The Hindu : New Delhi News : Budget a let-down, feel Delhiites

Online edition of India's National Newspaper
Wednesday, Mar 01, 2006

New Delhi

New Delhi

Budget a let-down, feel Delhiites

Staff Reporter

Sore over higher service tax; housewives relieved; drop in car prices welcomed

NEW DELHI: Indian industry and the corporate world might have given a thumbs-up to Union Finance Minister P. Chidambaram's Budget for 2006-07, but people in the Capital were by and large upset and disappointed over the 2 per cent increase in service tax and lack of any bit of good news by way of relief on the Income Tax front. But housewives were a relieved lot as Mr. Chidambaram did not raise fuel prices, particularly those of LPG, and people also welcomed the cut in excise duty on small cars making them cheaper.

"Instead of giving some tax relief to people, the Finance Minister has not only increased the service tax from 10 per cent to 12 per cent but also brought new services under it. Ultimately it is the consumers who have to pay this tax as the service providers pass on the burden entirely to them. Since the service tax was expanded in a big way to a whole new range of services last year, with an additional 2 per cent education cess clubbed into it, it is the middle class that has been bearing the brunt of it," rued Rajesh Aggarwal, a chartered accountant.

Expressing displeasure over no major concession being provided on the issue of fringe benefit tax (FBT), Deepak Kumar, an information technology professional, complained that his Income Tax outgo had seen a steep increase. "At least genuine business expenditures like telephone bills and conveyance allowances should be made tax-free. The Government should have increased the tax bracket from Rs.1 lakh to at least Rs.1.5 lakhs so that professionals like me could have got some relief," he added. Expressing surprise on imposing duty on personal computers and other IT products, he feared that this might have an adverse impact on the booming industry where India has emerged as a global leader.

However, housewife Bimal Mishra is satisfied with the Budget as there is no increase either in LPG prices or in vehicle fuel as it has a cascading effect on prices of all essential commodities. "We were fearing that LPG prices might go up. In the last Budget the LPG price was around Rs.250 per cylinder and now it is over Rs.295. We cannot afford yet another hike. I hope this remains the same for some more time," she said.

Ms. Mishra also thanked Mr. Chidambaram for exempting or decreasing duty on several products including condensed milk, ice cream, meat, fish and poultry preparations and ready-to-eat packaged foods and instant food mixes and leather footwear. She, however, asked the Union Finance Minister to act urgently to bring down prices of household goods including wheat, pulses, edible oil and other items.

Similarly, the medical fraternity has expressed happiness over reduction in prices of life-saving drugs besides that for treatment of cancer and AIDS. "Though increase in health outlay is a welcome step, the Government must sanction more funds to boost healthcare system, particularly in rural areas," said head of Sir Ganga Ram Hospital Dr. S.K. Sama.

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