Budget 1997-98: Full Text
- Mr. Speaker, Sir, while it is our policy to moderate the
tax rates and simplify procedures, the government is
equally committed to curb evasion of taxes. It is
reported that in some sectors, like induction furnace,
steel re-rolling mills etc., evasion of excise duty is
substantial and the production is not being reported
correctly. I propose to tackle this problem by
introducing collection of excise duty on the basis of
their production capacity. Suitable legislative changes
in the excise law for enabling the implementation of the
aforesaid change are under consideration. The details of
the proposals would be submitted to this House in due
- The average citizen consumes a basket of commodities. As
a result of my proposals some increases and many
reductions I believe the basket will carry a
significantly lower tax burden.
- The services sector contributes nearly 40% to the GDP.
`Services' are products as much as `manufactured goods'.
Both must bear taxes. Hence, I propose to extend the
service tax to cover a number of well known services
- Transportation of goods by road;
- Consulting engineers;
- Custom house, Steamer and Clearing and
- Air travel agents, tour operators and car rental
- Out-door caterers, pandal contractors and mandap
- Man-power recruitment agencies.
- The proposals on service tax are estimated to yield a
revenue of Rs.1200 crore in a full year. However, for the
financial year 1997-98, I am taking credit for Rs.900
crore. I wish to inform the House that in order to
improve our national highways, I propose to utilise the
bulk of the proceeds realised from service tax on
transportation of goods by road to augment the resources
of the National Highway Authority.
- On the conventional basis, my proposals relating to
reduction in customs duties are estimated to result in a
loss of Rs.2625 crore in a financial year and, in the
case of excise duties, my proposals are broadly revenue
neutral. However, the buoyancy and the growth momentum
that would be imparted to the economy would more than
compensate for our losses computed through the
- I now have to say something on behalf of my colleague
the Minister of Communications who has made a statement
earlier today. A revision of tariffs for some postal
services has become unavoidable. However, in doing so, we
have kept in view the interest of the common man and the
role of postal services in meeting wider social
obligations. While there is no change for Registered
Newspapers, the price for ordinary Post Card is being
raised to 25 paise and printed Post Card to Rs.1.50. The
price for Inland Letter is also being raised from 75
paise to Re.1 and for Envelope from Re.1 to Rs.2. Certain
other changes are also being effected which is explained
in the Memorandum circulated alongwith the budget
documents. The changes will take effect from a date to be
notified later. The proposed revisions are estimated to
yield an additional revenue of Rs.367 crore in a full
year and Rs.305 crore during 1997-98. This modest
increase is necessary for the development of postal
services and in partially bridging the deficit on the
numerous services being provided by the Postal
- Copies of notifications giving effect to the above
changes in customs and excise duties will be laid on the
Table of the House in due course.
- Mr. Speaker, Sir, as I come to the end of my labours,
let me look at the final outcome. The revenue deficit in
1997-98 is placed at Rs.30,266 crore or 2.1% of GDP. The
fiscal deficit comes to Rs.65,454 crore which is 4.5% of
GDP. I have not wavered in my commitment to continue on
the course of fiscal correction. With the support of this
House, and as promised in the CMP, I hope to bring the
fiscal deficit under 4% in the next budget.
- Our goal must be to achieve rapid and broad-based growth
which alone can ensure higher employment, better living
standards and a humane and just society. The challenges
that we face today are not unique to India. Other
countries, including our friends in Asia, have faced
similar challenges. Japan showed the way. Other Asian
countries are surging ahead. And, finally, there is the
example of China, powering its way to becoming the second
largest economy in the world. These countries have shown
that with courage, wisdom and pragmatism they can find
their rightful places in the world.
- Deng Xiao Peng, to whom we paid homage a few days ago,
once said, "From our experience of these last few
years, it is entirely possible for economic development
to reach a new stage every few years. Development is the
only hard truth." India's economy has also reached a
new stage. Our beloved India is far stronger today than
she was six years ago.
- I would appeal to this House, and to the Indian people,
to heed the call of Gurudev Rabindranath Tagore:
"Desha desha nandita kari mandrita tabha
Aashilo jata birabrinda aashana tabha gheri.
Deen aagata oyi, Bharat tabu kayi?
Shay ki rahila lupta aaji shaba-jana-paschatay?
Louk bishwakarmabhar mili shabar shathay"
( Thy call has sped over all countries of the world
And men have gathered around thy seat.
The day is come; but where is India?
Does she still remain hidden, lagging behind?
Let her take up her burden and march with all.)
- Mr. Speaker, Sir, with these words, I commend the Budget
to this august House.
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