A finance minister in any country across the world needs to reconcile the variable demands of vested interests. Presenting a Union Budget in the current economic environment was always going to be a tough balancing act for any finance minister. Expectedly, the Budget focused mainly on the poor with promises of additional infrastructure spending. Government spending is expected to rise nearly 16 per cent from last year and is 7 per cent higher than set out in the pre-election Budget of mid-February. Most of this will be devoted to extra spending on roads, irrigation and power as well as a 144 per cent rise in spending on the rural employment guarantee scheme, an increased allocation for urban housing and for credit at "reasonable rates" to small businesses.
On the revenue side, firms will no doubt be disappointed by the fact that there was no change in corporate taxes, even as the abolition of fringe benefit tax brings some cheer. For individuals, the government has increased the tax exemption limit and has also done away with the surcharge that will reduce the tax burden to some extent. Overall excise, customs and service taxes were all left unchanged, although the increase in import duty on gold bars and gold jewellery won't go down well with many residents.
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