Tax cuts not to have major impact on revenue: Jaswant

Emphasising the fact that these measures had nothing to do with the impending elections, Singh said that “these steps have not been taken in a fit of amnesia. Budgetory process ko koi chot nahin aayi hai (Budgetory process has not been hurt). Revenue outlook is very positive.” According to him, any delay in these economic initiatives would have delayed the prospects of economic growth.

In a series of measures, which can be termed as a ‘mini Budget’, the government brought down the peak customs duty rate on non-agricultural goods, abolished the four per cent special additional customs duty and made cell phones, computers, laptops, life-saving drugs and Air travel cheaper.

As part of overall duty structure changes, customs duty on project imports with investment of at least Rs 5 crore in plant and machinery has been brought down by 15 per cent from 25 per cent and on nickel and other articles by five per cent. Air travel would become cheaper with the excise duty on ATF slashed by half from 18 per cent and the 15 per cent inland air travel tax abolished along with the foreign travel tax of Rs 500 per passenger.

As part of simplifying procedures under direct taxes, the government exempted salaried class with up to Rs 1.5 lakh income from filing tax returns along with pensioners, who would be exempt from the purview of the one-by-six scheme. Government also extended electronic filing of service tax returns to all 58 taxable services from the present 10 services. While the changes in indirect tax would be effective from Friday itself, those regarding direct taxes would apply from April 1.

According to Singh, without any doubt, a much better growth was expected in the third quarter. These measures would further enhance growth. Singh stated that the economic scenario is such that financial initiatives cannot be restricted to an annual budget.

“Budget process should not be viewed in form of a mela, to be held for one day and after that ‘ham khatiya biccha ke soin jaiyen, (we spread the cot and go to sleep)”, he added.

Singh recalled that in the last Budget the government had given a commitment for further cut in customs duties. These steps were in line with that promise and were aimed at increasing both investment and production, he added.

According to chief economic advisor to the finance minister, Ashok Lahiri, “it is an enhancing package. Growth momentum is strong and what the finance ministry is trying to do is giving it a boost.” As the finance minister and the RBI have said, Budget is not something to be prepared every fifth Sunday, he added.