Since last few days, I devoted my time a bit in analyzing the union budget 2010-11 and I came across some interesting facts, during my random and time killing analysis. Some point that struck me during my analysis are:-
(1) Fiscal deficit pegged at 5.5% for 2010-11.
(2) Elevation of the tax slab.
(3) Complete fiasco of indirect-tax.
(4) Immature approach for the infra-development.
(5) Removal of the stimulus, and planned recovery of the stimulus.
Considering the aspect of reduced fiscal deficit, finally improvement in that portion, the Indian economy would be at less debts than the previous years. An improvement of the economy can be considered through such plans. The fruitful utilization of the GDP can be expected this year.
Through tax slabs elevation, the common Indian salaried class citizens are expected to save around Rs. 600 billions in gross. A sign of relief is evident in there TDS. Yet much improvement was expected by the common Indian.
Now taking the Indian Infrastructure into the scenario, the FM wasn't bold enough to take the privatization approach. The FM should have privatized the infra development projects, and rather concentrated such capital into the other sectors such as import and exports, healthcare, aviation, power and telecom. Proper dilution and optimized distribution of the funding should have been done to infrastructure and the other sectors. Such distribution of funds guarantees better returns and improve over all development. Apart from that it has now become the requirement of the common public.
In the issue of the indirect taxes, the Govt. should have shown more matured approach by removing all the major indirect taxes and then levying inform of a common VAT. All the other strings from the corporate sector should be removed and much simpler and a non-complicated VAT should be centralized. The more number of excise free zones should be developed and supported at the economically critical regions.
The Govt. has made a bold and correct decision by declaring timely and gradual removal of the stimulus given to the Indian economy. This wise step should be appreciated taking present market scenario into consideration. It is good to know that the FM realized soon enough and did not follow the path of Dubai, Portugal or Greece.
In a nutshell the Common Man's budget, according to me, seems to be a desperate capitalistic approach, with some democratic fears. I would always say that the budget 2010-11 was an optimistic along with some pinch of expected inflation.