Wooing the middle class ahead of elections, Finance Minister P Chidambaram today slashed excise duty on cars and two-wheelers, capital goods and a variety of consumer items like TV and refrigerators to boost demand and manufacturing while accepting the long-standing demand of 'one-rank-one-pension' for ex-servicemen.
Presenting the Budget in the Lok Sabha, Finance Minister P Chidambaram did not propose changes in the tax laws except to continue the 10 per cent income tax surcharge on 'super- rich' individuals and up to 5 per cent on corporates.
"In keeping with the conventions, I do not propose to make any announcements regarding changes to tax laws," he said in UPA-II's last budget that sought to provide sops in indirect taxes including reliefs in service tax to storage and warehousing of rice and blood banks.
The revenue sacrifice on account of indirect tax concessions would be Rs 300 to Rs 400 crore in the 40 days remaining in the current fiscal and Rs 700 to Rs 800 crore by May. But a 5 per cent pick up in the sales of products in these sectors would make up for the loss of revenue, he said in his post-Budget press briefing.
He also did not agree that today's concessions amount to a stimulus package saying the two are not comparable.
On continuance of the tax on 'super-rich' and corporates, he said he has left it to the new government to review the impost that was slapped in the last budget.
The indirect tax concessions will be valid up to June 30 and can be reviewed by the new Government.
In a major relief to ex-servicemen who have been demanding one-rank-one-pension for long, the Minister announced that the government has accepted it in principle for which an allocation of Rs 500 crore has been made. The scheme is expected to benefit around three million defence pensioners.
