Cars, SUVs, two-wheelers
prices may come down, Cars, SUVs,
two-wheelers and commercial vehicle prices are expected to come down as finance
minister P Chidambaram cut excise duty in the vote on account
presented in the Lok Sabha on Monday.
The finance minister reduced the excise duty for
small cars from 12% to 8% and for SUVs from 30% top 24%. The auto industry has been
reeling under a slowdown and had sought a relief package from the government. http://goarticles.com/article/Calling-India-Becomes-Easy/8489577/
Along
with the budget, he will present a vote-on-account to seek Parliament's
sanction for spending till July.
By
tradition, the interim budget does not contain proposals seeking to tinker with
direct taxes, nor are there any policy announcements, although there may be
some sops for the common man and sectors that need help.
Earlier,
Chidambaram had indicated he may tweak excise duties and service tax rates in
the interim budget in an apparent bid to boost the economy, but he may not
pursue key reform legislation due to lack of political consensus.
"We
cannot propose amendments to the Income Tax Act, Customs Act or the Excise Act.
But any proposal short of amending a law can be made. We can also outline a
vision for the future," he had said.
It
would be interesting to see if fmcontinues
with the super-rich tax in 2014-15 as well, but indications are he may choose
not to since it would need amendment of the law.
In the
last Budget, the government imposed a 10 per cent surcharge for a year (2013-14
fiscal) on people earning income above Rs 1 crore. It covered 42,800
individuals and entities.
The
minister is expected to use the opportunity to highlight the achievements of
the UPA-II government and focus on how the government has been able to contain
the fiscal deficit and the current account deficit (CAD), notwithstanding the
difficult global situation. .
The
full Budget for 2014-15 will be presented by the new government in June-July.
Chidambaram
may explain why economic growth slowed to a decade's low of 4.5 per cent in
2012-13 and outline steps taken by the government to put India back on a
high-growth trajectory.
Although
the Central Statistics Office (CSO) has estimated a growth rate at 4.9 per cent
in this financial year, Prime Minister Manmohan Singh had said it would exceed
5 per cent once the figures were revised.
Key
reform measures such as the insurance bill, the goods and services tax (GST)
and the direct tax code (DTC) are not likely to be taken up by the outgoing UPA
government for want of political consensus.
In an
election year, governments have traditionally presented an interim budget or
vote-on-account, a shorter version of the budget.
The
government, sources said, will come out with revised estimates for tax
collection in 2013-14 and projections for the next financial year.
As per
current indications, the fiscal deficit this financial year is expected to be
less than 4.8 per cent of GDP estimated in the budget, mainly on account of
expenditure compression and higher realisation from the 2G spectrum auction.
The
fiscal consolidation road map requires the government to contain the fiscal
deficit at 4.2 per cent of GDP in 2014-15.
Chidambaram
had on several occasions said he had drawn a red line for the fiscal deficit
and it would not be breached.
The gap
could be 4.6-4.7 per cent of GDP.
The
CAD, which was a major concern last year, is likely to narrow to below $50
billion, or 2.5 per cent of GDP. It had touched a record high of $88.2 billion,
or 4.8 per cent of GDP, in 2012-13.
leaves taxes unchanged, says
no policy paralysis: Leaving
direct taxes untouched, finance minister on
Monday slashed excise duty on cars, SUVs and two-wheelers, and capital goods
and consumer durables to boost manufacturing and growth. The 1 per cent surcharge on
'super-rich' having income above Rs 1 crore in a year, and the 5 per cent
surcharge on corporates imposed last year, has been allowed to lapse with the
finance minister saying, Presenting the interim Union Budget for
2014-15, he also provided service tax exemption for storage and warehousing of
rice like it was done in case of paddy last year. Also, blood banks have been
exempted from its purview.
"In keeping with the conventions I do not propose to make any announcements
regarding changes to the tax laws."
