of a booming economy to aam aadmi.

This is how PC summarises his budget:- "The big message is that growth story is intact. The other message is that we are now distributing the gains of growth to a larger number of people."

The +ve things outlined for aam aadmi are:-

• focus on health, education and agriculture
• allocation for irrigation increased maize and pulses mission
• one hundred thousand scholarships for children
• jobs for the physically challenged
• social security for one crore families through an insurance scheme
• seven million structures for ground water recharge
• restructuring of over a thousand ITI’s

Well the markets have not responded positively(though not negatively also) that’s because FM has left those sectors sortta untouched, not much change in big picture. In words of etbudget.com :- as far as corporates and markets are concerned, it was a mixed bag. Stock market operators, investors and investors are particularly unhappy with the increase in dividend distribution tax by 2.5 percent and bring all knowledge-based companies under the minimum alternative tax (MAT).

A big issue worrying economic experts was how will FM deal with the increasing inflation which is at an all-time high. Yes you Guessed it, our man PC has a solution:-

Deduction in ad valorem component of excise duty on petrol and diesel from 8% to 6%. Import duty cut for non-agricultural products from 12.5% to 10% and cut on most chemicals and plastics from 12.5% to 7.5%, may also help. Biscuits with MRP less than Rs 50 per kg, food mixes and instant mixes are now fully exempt from excise. Exemption limit for SSIs is raised from Rs.1 crore to Rs 1.5 crore, which may also help lower prices. All customs duty cuts and excise duty cuts are disinflationary addressing the supply side

For the middleclass (who happen to be the people who pay their taxes most religiously..ppl like me) the budget didin’t had any surprises. Contrary to pre-budget rumours on increase of invetsment limit for tax exemption upto 2lacs, it was only increased by 10K. instead, the education cess has been raised by 1%(industriey are crying over this point)

So, to summarise FM really came out with a politically budget. Some good points like emphasis on agriculture , education and health sector. A little more emphasis on indusrty would have been good, but how far can one ignore agriculture?? As for inflation, I’m that learned on this topic, but the points mentioned by FM look good….