Budget 2010 seemed to bring lots of hope in the minds of people regarding the new schemes and policies which were promised to be introduced. The reports submitted by every ministry had coated many plans towards the growth of the country.
The budget gave ears to the electric vehicle manufacturers where the finished vehicles had to pay only 4% duty, the price of gold was expected to be lesser as the duty on gold ore had been shifted to specific duty. The personal income tax slabs were increased; the prices of mobiles, watches and ready made garments were expected to go down….
But, did all that the FM promised really take place? Or was it a story of Promises made, but, not delivered? The following paragraphs take a view on what “Did not Happen” of all that was promised in Budget 2010.
Goods and service tax
The Goods and Service tax was expected to replace all indirect taxes that are charged on goods and services by the Indian Central and State governments. According to the finance minister the Goods and Service Tax along with Direct Tax Code were to come into force from April 1st 2011.
Current Status: GST which was supposed to begin from the first of April 2011 has been postponed by one year as the government requires more time for taking a stronger decision regarding the matter. According to recent reports India’s proposed new Goods and Service Tax is expected to roll out only in the month of April 2012 due to the continuous disruption in the parliament.
Railway Freight corridor
The railway budget 2010 had included the railway freight corridor project in the country. The Railways planned to create two freight corridors in the country one from Delhi to Mumbai and the other from Delhi to Kolkata.
Current Status: This project has not become successful because the public have been complaining of land acquisition.
Railway Minister had also announced in the budget 2010 that six bottling plants with public private partnership (PPP) is to be set up in order to provide fresh drinking water at cheaper rates to all its passengers. The bottling plants were to be established at Ambala (Haryana), Amethi (Uttar Pradesh), Mal, Nasik (Maharashtra), Farakka (West Bengal) and Trivandrum (Kerala).
New Direct Tax
The New Direct Tax Code was proposed in the budget 2010 in order to change the current system. The plan was to be implemented in the year 2011 which was believed to bring about smoother transition. The plan suggests letting off the general tax payer from paying income tax if his income is Rs 1, 60,000 in a year. The features of the new direct tax included the maintenance of tax exemption at Rs 1.60 lakh income a year, 10% tax on income of Rs 1.6-10 lakh, 20% on income over Rs 10 lakh up to Rs 25 lakh, 30% on income beyond Rs 25 lakh, all direct taxes including FBT and income tax would be brought under one code etc.
Current Status: The New Direct tax is not yet implemented and seems a long way away because it has become very complicated and requires further revisions. Its ironical that the new direct taxes code was envisaged in the first place to make things simple!
New Pension Scheme
The new pension schemes are the scheme introduced by the government of India where individuals can save money during their work life for their financial security for old age when they no longer work. People who join get a Permanent Retirement Account (PRA), which can be accessed online and through points of presence (PoPs). The budget had provided for Rs 100 crores to be given as incentive @ Rs 1000 for every new account opened during the year.
Current Status: The scheme has failed to take off. Published data available till Nov 2010 has shown only 5000 registrations for the scheme. It seems far-fetched that the target of 100000 accounts will be met anytime in the near future.