March 01, 2005
 

Chidambaram reveals a play-it-safe budget

Finance Minister P Chidambaram revealed his budget in Parliament yesterday. One of the main implications of the budget is that the tax slabs have been made simpler and more rational, resulting in tax-payers forking out less in the form of income taxes. Of course, this shortfall will be handled through other taxes, direct and indirect.


S Gurumurthy from the Swadeshi Jaagaran Manch argues that the budget hides more than it reveals. My guess is that he is still in hiding from the Tamil Nadu police and so managed to find time to dissect the budget. In any case, since it is very likely that he will be arrested on a Friday, he will have a lot more time to think about what Chidambaram came up with.

Sameer Wagle feels that this budget reflects a changed Chidambaram, in much the same way as Tendulkar's batting has become less risky and more calculated. Ganesh is thrilled about the income tax implications.

My gut feeling about the transaction tax of 0.1% on cash withdrawals in excess of Rs. 10,000 is that it is one of those features in the budget which is rollback or dilution friendly. I feel that Chidambaram will either decrease the tax rate to 0.05% or increase the minimum limit to anything between Rs. 25,000 and Rs. 50,000, very likely the latter.

Rambled @ 6:19 PM

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