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| Long-term in mind | | COMMENT: Keki Mistry Vice Chairman & MD, HDFC |
| Business Standard / Jul 07, 2009, 02:31 IST |
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The presentation of Budget 2009-10 has been particularly challenging for the finance minister. The markets seemed to have anticipated some big-bang measures on economic reforms, foreign direct investment and disinvestments. The finance minister has redeemed himself well on all these expectations by rightly stating that a single Budget speech cannot solve all problems, nor is the Union Budget the only instrument to do so.
The finance minister has reiterated the need to put the Indian economy back on the 9 per cent growth trajectory. This is an expenditure-centric Budget, but given the current state of the economy, there is need for a further stimulus which is proposed to be delivered through increased infrastructure spending, additional outlays on the government’s flagship programmes like the NREGA and JNNURM and a thrust on agricultural growth.
The key positives for the common man include the removal of surcharge on personal taxation and increasing the tax exemption limits. This would mean the common man would now have more disposable income to spend. Increased spending and consumption in turn stimulates demand, which is good for the economy.
The extension of tax benefits to the New Pension Scheme is a welcome measure as also the additional sweeteners that dividend paid to the Scheme Trust will be exempt from dividend distribution tax and securities transaction tax.
The abolishment of the Fringe Benefit Tax (FBT) is welcome, as it involved a great deal of unnecessary paper work for corporates while the tax collections were minimal.
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