Union Budget has 'dampened' economic sentiments: BJP

Opposition BJP today criticised the Union Budget 2012-13 saying it has "dampened" economic sentiments as almost all services have been brought under tax ambit.

"The approach of this Budget is to tax people where we can tax. This is a retrograde approach," Leader of the Opposition Arun Jaitley said initiating the debate on the General Budget in the Rajya Sabha.

He said while people had expected the budget to give a boost to the economy, "The Budget has ended up doing exactly the opposite".

Holding that the budget has been prepared with a pre-1991 mindset when the country opened the doors to liberalisation, Jaitley said the government has also decided to tax "people even on what they spend" while there has been little effort to widen the economic activity.

"You have decided to tax all types of services, making us one of the highest tax paying societies in the world. The entire tax structure could be 15 to 16% of what an individual earns," he said, demanding a relook.

He said the 12% service tax, which the Finance Minister has proposed across every activity, is "excessive" and will lead to inflammatory pressure.

Jaitley said the budget has also failed to "correct the environment" where there is high interest rate, infrastructure slowdown and reverse flight of capital".

He demanded that illegal activities like betting, gambling and lottery be brought under tax net and decision to amend the Customs Act, that seeks to bring bail provisions of POTA and TADA under it, reconsidered.