The day came and it went. The budget proposals tabled in the Parliamnet. The FM and the Govt will take credit for initiatives, the opposition will slam the policies. The Left will sit on the fence, not sure whether to support or oppose the policies. The Television channels are full of Partners from the Big 4 and just about anybody with a view of the budget. House wives are asked for their reaction, so are students from prominent B schools.

All of it looks great in the pink papers on the day following the budget or on TV, but how many people actually understand the implication? Students from some of the B school come out with analysis without ever having worked in a corporate. House wives are happy that the excise duty is reduced, but do they know if the prices will reduce. Funny as it may seem, everybody slams new taxes and expresses happiness about reduction in tax rates. But is tax rate the - all and end -all. With lower personal taxes, people will have more disposable income, however what will they do with it. For one, interest rates on housing loans are still high, and a marginal 45000 a year cannot translate into a decision to buy a house. Investments - with Short term cap gains tax increased to 15% you have dis-incentivised new investments, besides the FM has not bother to increase the ceiling under 80C. This means that higher investments in the securities market will either be subject to higher taxes (if sold within a year) or would not bring in additional tax benefits because the limits under 80C is not increased. I think the slabs should have been structured in a manner that enabled more savings. Given that employees PF contribution is already a part of the overall 80C limit, there should have been greater head room given to individuals to save. Also, the finance minister could have done away with surcharge and cess and yet given the same benefits. By increasing the slabs, the Govt has effectively ensured that the personal tax rates in India are far lower than in other developing nations. If thats the intention, then why do we still continue with subsidies. with moderation in taxes could the Govt had looked at abolishing subsidies on Cooking Gas ?

Some of you may wonder why I am trying to give back to the Govt what they have given us. Well the answer lies in the fact that currently with a bouyant economy we are in a position to absorb the cost rise. Prices should be reduced by moderating indirect taxes, by improving infrastructure and opening up of sectors like Retail (if Reliance Retail has economies to scale and better operational capabilities that allows it to price tomatoes a Re cheaper than the vendor round the corner why supress them ?). Should the Govt have not used the excess funds to provide better roads and sanitation? By giving the money back to the people, obviously the FM is trying to say that he has enough money to develop these sectors. I fear we will be a country driven by consumption and less infrastructure... a country of cars without roads !