Indian Kanoon - Search engine for Indian Law

a) poverty eradication; addressing the ‘life time concerns’ of our citizens, covering health, housing, education and employment;

b) infrastructure development;

*Also placed in library. See No. LT- 7053/2003

c) fiscal consolidation through tax reforms and progressive elimination of budgetary drags, including reform of the additional excise duty, introduction of service tax, and introduction of Value Added Tax (VAT) from April 1, 2003 at the State level.

d) agriculture and related aspects including irrigation; and

I come to taxes, tax reforms, and the budget estimates. I want to emphasise six aspects. First, the coming year will be historic with the States switching over to a Value Added Tax (VAT). The Central Government has been a partner with the States, in the highest tradition of cooperative federalism, in this path-breaking reform. This will also involve an amendment to the Additional Excise Duty. Second, it is proposed to make 2003-04 the year when a long-overdue Constitutional amendment to integrate services into the tax net in a comprehensive manner is enacted and implemented. This will give a boost to revenues, and help implement VAT. Third, there will be major improvements in tax administration through greater application of IT, and a discretion-free, impersonal system. Fourth, excise duties are being rationalised further. Fifth, the momentum of reducing customs duty is being maintained so as to improve the competitiveness of Indian industry in international markets. And finally, Government shall continue to strive towards fiscal consolidation through expenditure reprioritisation, and revenue augmentation.

Mr. Speaker, Sir, these are only a few steps on this long road called simplification and rationalisation of taxation. It is not for nothing that even Albert Einstein had ruefully observed that he found ‘Income Tax the most difficult thing upon Earth to understand’.

Mr. Speaker, please sympathize with me because I endeavour to make easy that which Einstein found so difficult.

Indirect taxes: excise Rationalisation and relief Rationalisation of excise duty structure and reduction of the multiplicity of rates are integral to the total tax reform process. In this regard, I propose a 3-tier excise duty structure of 8 per cent, 16 per cent and 24 per cent. These rates would, however, not apply in the case of petroleum and tobacco products, pan masala, and items attracting specific duty rates. I have already announced a separate package for textiles, and some changes in the duty structure relevant for some other key sectors while dealing with those sectors. I will now refer to the changes proposed in various other commodities.

This budget is about addressing the problem of poverty and life-time concerns of our citizens; of giving a major boost to infrastructure; and laying the foundations for balanced, accelerated growth of agriculture and industry, plus tax reform. I have tried to address the ‘Panch Priorities’, and after this it is my hope that in this year of drought, our economy will respond favourably to the Budget package and demonstrate impressive growth in 2003-04.

Let me end, Mr. Speaker, by reiterating that this Budget is of an "India that is on the move." An India, that now rapidly advances to prosperity. ...........(Interruptions)