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BW Businessworld

Budget 2012-13: Nothing To Rave About

Photo Credit :

K T Chacko, Director, Indian Institute of Foreign Trade (IIFT)

Budget 2012-13 is along expected lines, as far as the trade and industry are concerned. The Finance Minister has preferred to play it safe, given the constraints of the present political scenario. The increase in Service Tax and Excise Duty from 10 per cent to 12 per cent in both cases is a dampener for almost all industries, except the 17 in the negative list and those exempt from Excise Duties. One wonders whether the government would roll these back if there were sufficient protests from industries. 

But the power, fertilizer, infrastructure, energy and aviation sectors have incentives in some form or the other. Agriculture too has received a fair boost, and rightly so, with a hike in multiple outlays for 2012-13. Warehousing, farm equipment, transport and cold storage chains have also received due importance, which should boost productivity in these areas. Manufacturing has received support in the form of relief through reduction in costs of raw materials and other inputs as well as via weighted deduction of 150% on skill development expenditure as per specific guidelines.

Certain things industries expect from the Government are, however, beyond the purview of the Budget. Quick clearances and prompt decision-making, for instance. These are the only ways to clear bottlenecks that clog business operations in India. 

In a nutshell, Budget 2012-13 is nothing to rave or rant about. 

Prashant Bhalla, Sr VP, Manav Rachna International University

For the Right to Education Act being implemented via the Sarva Shiksha Abhiyan since 1 April 2010, the Finance Minister has provided Rs 25,555 crore, which is a welcome increase of 21.7 per cent over 2011-12. The allocation of Rs 3,124 crore for the Rashtri pera Madhyamik Shiksha Abhiyan is 29 per cent higher than last year and will help boost access to quality secondary education. 

The plan to set up 6,000 new model schools at the block level, with 2500 via Public-Private Partnerships, will help boost education levels in rural areas. Setting up of a Credit Guarantee Fund to ensure better flow of credit to deserving students via education loans from banks is another important initiative that will benefit needy students. 

That the Government has included pre-school and school education, recognized education at higher levels and approved vocational education in the Negative List exempt from Service Tax is a move in the right direction for improving educational standards. It would however have been more appropriate if all educational institutions, public or private, had been included in the Negative List. 

Whether rural or urban, rich or poor, education at all levels should be exempt from Service Tax since it ultimately benefits society and the nation by boosting literacy levels and augmenting the skilled workforce. One hopes the Finance Minister considers this suggestion positively and does the needful at the earliest.