Budget customs, excise targets too rosy, say experts

There seems to be basic fallacy in the budget proposal presented by the finance minister, P Chidambaram in his recent budget - he has assumed that customs will grow by 9 per cent while excise will grow by another 15 per cent.

"This translates into the fact that economy will grow between nine per cent and 15 per cent while the FM has assumed that corporate taxes will grow by 40 per cent. If the economy grows by at most 15 per cent, corporate taxes are not likely to grow by 40 per cent," financial analyst and former Nicco Corporation director Abhijit Sen said at a symposium on the central budget proposals for 2004-05 organised by the Bharat Chamber of Commerce in Kolkata on Monday.

He cautioned the statistics presented by the FM suggested fiscal deficit at more than five per cent.

"The Budget was more of a old wine in new bottle with unrealistic assumptions of growth of the Indian economy. The fiscal deficit is also likely to have its effect on inflation," he added.

Tax expert Dilip Desai who also spoke at the symposium said a draconian provision inserted in the budget has been largely overlooked. This involves allowing the tax authorities to charge or take possession of a property sold by an individual or a firm with outstanding excise or other tax dues.

"It was not always possible for an individual or a firm buying a property to make a background check of excise payment behaviour of another party," he added.

Commenting on the provision (of Annual Information Return, tax expert, Nirmal Desai said the tax authorities were not equipped to handle such volumes of data, and that the lower limit of such transactions should be made at least Rs 5 lakh.

Chairman of the Indo-German Chamber of Commerce and eminent accountant, P M Narielvala, said the budget proposals was more of promises than concrete steps.

"It was more of an action taken report and restatement of the common minimum programme," he said.