'Nothing for NRIs in Indian budget'
India’s 80th budget, perceived to be aimed at the common man has once again failed to excite the Non-Resident Indians (NRIs)living in the UAE.
With absolutely no mention of the word NRI nor any reference to the amendment to the Direct Tax Code, which aims at taxing Indians living in the country for more than 60 days, UAE-based Indians have termed the budget as “pro-poor and development oriented,” but nothing in it for Indians living abroad.
Several Indian businessmen and members of the Indian Business and Professional Council who had gathered last morning to discuss the outcome of India’s budget said adding to their burden would be the hike in service tax on air travel.
Summarising the popular mood was Kiran Sangani, chartered accountant, Sangani And company: Indian Budget 2011-2012 does not have any exiting or extraordinary features. It is a simple budget and has been prepared taking into consideration the inflation in general and food inflation in particular.”
According to him India’s Finance Minister Pranab Mukherjee, in an effort to try and make the common man happy has done everything he could especially by increasing minimum taxable income limit from Rs160,000 to Rs180,000, introducing food subsidies, reducing the interest rate on farmers’ loans and not bringing in any changes to the service tax. “It is a very normal budget,” he added. Indian businessmen, however, were all praise for India’s decision to increase spending on infrastructure by 23 per cent and a raise in the limit for foreign institutional investors in corporate bonds for infrastructure.
The highlight for foreign investors is that India plans to spend more than $1 trillion on infrastructure development during the next five years, and has raised the limit for foreign institutional investors from $5 billion to $25bn. The budget also announced India would open up for foreign investors to invest in equity schemes of domestic mutual funds.
Kamal Vachani, Regional Director, Electronics and Computer Software Export Pormotion Council (ESC) said: “The decision to reduce surcharge on corporate tax to five per cent and allowing foreign institutional investors to invest in mutual funds schemes are welcome steps as it will help generate more funds into India.”
“At a time when the expenses are going up, the decision to increase the limit of Income Tax exemption from Rs160,000 to Rs180,000 and the one per cent interest subsidy on low-cost housing loans are commendable which will ease the burden of the salaried people,” he said and added that health benefits to workers in hazardous industries such as mining are welcoming steps.
Paras Shahdadpuri, President of Indian Business and Professional Council (IBPC) said the government has been trying its best to meet the demands of the common and ordinary citizen of India and it has succeeded in doing the same in this budget as well.
Abbas Ali Mirza, Board member and former IBPC president said, the budget comes at a very critical time for the coalition government in India and certain facets of the budget bear eloquent testimony to that fact. “Some of the priorities of the budgetary exercise, therefore, must have been to boost spending on social programmes, managing the fiscal deficit and controlling inflation. Pruning the budget deficit is quite a daunting task, especially at a time when the economy is showing signs of slowing down. It is a populist budget with an eye on the elections.
According to him the Indian economy grew by 8.6 per cent in 2010-11 and is expected to grow at nine per cent in 2011-12 – which by international standards is an excellent achievement.
“The Finance Minister in his budget speech expressly stated that the current account deficit poses a major concern. The fiscal deficit is kept at 4.6 per cent of GDP for 2011-12; this appears to be a difficult target to meet but according to some economists it is not impossible to achieve and maintain. With expected gross tax receipts of Rs9.32trn and corporate tax receipts of Rs3.6trn, the “tax-GDP ratio” is expected to be 10.4 per cent. This coupled with non-tax revenues of Rs1.25trn, custom revenue of Rs1.52trn, factory gate duties of Rs1.64trn, and many other budgeted inflows, the Finance Minister will be able to keep his promise,” he added.
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