AT first glance, the budget may appear harmless to the middle-class. In fact, it might even appear friendly what with all those improvements in housing loan deductions and stock market investments. But make no mistake, this budget will bite the average citizen in more ways than one.

Pay more to eat

Just take the seemingly innocuous proposal to impose service tax on all air-conditioned restaurants. With most decent restaurants — we are not talking of the up-market ones here — climate-controlled, eating out will become at least another 12 per cent more expensive. Remember that restaurants are in the process of revising their price-lists even now with rising prices of food commodities.

Pay more to talk

Cellular phones are now a necessity and smartphones are increasingly becoming so as they help you do your daily business on the go. As much as 97 per cent of all telephone connections in the country are cellular. Yet, smart phones (or phones that cost more than Rs.2,000) will now become pricier with the sharp rise in excise duty to 6 per cent from 1 per cent. Apart from driving business to the grey market, this proposal will also undo the efforts to push people into using their mobiles extensively for transactions.

Pay more to watch

Mr. Chidambaram has also not spared entertainment. The four metros are now compulsorily digitised for cable connections but the Finance Minister has doubled the import duty on set-top boxes to 10 per cent making them costlier in an environment where the citizen has little choice but to comply. Never mind that the country may not have enough capacity to produce set-top boxes on the scale required. The priority is to protect those who are in that business.

Pay more to travel

Apart from these, the allocation made for fuel subsidy is also lower which means that the Centre is well set on its course of freeing prices of petroleum products. This, in turn, means that diesel and cooking gas will see a sustained rise in price if global oil prices do not retreat.

Mr. Chidambaram has also made property transactions more cumbersome. Henceforth, buyers of immovable property will have to deduct a tax of 1 per cent of the sale value where it exceeds Rs.50 lakh and remit it to the tax department.

With the pain, some gain

Balancing these proposals that will be painful to the middle-class as a whole, are the ones that will cheer a section — investors — and those planning to buy a house. The tweaked Rajiv Gandhi Equity Savings Scheme appears friendlier and will help those looking to invest in the stock market and also get a tax-break in the process. The reduction in securities transaction tax and the soon-to-come inflation-indexed bonds should also cheer up investors.

Similarly, the generous interest deduction on housing loans of Rs.1 lakh, in addition to the Rs.1.5 lakh already available, will go a long way in pushing the fence-sitters to invest in a house.


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Look beyond foreign investorsMarch 4, 2013

Budgeting in hard timesMarch 3, 2013

An opportunity missed March 2, 2013

A political, if not populist, budgetMarch 1, 2013

Sops for housing loans up to Rs. 25 lakh; luxury houses to cost moreFebruary 28, 2013

SUVs to become dearerFebruary 28, 2013

Major cut in fuel, food, fertilizer subsidiesFebruary 28, 2013

Tax credit of Rs 2,000 for persons with income up to Rs 5 lakhFebruary 28, 2013

Getting investment backMarch 1, 2013

Unimaginative and anti-people: OppositionFebruary 28, 2013

Budget 2013-14: Chidambaram takes a growth gamble on supply sideFebruary 28, 2013

Budget 2013-14: HighlightsFebruary 28, 2013

Budget 2013-14: Middle class will pay moreMarch 1, 2013

The sum of small bangsMarch 1, 2013

Scheme to promote voluntary compliance with service taxMarch 1, 2013

Not a giveaway budget, says Abhijit SenMarch 1, 2013

CTT for non-agri commodities discriminatory: MCXMarch 1, 2013

Cautious approachMarch 1, 2013

Import duty raised on set top boxesMarch 1, 2013

Farm sector not addressed holisticallyMarch 1, 2013

Tatas hail initiatives on inclusive growthMarch 1, 2013

Duty on imported cars disappoints industryMarch 1, 2013

Good economics makes for good politicsMarch 1, 2013

Blame it on Premji’s spiritMarch 1, 2013

PC effect, long live the grey marketMarch 1, 2013

Will it be better buses this time?March 1, 2013

India Inc. lauds efforts to boost economyMarch 1, 2013

Plan Expenditure 29.4% more than revised estimateMarch 1, 2013

A pragmatic budget that aims at fiscal consolidation: Keki MistryMarch 1, 2013