By and large the Finance Minister has presented a balanced and positive Union Budget 13-14 amidst an overall air of pessimism and slow growth. I am happy that P Chidambaram has shown a clear focus on tackling the fiscal deficit. Taxing the rich is probably the right thing to do in India so that is all right too.
The budget has by and large spared the common man. I am also happy to see some thurst given to urban housing but most importantly I hope he lives up to the hope that he has created by giving special thrust on infrastructure.
I hope we can sustain this over a longer term. The focus has been on boosting the economy, creating industrial corridors and spurring growth. The commitment to reign in the fiscal deficit is very necessary. Efforts have been directed towards widening the tax base and improving the tax compliance by introducing an amnesty scheme for the service tax payers.
Speaking on Real Estate front, the additional interest deductions available to first time home loan takers, up to Rs 25 lakh is a positive move. This is will give a boost to affordable and mid segment housing and in turn the real estate sector. However, luxury housing that is priced above Rs 1 crore will become dearer because of additional service tax. Also, the increase in the excise duty on marble will burden the cost of construction. In order to have a reporting mechanism of transactions in the real estate sector and also to collect tax at the earliest point of time, the FM has introduced 1 per cent withholding tax on transfer of immovable property of Rs 50 lakh and above (barring agricultural land).
Introduction of service tax at all air-conditioned restaurants across the board will certainly make eating out costlier and will pinch the pocket of consumers. There is also no incentive or encouragement given towards boosting the hospitality sector which plays a crucial role in employment generation and putting India on the world map. Corporate houses earning more than Rs10 crore annually, will also have to bear an additional surcharge of 5 per cent.
Cognizance has been paid to the marginalised sections of the society by providing core budgetary support. This is in keeping with the government’s commitment of inclusive governance. Information dissemination to towns having a population of over 100,000 through radio will connect these towns to the mainstream happenings of the nation. An interesting innovation is the initiative to set up the first ever PSU for women as well as to create a more secure atmosphere through the Nirbhaya Fund.
The writer is chairman, Ambuja-Neotia group