The Union Budget 2015-16 has attracted caustic remarks from experts who have in unison lambasted increase in service tax and hasty introduction of goods and services tax (GST). These two announcements have in one go undone whatever good intended to be done in the Budget, they said.
Speaking in a Budget discussion organised at Ahmedabad Management Association (AMA) premises here on Sunday, former BJP minUnion Budget 2015, GST, Goods and services tax, Ahmedabad Management Association, BJP, Jay Narayan Vyas, Economist, Ahmedabad newsister and economist Jay Narayan Vyas said that increase in service tax to 14 per cent would leave an embracing adverse impact on all sections of the society because prices of all commodities and goods would become costly.
He also said there was no need to introduce GST a year in advance when it was to be levied a year later anyway. Vyas, a senior BJP leader, no doubt made a valiant effort to defend the Budget provisions but the shortcomings in it over-weighed them.
He said that one good thing about the Budget was that it gave due consideration to working capital requirements of small and medium enterprises (SMEs). All things would be excellent but lack of working capital could kill a small industrial unit, he said.
He observed that port-based development would be a good thing happening in favour of Gujarat which had the longest coastline of 1,600 km in the country. But, he warned, instead of being obsessed with increase in gross domestic product (GDP) minus employment generation for youth was fraught with danger. “A jobless growth sans employable youths would prove to be a demographic disaster in place of a demographic dividend,” he said of the growing number of unemployable youth coming out of academic institutions.
In this context, he said it was pointless to have high number of institutions like IIMs and IITs in a dull job market.
On land policy, he said it was going to leave little land for small farmers and land would be fragmented and small farmers would have no avenues of using hi-tech agriculture processes. Vyas said it was expected that gold import duty would be slashed from 10 per cent to five per cent but this did not happen, which would spur gold smuggling.
Eminent tax expert Mukesh Patel spoke on aspects of direct taxation, laying threadbare the deceptively simplistic provision of tax calculation of exemptions where the Budget passes them on a tax benefits, which in effect left little in the hands of salaried class..