Direct taxes contribute 55.5% of all tax receipts

Weathering the financial turbulence in 2008-09, the Union Government is trying to give a good fiscal environment that facilitates better tax compliance, reducing fiscal deficit and non-plan expenditure. Stating this in a presentation at the Budget Talk 2010 organised by Business Line and the ICBM here on Thursday, Mr Praneet Sachdeva, IT Commissioner, said the contribution from direct taxes has gone up significantly and contributed 55.5 per cent of all the tax receipts. This indicates a good sign as direct taxes are more equitable. “In the developed countries, direct taxes contribute up to 85 per cent. From Rs 7,000 crore a few years ago, the contribution of direct taxes has gone up to Rs 3.8 lakh crore, overtaking the contribution from indirect taxes (Rs 3 lakh crore),” he said. Demystifying the concept of Budget for business management students, he said the budget was just one part of a bigger dream. “There are many legs that the dream hinges on,” he said. Mr M. Narsimha Rao, President of ITsAP, said that the IT industry needed government support to tap the additional potential the industry could tap in the next 10 years. “The IT industry exports are pegged at $50 billion now. It is expected to grow to $175 billion in the next 10 years. The industry needs Government support in the form of expansion of STPI benefits to tap this additional potential,” he said. While the bigger companies could move to Special Economic Zones (SEZs) to continue to enjoy the tax sops, the smaller companies are at a disadvantage as there are restrictions on the quantum of business and operations they could move to the zones. He said it was wrong to say that IT industry didn't contribute to tax mop-ups. “We (the employees) are the largest spenders. We pay huge taxes as we shop, spend and buy property. This, however, is not tangible to show consolidated figures,” he said. Though the industry was expected to witness low growth rate this financial year, it would grow by 15-20 per cent in 2010-11, brightening employment opportunities. The President of the Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI), Mr K. Harischandra Prasad in his presentation felt that the Budget was positive as it looks three years ahead, is heralding fiscal discipline by lowering fiscal deficit. However, the allocations to education, health, agriculture should have been higher given the gigantic challenges. If the right to education bill is passed the Rs 31,000 crore (Rs 26,000 crore) allocated in the budget would be too meagre, he said. Mr Prem Kumar, President, AP Real Estate Developers Association said the infrastructure sector has got a huge outlay of Rs 1.73 lakh crore in the plan expenditure. A bulk of this would go to the power and road sectors. However, he cited a Goldman Sachs report which said that a total investment of $1.7 trillion or approx. Rs 80 lakh crore was required for the Indian infrastructure sector in the next decade to underline that the allocations were still low to the demands. Given these huge needs, large projects would have to be implemented by the infra companies, especially in the public-private partnership mode. There would be huge job opportunities that would emerge along with challenging tasks, he added. – www.thehindubusinessline.com