New Delhi: Finance minister Arun Jaitley has focused more on reforms and less on populism in his first full year Budget. Corporate class can cheer over the reforms and cut in corporate tax but middle class seems to be disappointed by the budget as income-tax slab remains unchanged.
Prime Minister Narendra Modi had informed his finance minister a few months ago about his expectations and telling what his priorities are. The markets may have been expecting for a big bang and got disappointed but the first full Budget by Arun Jaitley can be called transformational.
The budget has focused on reforms and has taken a few measures that would provide faster growth in coming years. The budget lacks any populist idea or proposal except extension of UPA's rural job scheme MNREGA which the PM called “living proof of Congress' failure”.
Jaitley has pushed back the deadline of getting a fiscal deficit of 3% by a year, and instead he focused much more important issues. The biggest cheer for corporate sector came as the phased cut of 5% in corporate tax, a move that could attract more investment.
A tough new law against black money is one of the most significant measures taken in the budget. The experts though argue that instead of obsessing with Swiss accounts, Jaitley could have focused on outlining measures to fight domestic tax evasions.
A new bankruptcy law has also been introduced. A new bankruptcy law, long overdue, is also in the works. The General Anti-Avoidance Rules (GAAR) proposed by erstwhile UPA government has been pushed back for another couple of years. Companies had expressed their concerns over GAAR which granted more powers to revenue authorities.
Wealth tax has been replaced by a 2% surcharge on taxation for the rich. The government hopes to collect more revenue through service tax by increasing it by 2% to 14%.
No change in income-tax slabs has been the biggest disappointment for the salaried middle class. The biggest reason for 250 point fall in the Sensex can be credited to the unrealistic expectations the FM was burdened with.