The finance minister has reassured that the government would not resort to retrospective taxation in future.
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“The government has rightly realised that a sustainable and equitable growth model can not be built as long as the rural economy is in distress, ” said Kanoria.
Ahead of crucial regional elections, the Indian government on Monday announced a pro-agriculture budget, allocating 877.65 billion rupees ($12.8 billion) for rural development in the fiscal year starting from April, up from 795.26 billion rupees a year ago. Now, income tax of 10 per cent will be levied on person owning patent registered in India and exploiting overseas instead of 30 per cent earlier, he said.
Mr Advani said the Budget has made “unprecedented” provision for accelerating and modernising India’s infrastructure in critical areas such as highways, railways and rural roads.
Pointing out that Indian economy is growing at 7.6% in 2015-16 despite a slowing global economy, the Finance Minister credited the Modi government for the steps taken in the last 21 months which according to him are “very big”.
His government is expected to increase spending on agriculture, health and social sectors, a change from its focus on infrastructure spending and market reforms, they said. The Budget has promised that a bill to amend the Companies Act, 2013, will be introduced in the current Budget Session of Parliament to ensure an enabling environment for startups. The budget didn’t mention much about the electronic segment at all, we need to go through the fine print to delve deeper into it. It is great to see that both corporates and salaried employees are relieved in the budget as there is an improved cash flow for the middle class due to various tax reliefs.
The Hindu nationalist Rashtriya Swayamsevak Sangh (RSS), the powerful ideological parent of Modi’s Bharatiya Janata Party (BJP), has also been urging the government to do more to help distressed farmers. “Uttarakhand’s economy is mainly based on tourism and and we have been neglected in this budget”, Sharma said. However, the Financial Times reported that investors were unimpressed by the lack of bold economic reforms, with the stock market also crashing during Jaitley’s speech. “The planned investment in these two critical sectors will not only create jobs but also give impetus to demand generation and economic growth”, Walmart India president and CEO Krish Iyer said.
“We have the sacred responsibility to spend it prudently and wisely for the welfare of our people, especially the poor and the downtrodden”, the finance minister said.
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To get more investment in Asset Reconstruction Companies (ARCs), the Union Finance Minister proposed to provide a complete pass through of income-tax to securitisation trusts including trusts of ARCs.
