NRIs welcome interim budget proposals

DUBAI - In the election year the Indian finance minister Jaswant Singh has played a 'sugar daddy'to farmers, small scale industrialists, central government employees and working class non-resident indians (NRIs). While the government doled out Rs40 billion sops to farmers, the power sector got a total of Rs150 billion and the transport and highways got more than Rs100 million.

By Staff Reporters

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Published: Fri 6 Feb 2004, 12:03 PM

Last updated: Thu 2 Apr 2015, 11:50 AM

On the welfare side, the government was more than generous in allocating Rs10 billion for health and family welfare and human resource development.

While the finance minister took extra care in pampering the middle class professionals and the the newly rich with no additional income tax and a promise of downward revision the future, the working class non resident indians have been kept happy with raising the duty free baggage allowance from Rs 12,000 to Rs 25,000 and reducing the customs duties from 50 per cent to 40 per cent

With the hope of giving additional impetus to the stock markets, the tax on listed equities acquired on or after March 1, 2003 have been extended for another three years. Although the budget has been termed as a feel good budget for the election year by the opposition and the media in India, speaking to Khaleej Times, a cross section of NRI professionals said that some of the proposals such as self assesment of of customs clearance, rationalisation of import duties and special emphasis on primary education and special programmes from small and medium enterprises have built-in long term growth agenda that will help India Inc to achieve the projected GDP growth of 8.5 per cent by 2007.

Raju Menon - Managing Partner, Morison Menon Chartered Accountants:

The interim budget is dedicated mainly to farmers and the unemployed youth. The budget could be termed conservative as it does not provide any major incentives to the upper class and industrialists. The extension of the long term capital gain exemption on equity shares will attract investments in new equity shares and it will also generate more transaction in the secondary market. The tonnage tax scheme for shipping industry will definitely project the Indian shipping industry internationally competitive.

Abbas Ali Mirza, Chairman, Dubai Chapter of the Institute of Chartered Accountants of India:

The opposition parties have severely criticised the interim budget as an election year gimmick.

However, there are are some concessions in the interim budget that would make it a 'peoples budget'. The welcome proposals include the extension of the long-term capital gains tax break for a further period of three years; the cut in the Central Government stamp duty up to 50 per cent; a reduction of tax burden on shipping companies; increase in free baggage allowances from Rs12,000 to Rs 25,000; extension of IT exemption for power projects to 2012; and- fresh working capital loans to tea growers by banks.

In the Interim Budget the Finance Minister has held out hope for the salaried middle class by saying that income tax deduction and the standard deduction would be revisited.

These are the two (contentious) promises that the opposition is finding fault with. Hopefully, the Finance Minister will honour the promises that have been made in this interim budget.

Kiran H. Sanghani, chartered accountant:

It is a normal interim budget to meet the expenses until final budget comes out. In such budgets we cannot expect any major policy changes on direct or indirect taxes. The interim budget looks is a very calculative move by the government to attract the vote banks. In an election year we can't expect government to make any drastic policy changes. But over all the budget proposals are growth oriented.

K V Shamsudheen, Director, Barjeel Securities:

The Union Government has been ignoring the NRIs who have been contributing to the foreign currency reserves. In the 2004 interim budget the finance minister has made a genuine attempt to make the middle class NRIs happy by increasing the luggage allowance to Rs25,000 and reducing the customs duty from 50 per cent to 40 per cent. While the extension of long-term capital gains exemption for another three year will boost the stock markets and mutual funds business, the budget was silent on a long pending proposal for a contributory pension scheme middle and low income NRIs.

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