Budget and Gen Next: Problems and wishlists

BUDGETING FOR FUTURE: CNN-IBN panel debates and discussed the various aspects of Indian economy.

                  

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• Sonia hints at more concessions for farmers
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However, he insisted clear that the system was transparent enough and a lot of work had been done in past years. Transparency and accountability levels have gone up.

But a snap poll done among the audience still showed that was not the popular perception. A majority felt the two issues were the government’s biggest problems.

Great Expectations: Are we being taxed to death?

A snap poll among audience indicated the obvious. Most of them felt both income tax and corporate tax rates were too high for comfort.

The question that was raised in this segment was whether doing business in India – given the tax structure – conducive? The kind of tax collections this year have been stupendous and many feel the Finance Minister has the scope of cutting tax rates.

But Bhikchandani said that while 34 per cent tax was within the “bounds of reasonableness”, surcharge could be marginally reduced looking at nine per cent growth rate. “But I think the tax is within limits,” he said.

However, Taneja disagreed and said that all taxes put together made for a huge sum. “Income taxes have grown considerably and constitute for 50 per cent of the total taxes. So there’s scope for a cut,” he said.

But given the fiscal deficit situation, isn’t it easier said than done? Patnaik said the most important thing the government needed to do at this stage was to remove exemptions. “While the tax rate is 33 per cent for somebody, it’s much less for someone else. It works out to be 20 per cent for corporates,” she said, adding India had to look forward and couldn’t rely on “patchwork” all the time.

Dikshit said the problem with exemptions was the interest groups that matter in the polity. He said if corporates raised their effective rate of tax to 24-26 per cent, the government will bring down I-T rates. Dikshit also replied to Patnaik’s point about doing away with exemptions. “If I do away with exemption, the critical mass that requires that to happen becomes too huge,” he said.

Bose, however, said it was okay to give exemptions but at the same time ensure equitability.

BJP convenor Nalin Kohli joined the debate at this juncture. He said taxes were complicated issues but there was little denying that a tax cut across the line was needed. “When you look at the larger picture of budget, it’s a financial document that plans out government’s vision for one whole year. We have seen a price rise here, burdening the common man. At the same time, you have a slowdown and a hardening rupee in the international market. So at this stage a tax cut has to be done,” he insisted.

Surprisingly, Congress’s Dikshit agreed with it.