Post Budget Reactions
Indian Prime Minister
|The objective of the Union Budget
for 1997-98 was to improve the condition of economically
backward people and eliminate poverty through rural and
" The Budget has given a thrust to rural
development, agricultural sector, social sector and
poverty elimination" He said in post-budget
" We have launched five new programs to help the
poor sections of the society and those who have been
neglected for long." he said and mentioned
programmes like Ganga Kalyan Yojana for providing water
in villages and the
Kasturba Gandhi Shiksha Yojana to establish special
schools for girls." Over Ten lakh unemployed youth
will assistance in the new program and we hope to make
this to 50 lakh in the 9th Plan." Mr. Gowda added.
Indian Excise Regulations
budget - extremely good and will have bullish
effect on the stock market.
- Proposal on
indirect taxes - decreases in customs duty from
peak of 50% to 40% in general for import on all
capital goods projects impact on stock market
will be bullish.
- In the
Information Technology Industry the rationalizing
of excise duty rates across the standardized and
of four rates 8%, 13%, 15% and 18% with minor
exceptions has been a boost.
excise duty bands have been lowered i.e. 20% to
18% & 15% to 13%, 10% to 8%. Basically a
reduction in excise duties across the board.
consumers it is positive as excise duties
consumption goods have been reduced.
- In case of
FIIs overall ceilings reduced to 30%. Good for
stock market already increased by 130 points. It
is very bullish - landmark budget.
- To close
with " I wonder the way the Finance Minister
has put the card on the table".
(CEO Usha India.)
- In general
the budget is good.
sector outlay increased by Rs.3000 crores.
- Tax base
increased. Inclusion of service tax has been
- This is a
relief to the companies indirectly who have been
the main tax payers until now.
- Removal of
tax on dividend will help the stock market.
Disclosure Scheme (VDA) - not so sure. If these
are made regular it will encourage people to
evade taxes and come out during such schemes.
They will get away by paying lower taxes. This is
a penalty for paying tax on time.
- MAT not
- Removal of
tax on dividend is good. This tax is payable by
the companies @ 10%.
- A very good
budget more than expected for individuals and
- The MAT has
been removed by directly giving credit of advance
savings requiring companies to main dividends for
inspite of policing not enough control in the
past. A matter of educating the people, honest
people have to suffer. The past cannot be undone.
Thus education is the best policy.
- Demands of
IDBI, SHMI, FICCI etc. have been met. Now they
pass the benefit to the consumers.
Economist, Dean - IILM
exciting, overall some good and some bad points.
ensuring of effective resource allocation and
mobilization. The allocation to poor income
groups, rural sector barely covers inflation
effect, the enhancement in real terms is
negligible. So in this regard not sufficient.
- Direct tax-
Good news from the public point of view as rates
have been lowered. At the same time enhancement
of the bill regarding recognizing person owning
four wheel vehicles, immovable property,
telephone and who had traveled abroad in the
previous year in metropolitan cities as a
tax-payer and puts pressure on the non-tax-payer.
- From the
experience of advanced countries people are
expected to comply more with lower tax rates as
witnessed in the past when reduction inn tax
rates has been followed by higher revenues,
seen in positive light.
sector allocations as such have become quite
routine features-towards primary, secondary
education are on the same lines as in the past.
Cannot be expected to bring about any major
have been allocated without providing any
mechanism to ensure effective distribution &
use for the intended purpose. "If the past
has been any guide, money was not really the
investment scenario- some surge inn the stock
market now, at least for sometime as measures
involving capital market and foreign investment
are definitely positive and for now will get
build to people's expectations, may be with time
it will become passive again.
had more expectations specially with regard to
MAT. However, export profits have been exempted
and five years credit offered- impact from that
point of view is not enough with regard to actual
expectations- mixed reactions in business.
turnaround but not enough.
In the field
of direct taxes, the finance minister has announced a
number of innovative steps to widen the tax base and
to reduce the tax burden on companies as well as on
personal taxation. In the case of companies,
effective tax rate has been reduced from 43% to 15%
and at the same time the provisions of MAT have been
relaxed by exempting the export profits completely
and by introducing the system of credit in respect of
taxes paid under MAT for subsequent five years. The
double taxation of dividend income in the hands of
the company as well as in the hands of the
shareholders has abolished, though tax 10% on the
amount of dividend distributed will be levied in the
hands of the company. The tax on foreign companies
has also been reduced from 55% to 48%. These steps
will give a major boosts to the industry. In personal
taxes, the tax burden of an average taxpayer has been
reduced considerably by lowering the maximum marginal
rate from 40% to 30% on income above Rs.150,000/- and
from 30% to 15% to 20% and 10% in other slabs. The
moderate rates of taxes coupled with complete
exemption of the dividend income will promote
voluntary compliance of tax laws and is also likely
to reduce the tax evasion.
Asstt.Commissioner of Income Tax
1997-98 is extremely good. It is going to usher in an
era of hope and voluntary compliance of tax laws.
Reduction in tax rates both personal as well as
Corporate is going to boost tax collections by
encouraging more and more people towards voluntary
compliance when tax evasion may become a thing of the
past. Increase in standard deduction to Rs.20,000/-
will give greater relief to the salaried class who
were hit hard by inflation. Reduction in rates for
companies, abolition of surcharge on companies,
abolition of provision relating to MAT will boosts
industrial progress and generate more employment.
Abolition of tax on dividends will attract more
investments in companies thereby improving investment
climate. It will also help in revival of
primary/secondary capital market making availability
of large need capital available for the industries.
Introduction of Voluntary Disclosure Scheme is also
going to set in chain action towards healthier
economy by making much needed funds available for
investments in commerce and industry and
|The concessions given to the
industry were over due. His concern was more on
infrastructure activity in the country. Infrastructure
cannot boost the economy by tax concessions but by long
term policy and giving boost to the financial sector
which has not been covered by this Budget. He stated that
about energy sector nothing has been said in the Budget.
Petroleum prices have not been touched.
The tax regime is to be
reformed and the administration has to be strengthened to
bring it to the international level and not only by the
tax rates. He said that Mr.Manmohan Singh initiated the
process of reforms which were overdue but implementation
agricultural sector, no concessions or incentives have
been announced. There is no mention of irrigation
facilities and bringing more land under cultivation for
which no allocation has been made in the budget. The
Economic Survey of India envisaged inflation of 54.5% in
cereals and about 17.5% in the oil sector. The inflation
will increase with the proposals in the Budget.
His view was
that more money should have been allocated for the
modernisation of Defence. Provision of Rs.3300 crores has
been made in this Budget to implement the recommendations
of the Pay Commission. The Government has yet to decide
in which form it is to be given to the employees; whether
in cash or in bonds or partly in cash and partly in
of the Madras Stock Exchange
|Union Budget 1997-98 for meeting
the expectations of the Capital Market and expressed the
hope that the markets would perk up in the near future
" The impact of the budget will be quite good on the
bourses. He has granted all the demands of the
|This years Union Budget was not
growth oriented and would cause inflation. Headed that it
would impose burdens on the common man in the fields of
services railways and postal services.He said there was
no proposal in the budget to encourage capital
investments in the agriculture sector. The Government
promise of granting autonomy to RBI is only half-hearted.
While no steps were taken to encourage SSI's.
|The budget as pro-poor and growth
oriented but expressed apprehension that the lowering of
import duties might have an adverse effect on Indian
Mr. Chatterjee said though the tax burden on the common
man lowered, " It would be crucial to see how the
centre widens its tax net or else there
might be some difficulty in meeting the revenue receipts.
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