The Union budget came in for criticism on Monday for its “lack of innovation” and “disappointing” want of substantial measures regarding taxation.
Former Union Revenue Secretary M.R. Sivaraman dubbed it a disappointing and routine exercise.
Addressing a discussion organised by the Federation of Indian Chambers of Commerce and Industry, Tamil Nadu State Council, here, Mr. Sivaraman said there was “nothing innovative.” The only silver lining was the reduction in fiscal deficit of 5.1 per cent during the current financial year, which was expected to drop further to 4.6 per cent next year.
He lamented that inflation was a major issue and one expected the Finance Minister to break away from the past and come out with policy measures to contain it.
There was nothing regarding agricultural production, which remained at 234 million tonnes. While it was expected that India should produce 400 million tonnes by the turn of the 21st century, it was falling terribly short.
Even with regard to tax measures, there was nothing substantial and exemptions were nominal. Tax slab had not been widened. Mr. Sivaraman said nothing tangible could be done to tackle the problem of black money unless there were stringent provisions for forfeiture of assets and tax evasion was made a severely punishable offence.
M.S. Sundara Rajan, former Chairman, Indian Bank, felt there was no road map for introduction of Goods and Services Tax. By applying service tax to medical, auditing and legal services, all these would become costlier. At least these three should have been exempted.
Asit K. Barma from Defiance Technologies Ltd said the fate of the exemption for Software Technology Parks of India, which was extended last year, remained unclear.
N. Vishwanathan, advocate, said industry would be happy as import duty had been slashed. Besides, computerisation of Income Tax Department operations was a very good move.
The Madras Chamber welcomed the broad thrust of the Finance Minister's budget proposals. The increased outlay for social and farm sector development would help the march towards “inclusive growth.” T.T. Srinivasaraghavan, its president, said the decline in fiscal deficit “is indeed heartening in the context of fiscal consolidation.”
Danesh Kumar Chhabria, president of the Sindhi Chamber of Commerce, said increase in the basic exemption level for personal income tax to Rs.1.80 lakh was not sufficient.
The Tamil Chamber of Commerce lamented that imposition of service tax on hospitals and diagnostic tests would affect the middle and lower strata of society.
The Southern India Chamber of Commerce and Industry president A. Vellayan, welcoming the retention of peak level of excise duty at 10 per cent, said introduction of MAT on special economic zones and service tax on hospitals should be reconsidered.
Ambattur Industrial Estate Manufacturers' Association president R. Selvaraj said the industry, coming out of recession, was very disappointed as “there are neither concessions nor incentives worth noting.”