Cabinet may consider Budget on Feb 1 this week

Cabinet may consider Budget on Feb 1 this week

New Delhi: The Cabinet is likely to consider this week fixing February 1 as date of presentation of the budget after the Election Commission gave its nod in light of upcoming Assembly elections in five states.
Having decided to advance the budget presentation by a month, the government took the line that it should not be presented in the middle of Assembly poll in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur.
So, it consulted the Election Commission, which has concurred with the finance ministry’s view that it is an annual financial statement and can come anytime of the government’s choice, officials said.

The Cabinet headed by Prime Minister Narendra Modi is likely to meet on Wednesday or Thursday to decide on the date for Finance Minister Arun Jaitley to present the budget for 2017-18.

The Cabinet on September 21 had in-principle decided to end the colonial-era tradition of presenting the Union budget on last day of February and advance it by about a month to help complete the legislative approval for annual spending plans and tax proposals before beginning of the new financial year on April 1.
“The reason we wanted to advance the date was that we want the entire budgetary exercise to be over and the Finance Bill to be passed and implemented from April 1 onwards rather than June because then the monsoon sets in and effectively, the expenditures start in October,” Jaitley had stated last week.

Stating that the government wants expenditure to start in April itself, he had said there are five state Assembly elections lined up in 2017.

“So, we are just trying to co-ordinate that you do not have to announce the Budget bang in the middle of an election date. It should be reasonably before that or after that,” he had said.

The finance ministry had been proposing that the Budget presentation be fixed for February 1 and the entire exercise be completed by March 24.

It wanted the Budget Session of Parliament to begin before January 25 and go in for a three-week break between February 10-15 before reconvening between March 10-15 to complete the legislative exercise.

PTI

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Despite 7th Pay Commission implementation, no worries on fiscal deficit: Jaitley

Despite 7th Pay Commission implementation, no worries on fiscal deficit: Jaitley

New Delhi: Finance Minister Arun Jaitley today said he was not worried about fiscal deficit and government would be able to meet its target despite additional outgo towards the implementation of the Seventh Pay Commission.

He admitted however that the impact of implementing the pay commission’s recommendations, which will result in an additional annual burden of Rs 1.02 lakh crore on exchequer, would last for two to three years.

“I am not particularly worried about the fiscal deficit target,” he said while replying to questions on the impact of the recommendations on public finances at the HT Leadership summit.

He further said that besides achieving the target, the government has also been able to improve the quality of fiscal deficit. The government proposes to bring down the fiscal deficit to 3.9 per cent of GDP in 2015-16, 3.5 per cent in 2016-17 and 3 per cent by 2017-18.

“If you achieve a fiscal deficit by either cutting down expenditure or withholding tax returns, then you may strictly have statistical figure, but the quality of the fiscal deficit will always be suspected…we have concentrated on the quality of the fiscal deficit and we will probably be able to maintain it,” he added.

As regards the impact of the Pay Commission award to central government employees, Jaitley said the normal rule is that the expenditure on salary and pension should be 2.5 per cent of the Gross Domestic Product.

The ratio will deteriorate in the initial years with the implementation, he said.

However, “…as the base of the GDP increases, by the third or the fourth year, the spikes come down and (thereafter) you reasonably reach that 2.5 per cent figure back… These pressures will be for the next 2-3 years,” the minister added.

PTI

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7th Pay Commission recommendations likely this year

7th Pay Commission recommendations likely this year : Jaitley

Friday, April 24, 2015, New Delhi: The recommendations of the 7th Pay Commission on pay revision of the central government employees is expected to be submitted to the government this year, the Lok Sabha was today informed.

Responding to a supplementary, Finance Minister Arun Jaitley said, ”Additional Tencent revenue share for the state being provided by the Centre from this year and the recommendations of the pay commission- that are expected to be made this year-are bound to put additional burden on the fiscal situation.”

“Keeping this in mind, we have opted to extend the deadline from two to three years for attaining the targeted mark of fiscal budgetary deficit,” he said.

Presently, the government’s annual income is around Rs 11.5 lakh crore against the expenditure of around Rs 17.5 lakh crore leaving a budgetary deficit of about Rs 5 lakh crore.

Till date central government has notified six pay commissions before notifying seventh in February 2014. First central pay commission was notified in 1946, Second CPC in 1957, Third CPC in 1970, Fourth CPC in 1983, Fifth in 1994 and sixth in 2006.

Report of sixth pay commission was implemented w.e.f. 01.01.2006.

The UPA government formed the Seventh Pay Commission on 28 February 2014 under chairman justice Ashok Kumar Mathur with a timeline of 18 months to make its recommendations. According to present position, the commission will take at least 20-24 months.

However, the Sixth Pay Commission had submitted its report within 18 months.

As a result of the recommendations of the Sixth Pay Commission, pay and allowances of the central government employees more than doubled as per Fourteenth Finance Commission estimates.

As such,the central government employees are expected to get 100 percent salary hike under the recommendations of the Seventh Pay Commission. Issues like inflation, the governments financial

position and salary structure of government employees in other countries would also be considered as parts of pay panel recommendations.

The Fourteenth Finance Commission asked the pay panel to link the pay with productivity, which will be the biggest hurdle for central government employees to be got over to get salary hike.

It is interesting to note that the earlier governments never accepted to link the pay with productivity.

Source: [http://www.govemployees.in/7th-pay-commission-recommendations-likely-this-year-fm/]

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Income Tax Expectations – Assocham Survey: Here’s What India Wants

Income Tax Expectations: Here’s What India Wants

A survey carried out by industry body Assocham has found that a majority of salaried employees want Finance Minister Arun Jaitley to increase the income tax exemption in the forthcoming Budget.

A hike in income tax exemption from Rs. 2.5 lakh to Rs. 3 lakh will lead to savings of up to Rs. 5,000 for those who fall in the Rs. 2.5 lakh to Rs. 5 lakh tax bracket. Those in the Rs. 5 lakh to Rs. 10 lakh tax bracket will save up to Rs. 10,000, while those in the highest tax bracket can save up to Rs. 15,000.

Any increase in exemption in income tax would leave more money in the hands of people and will increase their purchasing power, Assocham said.

If Mr Jaitley hikes income tax exemption limit, it will be for the second time in two years that salaried employees will get a relief on taxes.

The other big expectation is about exemption on housing loans. 78 per cent of those surveyed want interest exemption on home loans to go up to Rs. 5 lakh from Rs. 2 lakh.

Property prices in the country have gone up sharply over the years and many individuals have to pay large amounts as interest for home loans. Exemption on interest on home loan was hiked by Rs. 50,000 to Rs. 2 lakh in the previous Budget.

A large number of respondents in the survey also voted for hiking exemption limit under section 80C of the Income Tax Act; the section makes investments worth Rs. 1.5 lakh on saving instruments such as fixed deposits, national saving certificates and public provident funds exempt from taxes.

“Hike in exemption limits will boost the savings rate in the Indian economy to 35 per cent of GDP from below 30 per cent currently,” said Assocham secretary general D S Rawat.

88 per cent of respondents want the government to reduce the record-high duty on gold import. Import duty on gold was hiked to 10 per cent in 2013 when the economy was struggling with a high current account deficit and volatile rupee.

Nearly 82 per cent of the salaried class expects a separate deduction of Rs. 50,000 for the payment towards annuity or pension plans. Deduction of the amount paid towards annuity plans u/s 80CCC and NPS u/s 80CCD come under the threshold limit of section 80C currently.

Around 55 per cent of the survey respondents were between 25 and 29 year-old; 26 per cent fell between 30 and 39 years; 16 per cent were between 40 and 49 years. The survey was carried out among employees from 18 broad sectors, with maximum share contributed by employees from IT/ITes sector (17 per cent). It was conducted across Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun, etc. About 500 salaried employees from the different sectors were covered by the survey from each city on an average.

Read at NDTV

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