IN THE wake of escalating inflation, scandals, tight liquidity and rising current account deficit, Finance Minister Pranab Mukherjee is presenting the sixth union budget 2011.
With challenges galore, Mukherjee’s need of the hour is to satisfy the common man as well as to put the economy back higher growth track.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) hopes that its recommendations for the union budget 2011 will be considered by the Centre.
Making a note of the recommendations made by ASSOCHAM, it said that the progress on the Direct Tax Code and Goods and Service Tax (GST) were constantly being delayed with no further news on the implementation of either of the two.
The body also said that it believes rational GST is quite essential to simplify indirect tax structure and make India a common market. Apart from this, the body also expects the Centre to play a pivotal role in the continuation of tax reforms.
ASSOCHAM also emphasised that amendments in the provisions of Income Tax Act are necessary, specially in the case of international transactions and taxation of non residents should be comparable to international practices to facilitate introduction of direct tax code.
Some of the proposals made by the Finance Minister in Union Budget 2011 include:
> Talking about food inflation, Pranab Mukherjee said that although it has been reduced to 9.3 per cent in January from 20.2, it still does raise eye brows. He also mentioned about the spurt in prices in cereals, onions and milk.
> Reconciliation of ecological concerns with development aspirations.
> In current year, overall economic growth is expected at 8.6%, agriculture growth at 5.4%, industrial growth at 8.1%, and services growth at 9.3 per cent.
> Public Debt Management Agency Bill to be introduced in the next financial year.
> The Parliament is likely to pass the Direct Tax Code Bill in the next financial year whereas, Goods and Services Tax Code Bill will be introduced in the Parliament this year.
> Micro finance equity with SIDBI will be formed at Rs. 100 crore.
> A proposal will be made to increase rural housing fund to Rs. 3,000 crore.
> From the priority sector lending, a proposal will be made to increase housing loan limit from the present Rs. 20 lakh to Rs. 25 lakhs.
> The Government also intends to create a Women’s Self Help Group Development Fund with a corpus of Rs500 crore.
> For infrastructural development, tax free bonds of worth Rs. 30,000 crore will be issued which will cover a wide spectrum under the Warehousing Corporation of India, National Highways Authority of India, IRFC, and Housing and Urban Development Corporation.