02-28-2006, 10:54 PM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Rs 72,000 crore! </b>
Pioneer.com
Amit Goel / New Delhi
That's the additional tax burden on aam aadmi----- An increase of Rs 72,000 crore in tax collections in 2006-07 - that is Mr P Chidambaram's Budget for you, ironically described as a Budget for the common man by none other than Prime Minister Manmohan Singh.
According to Budget proposals presented by the Finance Minister, total tax collections during 2006-07 will be Rs 4,42,153 crore in 2006-07, up from Rs 3,70,141 crore in 2005-06. This figure could be higher given Mr Chidambaram's track record of underplaying tax collections and overplaying expenditure on education, health, farm and social sectors. In other words, he collects more taxes than he proposes to and spends much lesser on many of these sectors than he promises.
In the last Budget, Mr Chidambaram had projected Rs 17,000 crore collection by way of service tax but he ended up collecting Rs 24,000 crore, more than 40 per cent higher. In 2006-07, he expects to collect Rs 34,000 crore, which the experts feel could touch Rs 50,000 crore as he has increased the rate from 10 per cent to 12 per cent and brought in more industries under the service tax net.
On Budget eve, Mr P Chidambaram said, "I did not burn the midnight oil to prepare the Budget. I am a satisfied man because I have been guided by three factors in preparing the Budget - the PM, who is an acknowledged expert himself; two, the common minimum programme (CMP) of the UPA Government and three, by my conscience."
Knowing Mr Chidambaram, the 2006-07 Budget clearly does not reflect his conscience. It also does not reflect the conscience of the PM. The third factor, that is, the CMP, seems to be the case that has played a major role in this Budget. Taxing the already taxed and putting the collections in unproductive areas seems to be the objective of the Budget.
<b>Most part of his two-hour Budget speech sounded like a politician tapping for votes and desperately trying to hang on to power by pleasing those who can bring him down.</b> Consider this: All these years the country was made to believe that the Government will exit from the business of business, that is, it will disinvest from PSUs. This exercise was started by the present PM himself in 1991. It was more aggressively pursued by the BJP Government or to be more specific, by Mr Arun Shourie as its Disinvestment Minister. Then came the UPA Government supported by the Left parties. <b>In twenty months, P Chidambaram has done a complete reversal of the 15-year-old disinvestment policy. He has provided for investing Rs 16,000 crore as equity in PSUs - so why were PSUs disinvested in the first place?</b>
Two, he has heavily provided for investments in education, health and employment. Good intentions, no doubt, but past experiences have shown that this money seldom reaches those it has been earmarked for. Funds have never been a constraint, they have always been provided for. It has been the utilisation which has been the issue. The FM's speech has no word on that but a lot of money earmarked for something called "Bharat Nirman" - Rs 1,72,000 crore, in fact.
Service tax, which is becoming a major issue with the salaried class or middle class, has been increased to 12 per cent and Mr Chidambaram has clearly started that it will be brought at par with excise duty on manufactured goods. <b>The Finance Minister collected Rs 23,000 crore from service tax alone in 2005-06, when it was levied at the rate of 10 per cent. He has now increased it by 2 per cent and included several more sectors like executive class air travel, ATM operations, share transfer agents, public relations services, credit and debit cards, registrars and bankers of public issues of equity shares, business support services.</b> From this, the FM expects to rake in Rs 34,500 crore in 2006-07.
This extra burden on the common has been levied without providing relief in Income-Tax slabs, which have remained unchanged. The total revenue expected from I-T in 2006-07 is Rs 77,409 crore.
This is in addition to the excise duty which the common man pays on the purchase of goods. <b>The Government's total collection of excise duty for 2006-07 is expected to be around Rs 119,000 crore, up from Rs 112,000 crore in 2005-06.</b> He has also levied a special countervailing duty of 4 per cent on all imports to collect an additional Rs 8,000 crore.
Even while Mr Chidambaram poses to be farmer-friendly by announcing a series of measures, a close look at the subsidies tell a different story.<b> The total subsidies bill of the Government for 2006-07 is pegged at Rs 46,213 crore, down by Rs 600 crore from the 2005-06 figure of Rs 46,874 crore.</b>
But it's not all bad news. The good news is that small cars (up to 1,500 cc) will now get cheaper as the excise duty on them has been slashed from 24% to 16%
Quickly responding to the FM's statement, car major Hyundai announced a Rs 23,000 cut on Santro prices. This apart, Maruti announced its small car prices to dive by Rs 13,000 to Rs 22,000.
<b>* Service tax now 12% </b>
<b>* ATM tax may be passed on</b>
<b>* Pay more for computers </b>
* No new incentives on savings
* Token changes in FBT
* Oil companies left gasping
*<b> Pasta tax-free, not idli-dosa </b>
* PM says common man's Budget
<b>Sensex record</b>
Mumbai: Markets closed on a firm note on Budget day, with Sensex and Nifty scaling new all-time highs at both intraday and closing levels. The Sensex settled with a gain of 88.15 points at a new record closing high of 10,370.24, after scaling an all-time intraday high of 10,422.65. The NSE Nifty closed 7.25 points up at 3,074.70.
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Pioneer.com
Amit Goel / New Delhi
That's the additional tax burden on aam aadmi----- An increase of Rs 72,000 crore in tax collections in 2006-07 - that is Mr P Chidambaram's Budget for you, ironically described as a Budget for the common man by none other than Prime Minister Manmohan Singh.
According to Budget proposals presented by the Finance Minister, total tax collections during 2006-07 will be Rs 4,42,153 crore in 2006-07, up from Rs 3,70,141 crore in 2005-06. This figure could be higher given Mr Chidambaram's track record of underplaying tax collections and overplaying expenditure on education, health, farm and social sectors. In other words, he collects more taxes than he proposes to and spends much lesser on many of these sectors than he promises.
In the last Budget, Mr Chidambaram had projected Rs 17,000 crore collection by way of service tax but he ended up collecting Rs 24,000 crore, more than 40 per cent higher. In 2006-07, he expects to collect Rs 34,000 crore, which the experts feel could touch Rs 50,000 crore as he has increased the rate from 10 per cent to 12 per cent and brought in more industries under the service tax net.
On Budget eve, Mr P Chidambaram said, "I did not burn the midnight oil to prepare the Budget. I am a satisfied man because I have been guided by three factors in preparing the Budget - the PM, who is an acknowledged expert himself; two, the common minimum programme (CMP) of the UPA Government and three, by my conscience."
Knowing Mr Chidambaram, the 2006-07 Budget clearly does not reflect his conscience. It also does not reflect the conscience of the PM. The third factor, that is, the CMP, seems to be the case that has played a major role in this Budget. Taxing the already taxed and putting the collections in unproductive areas seems to be the objective of the Budget.
<b>Most part of his two-hour Budget speech sounded like a politician tapping for votes and desperately trying to hang on to power by pleasing those who can bring him down.</b> Consider this: All these years the country was made to believe that the Government will exit from the business of business, that is, it will disinvest from PSUs. This exercise was started by the present PM himself in 1991. It was more aggressively pursued by the BJP Government or to be more specific, by Mr Arun Shourie as its Disinvestment Minister. Then came the UPA Government supported by the Left parties. <b>In twenty months, P Chidambaram has done a complete reversal of the 15-year-old disinvestment policy. He has provided for investing Rs 16,000 crore as equity in PSUs - so why were PSUs disinvested in the first place?</b>
Two, he has heavily provided for investments in education, health and employment. Good intentions, no doubt, but past experiences have shown that this money seldom reaches those it has been earmarked for. Funds have never been a constraint, they have always been provided for. It has been the utilisation which has been the issue. The FM's speech has no word on that but a lot of money earmarked for something called "Bharat Nirman" - Rs 1,72,000 crore, in fact.
Service tax, which is becoming a major issue with the salaried class or middle class, has been increased to 12 per cent and Mr Chidambaram has clearly started that it will be brought at par with excise duty on manufactured goods. <b>The Finance Minister collected Rs 23,000 crore from service tax alone in 2005-06, when it was levied at the rate of 10 per cent. He has now increased it by 2 per cent and included several more sectors like executive class air travel, ATM operations, share transfer agents, public relations services, credit and debit cards, registrars and bankers of public issues of equity shares, business support services.</b> From this, the FM expects to rake in Rs 34,500 crore in 2006-07.
This extra burden on the common has been levied without providing relief in Income-Tax slabs, which have remained unchanged. The total revenue expected from I-T in 2006-07 is Rs 77,409 crore.
This is in addition to the excise duty which the common man pays on the purchase of goods. <b>The Government's total collection of excise duty for 2006-07 is expected to be around Rs 119,000 crore, up from Rs 112,000 crore in 2005-06.</b> He has also levied a special countervailing duty of 4 per cent on all imports to collect an additional Rs 8,000 crore.
Even while Mr Chidambaram poses to be farmer-friendly by announcing a series of measures, a close look at the subsidies tell a different story.<b> The total subsidies bill of the Government for 2006-07 is pegged at Rs 46,213 crore, down by Rs 600 crore from the 2005-06 figure of Rs 46,874 crore.</b>
But it's not all bad news. The good news is that small cars (up to 1,500 cc) will now get cheaper as the excise duty on them has been slashed from 24% to 16%
Quickly responding to the FM's statement, car major Hyundai announced a Rs 23,000 cut on Santro prices. This apart, Maruti announced its small car prices to dive by Rs 13,000 to Rs 22,000.
<b>* Service tax now 12% </b>
<b>* ATM tax may be passed on</b>
<b>* Pay more for computers </b>
* No new incentives on savings
* Token changes in FBT
* Oil companies left gasping
*<b> Pasta tax-free, not idli-dosa </b>
* PM says common man's Budget
<b>Sensex record</b>
Mumbai: Markets closed on a firm note on Budget day, with Sensex and Nifty scaling new all-time highs at both intraday and closing levels. The Sensex settled with a gain of 88.15 points at a new record closing high of 10,370.24, after scaling an all-time intraday high of 10,422.65. The NSE Nifty closed 7.25 points up at 3,074.70.
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