Union Budget 2011: Tax Expectations

Pranab Mukherjee, Indian politician, current F...

Pranab Mukherjee

Union Budget 2011: Tax Expectations.

Our finance minister Pranab Mukherjee will have to walk the tightrope by curbing inflation and boosting growth while addressing concerns over black money.

There are indications that the finance minister will announce increase in tax exemption but at the same time increase service tax and excise duty on manufactured products such as cars and TV sets to plug the fiscal deficit.

There is an indication that to cushion the tax blows, he may help ease petrol and diesel prices a bit by announcing tax cuts on the fuels.

There can be a tax immunity scheme that could help draw out concealed incomes to turn them into something productive.

Mukherjee may have some good news for the salaried class, with the government considering a marginal rise in the income tax exemption limit to Rs 2 lakh per year from the existing Rs 1.60 lakh to give people more money to offset inflation.

Presently, the existing annual tax exemption limits stand at Rs 1.6 lakh for men, Rs 1.9 lakh for earning women and Rs 2.4 lakh for senior citizens.

Pranab walks the tightrope – Hindustan Times.

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Celebrations and runaway inflation

Puneet Rajhans : People break into intemperate celebrations now and then. To begin with, the frenzy is entirely uncalled for but for protagonists they never tire away from listing the occasions to hail the event. Celebrations begin on a note of conveying something. Be it the arrival of a leader – on turfs as varied as polity, cars, consumer durables, or an ascent of a new star in the untapped segment, the celebrations often go overboard, showing in effect the scourge of modern-day existence. Never does this thought pass through that a vast section of humanity still lives on the margins and what to talk of being part of celebrations, they can’t even afford to entertain this train of thought. In these uncertain times, as celebrations aren’t subdued, the untamed inflation makes the entire proceedings look more tumultuous. As the spectre of runaway inflation threatens to tear apart the dreams of a tribe that is adding up at any point of time, these pompous pourings look to be more than a malfunc!
tioning in society. Just as a celebration takes place at a modern-sized plaza/villa, there would be in the vicinity lurking the enduring image of countrymen lying motionless as food hasn’t reached them for days together. More appropriate reflection in a urban setting would be people galvanised in the art of dodging others to secure water and food – the melee around a water tanker or a food stall. Just the other day a senior government functionary literally read a riot act when he lampooned others for treating inflation as a prized treatise. Inflation is not an area of concern, he had the temerity to say, adding that not much feud should be allowed on this one. But the one which throws the budget for a toss, restrains most from taking a decision can’t be dismissed as purely esoteric. Huge and huge orders for armaments are being placed, more and more currency is being poured in to upgrade the security infrastructure of men and machines but when it comes to food security it is!
nothing short of a bolt from the blue when a report talks of a scarci
ty staring in your face. When food scarcity looks more probable, the other side of fence brings the level of greed in these torrid times. Admissions to different institutions bring this to the fore. To secure an admission in a prized school/private college or a neighbourhood one, loads of currency are pumped in. For those who can’t take this route, as they find the institution to be too demanding, the best course would be to settle for next one. But it isn’t that simple as it looks. The parent concerned, having stifled his chances in the first attempt, would try to have a go at it again. Once the institution learns that more and more are willing to shell out huge sums, this does not restrain them from playing hard. As this becomes more of a precedent, this realisation begins to dawn that sectors can be won via hard cash. Similar set of sentiments rule when a new set of vehicles hit the market or a new offering has a date with the customer. This greed can never be justified. !
So inflation or a tamed one, torrid times or less churning on surface, the reality would be elusive for those who go by the dictum of money power. Let sanity return to the proceedings.

This story has been contributed by Puneet Rajhans

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Inflation in India is artificially suppressed: RBI

Rise in retail prices of fuels could raise inflation from below 4%.

In an indication that it may hold back a policy rate cut tomorrow, the Reserve Bank of India (RBI) on Monday said inflation in India was artificially “suppressed” as higher international oil prices have not been passed on to domestic consumers.

In its report on macro-economic and monetary developments a day before the third quarterly review of its 2007-08 monetary policy, RBI also said “elevated international food prices also pose potential inflationary pressures in the period ahead.” Read more of this post