Budget Speech - PART B
- Mr. Speaker, Sir, while it is our policy to moderate
the tax rates and simplify procedures, the government is
equally committed to curb evasion of taxes. It is reported that in
some sectors, like induction furnace, steel re-rolling mills etc.,
evasion of excise duty is substantial and the production is not
being reported correctly. I propose to tackle this problem by
introducing collection of excise duty on the basis of their production
capacity. Suitable legislative changes in the excise law for enabling
the implementation of the aforesaid change are under
consideration. The details of the proposals would be submitted to this House
in due course.
- The average citizen consumes a basket of commodities.
As a result of my proposals some increases and many
reductions I believe the basket will carry a significantly lower tax burden.
- The services sector contributes nearly 40% to the GDP.
`Services' are products as much as `manufactured goods'.
Both must bear taxes. Hence, I propose to extend the service tax
to cover a number of well known services like:
- Transportation of goods by road;
- Consulting engineers;
- Custom house, Steamer and Clearing and
- Air travel agents, tour operators and car rental agencies;
- Out-door caterers, pandal contractors and
- Man-power recruitment agencies.
- The proposals on service tax are estimated to yield
a revenue of Rs.1200 crore in a full year. However, for the
financial year 1997-98, I am taking credit for Rs.900 crore. I wish
to inform the House that in order to improve our national
highways, I propose to utilise the bulk of the proceeds realised from
service tax on transportation of goods by road to augment the
resources of the National Highway Authority.
- On the conventional basis, my proposals relating
to reduction in customs duties are estimated to result in a loss
of Rs.2625 crore in a financial year and, in the case of excise
duties, my proposals are broadly revenue neutral. However, the
buoyancy and the growth momentum that would be imparted to the
economy would more than compensate for our losses computed
through the conventional calculations.
- I now have to say something on behalf of my
colleague the Minister of Communications who has made a statement
earlier today. A revision of tariffs for some postal services has
become unavoidable. However, in doing so, we have kept in view the
interest of the common man and the role of postal services in
meeting wider social obligations. While there is no change for
Registered Newspapers, the price for ordinary Post Card is being raised to
25 paise and printed Post Card to Rs.1.50. The price for Inland
Letter is also being raised from 75 paise to Re.1 and for Envelope
from Re.1 to Rs.2. Certain other changes are also being effected
which is explained in the Memorandum circulated alongwith the
budget documents. The changes will take effect from a date to be
notified later. The proposed revisions are estimated to yield an
additional revenue of Rs.367 crore in a full year and Rs.305 crore
during 1997-98. This modest increase is necessary for the
development of postal services and in partially bridging the deficit on
the numerous services being provided by the Postal Department.
- Copies of notifications giving effect to the above
changes in customs and excise duties will be laid on the Table of the
House in due course.
- Mr. Speaker, Sir, as I come to the end of my
labours, let me look at the final outcome. The revenue deficit in 1997-98
is placed at Rs.30,266 crore or 2.1% of GDP. The fiscal deficit
comes to Rs.65,454 crore which is 4.5% of GDP. I have not wavered
in my commitment to continue on the course of fiscal
correction. With the support of this House, and as promised in the CMP,
I hope to bring the fiscal deficit under 4% in the next budget.
- Our goal must be to achieve rapid and
broad-based growth which alone can ensure higher employment, better
living standards and a humane and just society. The challenges
that we face today are not unique to India. Other countries,
including our friends in Asia, have faced similar challenges. Japan
showed the way. Other Asian countries are surging ahead. And,
finally, there is the example of China, powering its way to becoming
the second largest economy in the world. These countries have
shown that with courage, wisdom and pragmatism they can find
their rightful places in the world.
- Deng Xiao Peng, to whom we paid homage a few
days ago, once said, "From our experience of these last few years, it
is entirely possible for economic development to reach a new
stage every few years. Development is the only hard truth."
India's economy has also reached a new stage. Our beloved India is
far stronger today than she was six years ago.
- I would appeal to this House, and
to the Indian people, to heed the call of Gurudev Rabindranath Tagore:
"Desha desha nandita kari mandrita tabha bheri,
Aashilo jata birabrinda aashana tabha gheri.
Deen aagata oyi, Bharat tabu kayi?
Shay ki rahila lupta aaji shaba-jana-paschatay?
Louk bishwakarmabhar mili shabar shathay"
( Thy call has sped over all countries of the world
And men have gathered around thy seat.
The day is come; but where is India?
Does she still remain hidden, lagging behind?
Let her take up her burden and march with all.)
- Mr. Speaker, Sir, with these words, I commend
the Budget to this august House.
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