IBNLive Chat: 'FM may hike tax exemption limit'

ON TRACK: The presentation of the Budget is one of the most closely followed events.

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Keywords: JNU, Vice Chancelor

Finance Minister P Chidambaram will present the Union Budget on February 29. The presentation of the Budget is one of the most closely followed events in India as it affects almost every one in the country.

How Chidambaram is going to address the social sector this Budget? Will the Finance Minister play it safe this Budget keeping general elections in mind?

To find out all the answers, IBNLive.com organised an online chat with Vice-Chancellor of Jawaharlal Nehru University B B Bhattacharya.

Here we reproduce the full text of his chat.

Arul: The levy of service tax on the interest charges of credit card is like adding salt to the injury. The FM is requested to waive the same in this budget.

B B Bhattacharya: The problem for the Finance Minister is nearly 60 per cent of GDP now comes from service tax. Therefore he has no option but to widen the tax base to services.

Nilesh Rana: Giving greater subsidies to the farming sector is the only solution from preventing India from becoming a full time food importer.

B B Bhattacharya: Experience shows that subsidies do not increase agricultural output. Data also reveal that most subsidies benefit only rich farmers. However, given the election mood I do not expect the FM to be tough on this.

Nilesh Rana: The common man must be relieved from soaring prices of essential commodities which has almost negated the growth achieved so far in terms of economic growth.

B B Bhattacharya: The prices of essential commodities would depend critically on the agricultural growth and supply of food etc on the one hand and money supply growth on the other. Neither of them is directly related to Budget.

Amritanshu: Hi Mr Bhattacharya! how this budget will make an impact on people who are expecting to buy home this financial year?

B B Bhattacharya: Already the RBI is concerned about excessive home loans given by commercial bank. Given the sub-prime crisis witnessed in USA, I do not expect RBI to relax control on home loans.

G K KASHYAP: What measures would the FM adopt to meet the FRBM targets? The social programmes announced in the past few budgets have been a drastic failure; in order to put a aam aadmi posture will the FM continue with such programmes and allot huge amounts to them? Can an individual expect some tax respite in the coming budget?

B B Bhattacharya: Thanks to the tax revenue collection. The government is almost on target in fulfilling FRBM target. By next Budget I expect the gross fiscal deficit to be around 3 per cent of GDP, which was the target under FRBM act. However, the zero revenue deficit target is unlikely to be fulfilled especially if government gives tax concession and also enhance expenditure under rural development act.

Kapil Kulshrestha: Sir, what you think about the way in which government is investing in rural areas and the initiatives being taken by government for welfare of rural mass and the people associated with it. What are the core issues government should take care of in coming budget?

B B Bhattacharya: This being the last general Budget before the election, i am expecting the government to hike rural development expenditure and also some schemes for the rural and informal sector such as subsidies crop insurance and medical insurance. The government is also likely to widen the coverage of national rural employment guarantee scheme from currently 300 districts to all of 600 districts in the country.