Common man budget

View on The budget by Chetan.Chougule B.COM A.C.A
It looks like P Chidambaram and Co is very much inspired by the “RobinHood” story. This year Government has a record tax collection even surpassing the budgeted estimates. The excess tax collection has totally been diverted to Farm Loan waiver of Rs. 60000 cr.
I don’t think farmers suicide rate will go down with this wavier. The same farmer will apply for fresh loan next year.
Exemption Limit.
Finance minister has taken a bold decision of increasing the tax emption limit and reducing the tax rates. I think this tax rate structure will prevail for the next 3 to 4 years. Individuals will have more money in their hand to spend or invest. But this tax cut may not be a good news for IT employees. The struggling sector due to US recession and Dollar will cut the salaries of the employees to the extent of benefit they get from this tax savings.
Education:
The increased allocation to Education sector is welcome. The strength of India is its
young generation. 50% of Indians are below 30 age. Education is of prime importance for nation building.
Increase in Short Term Capital Gain:
With the increase in Short Term capital gain on shares by 5% Investors may hold their shares for Mid Term to Long Term. But we may see a reduction in daily turnover in stock market which is not a good sign.
Corporate to Gain Nothing:
This years record tax collection is largely contributed by corporate sector. There are no reductions in FBT and corporate taxes in this budget. The reduction in Excise duty will be passed on to consumers.
In all it is a common man budget. Due to the American pressure on Nuclear Deal , if the deal go through we may see a early elections. With this budget it looks like Government is getting ready for early election.
Chetan.Chougule B.COM A.C.A