McClatchy-Tribune Information Services via COMTEX) --The Indian budget is aimed at reviving growth, targeting to fund it with higher revenues such as taxes on the rich and large companies.
The Institute of Chartered Accountants of India, or ICAI, organised two seminars on the Union Budget entitled "Analysis of Indian Union Budget" in Dubai and Abu Dhabi. The analysis was delivered by T.N. Manoharan, a past president of the Icai. M.K. Lokesh, Ambassador of India in the UAE, was the guest of honour.
In his analysis, Manoharan felt that Finance Minister P. Chidambaram has done "a balancing act between prudence and populism in framing his proposals".
The mission to propel the economy towards an eight per cent growth has been rightly identified as a challenge and many of the proposals announced seemed to be aiming stimulate growth on the industrial front, he said.
"Establishing two industrial corridors and two new ports would do a lot good for gaining momentum in this direction," Manoharan said.
He welcomed greater allocations to the health, education and infrastructure sectors.
Non-residents investing in long-term infrastructure bonds would be liable for tax only at a five per cent rate and this concession is now extended even to investments made through designated rupee accounts, he said.
Similarly, baggage allowance has been enhanced from Rs25,000 to Rs50,000 for male passengers and Rs100,000 for women passengers to facilitate carrying in more gold on arrival in India.
"But the retrograde step is enhancing the tax rate on money remitted by India in the nature of royalty and fees for infrastructure is enhanced from 10 per cent to 25 per cent subject to DTAA rate. This would hamper the transactions and flow of know-how and technology into India from foreign companies," Manoharan said.
On the same occasion, James Mathew, chairman of the Icai Dubai Chapter, said "the finance minister unveiled a unique budget although the stock market did not respond to it positively. This was a budget with no retrospective amendments".
The budget aimed at reviving growth, targeting to fund it with higher revenues such as taxes on the rich and large companies, he added.