Union Budget 2009-10, Major Indirect Tax Reforms in Textile sector.

Hello everyone. Hereby I deliver my readers an analysis of the proposed changes related to the Textile Sector. Pranabda's Budget has proposed to increase the Planned Allocation to Rs. 4500crore from Rs. 4090crore last Fiscal. Rs. 3140crores has been allocated to TUFS(Technology Up-gradation Funding Scheme), its a scheme that aims to spur modernization and more investment in this sector. Firstly lets know about the proposed changes in the INDIRECT TAXATION related to Textile products. If we deeply introspect, we shall find that no big changes have been made here. The DUTY STRUCTURE as per my research:

1). Excise duty on NAPHTHA reduced to 14%. A good move indeed. Electricity producers were demanding this since a long time.

2). Excise duty on some Textile chemicals namely Man-made fibres is as below:
-Polyester's E.D. again brought to 8% from 4% last Fiscal.
-Latex rubber thread's E.D. increased to 8%. It is widely used in Garment Industry. Thus, the price of related Garments is soon to hike.
-CENVAT credit has been given as a benifit and on a counter move, E.D. on Cooton yarn expanded to 4% from 0%.

3). Excise Duty REDUCED ON following:
-LCD(Liquid Crystal Display) plates.
-Mobile items.
-Luxury cars.
-LPG(Liquefied Petroleum Gases).

4). Custom Duty REDUCED ON:
-On 9 specified drugs, Custom duty is reduced. This will make these commodities dearer by 10-15%.
-On branded Jewelry.

5). Custom Duty increased on Gold, to make Gold, Golden!

6). Service Tax regime not to be levied on Manufacturing
This is an analysis of Major Indirect Tax analysis, if you have any views to share or additions to this data, you are welcomed with utmost gratitude. Enjoy the Analysis.

"Union Budget 2009-2010" Analysis: Major Drawbacks,

Firstly, a warm hello to all. Here is my Analysis of the Union Budget. Talking by a Macro Level perspective, our Economy is currently facing a 6.8% FISCAL DEFICIT that need to be covered quickly.
As expected by the Economic Survey 2008-09, Mr. Pranab Mukherjee was expected to raise atleast Rs. 25000crores through Disinvestment. But certainly only Rs. 11.2Million has been proposed to be borrowed from the Mammoth Private players. This depicts a strong attack on "short-term" goals rather than "long-term" vision. Thus, here comes the need to raise debt from the Financial Market.
The BIGGEST DISAPPOINTMENT Pranab babu's Budget has created is Lack of any clear-cut reforms on FDI limits, Financial Sector Reforms, Opening of the Coal Sector to Private players and the most crucial one, Disinvestment of PSUs(Public Sector Units). Still as the Budget Speech clearly stated, "a Single Budget cannot solve all our problems, nor is the Union Budget the only instrument to do so." Thus, as Pranabda told that Disinvestment Policy shall be finalized in the Winter Session of Parliament, we hope to see Disinvestment soon.
Another step that seems good but has no strong effect is the removal of CTT(Commodities Transaction Tax). It was announced in the Budget of 2008-09 by the then Finance Minister P Chidambaram. Its rate was 0.017%(Rs. 17 on Rs. 1Lakh's transaction). Though the entire Commodity Industry expresses its happiness on its removal, I personally feel that it doesn't make any "Revolutionary" move(as was expected). I feel so because this tax wasn't yet implemented also, thus it provides a relief from a "never faced difficulty"! Still I'll discuss other aspects too.

Analysis to be posted on 9th,

Hello blogeders(blog+readers). I would like to apologize to all about the fact that the Promised Analysis of Budget will be put tomorrow i.e. on 9th July. I promise to give an analysis that would be easily perceptible even by someone who's not aware of the Economic Lingo. Today, I had been constantly busy in collecting necessary information regarding the Union Budget through external sources as well as by attending seminars. I promise to deliver you, a Layman's Budget Analysis(L.B.A.) tomorrow by night 8.30pm. The analysis job is still going on. Thanking you for your co-operation. Blogger Bhagirath(B2).

The Union Budget 2009-2010.

Dearest viewers of the blog. I am very happy to tell you that this post is solely for your views. I am hereby urging all of my readers to have their say. Our Hon' Finance Minister Mr. Pranab Mukherjee will be walking in the Parliament with the heavy burden of India's future, on his shoulders.
I would like you people to come forward and say what you expect from the Union Budget 2009-2010. It will affect you, me and the entire social fabric at large. So, here's a way of saying what you expect from the Union Budget. I'll be putting forward my ANALYSIS of the UNION BUDGET on 8th July. But before that I feel, that as the nation's future, we youngistanis need to come forward and say what we feel correct.
Everyone is whole-heartedly welcomed. Be it an Economist, or a student like me, anyone who wants to tell what are his/her expectations from the forthcoming Budget. Do visit this blog again on 8th and enjoy an analysis of the Union Budget in a layman's language! Come forward, speak your views.

Bangalore to Japan!

The current global turmoil has led to the fall of overall world GDP and it is estimated that the world GDP will fall even further in 2009 as forcasted by the World Bank. Our Bangalore, the IT hub, under such situation has taken a good precautionary step, by shaking hands with the world's Second largest Economy, Japan, with a GDP of $4.377 trillion for outsourcing ICT(Information and Communication Technology) from India to Japan.
Thus, this avails an opportunity for the Indian IT hub to expand its wings globally. Though the US and EU(European union) account for 80-90% of Revenue source for India, but still Japan has started becoming a productive source for our nation. Not only this, many of the well-established Indian IT giants such as Infosys, Wipro, etc. have already signed and started major projects in Japan. This move of Japan is a step towards cost-cutting and expense management as the global turmoil has hit hard this giant economy.
This is a prosperous prospect for our nation, as Obama's administration may enforce a 50% tax regime over the American outsourcing companies till coming November. Thus, Japan may prove to be a good option for our growth, side by side continuing our IT exports to US and EU, the two largest IT markets in the world. FICCI(Federation of Indian Chamber of Commerce and Industry) has pointed out the fact that Japan has started to fabric ties with India on a large scale in terms of IT.
Japan is well aware about the Indian IT sector's capabilities, its abilities to accomplish projects, maintain secrecy and honest transparency of working. Thus, our Indian IT hub is all set to welcome a new guest in our this, fiercely growing ICT sector.
Do share your views.

Obamination,

Well, Obama's administration has decided to enforce "tax laws" on foreign income of the companies outsourcing from U.S. This move definitely aims at realizing Obama's Bangalore to Buffalo view, he expressed few days ago. In short, its a strategic move to shift the current Outsourcing to various countries including India, towards the American pockets. The implementation of this policy suggests that the cost of firms outsourcing (majorly to India) would increase by 50%.
Till now, the tax-policy of the U.S. Government was such that no tax was being levied no the incomes of the firms outsourcing to other nations in the IT sector, but now taxes will be levied. Here, I would like to say that U.S. accounts for India's 60-65% Exports of IT sector. This tax scheme would increase the cost of U.S. companies, thereby discouraging them to outsource, but on the other hand, would give the IndiaN IT giants like Wipro, Infosys, etc., a price edge over its Global competitors like Microsoft, I.B.M., etc.
This move though encourages the U.S. companies to remain within the boundaries of nation, still, if our sector makes necessary cost-adjustments, it would surely continue its successful growth. Still, the tax-policy hasn't been applied and the talks are going on. Lets hope it doesn't happen and even if it happens, it shouldn't damage our IT sector.
Do express your views.