Finance Minister while presenting the budget had the most challenging task of striking the balance between the interests of aam aadmi under soring inflationary pressure, and garnering more revenues for sustained, inclusive growth. The IMF has projected a global recovery to 3.1% in 2010, while OECD pegging up a figure to 1.9% for its member countries. These countries are still facing concerns such as fiscal imbalances and unemployment.
Keeping in mind the priority areas highlighted by G20 framework includes stepping up investment in infrastructure through private public partnership, augment capital investment in agriculture, support investment in green energy research and strengtheing exports. Adding to it focusing on education, skill development, health care and social security aspects are other ares.
Improving access to financial services through strengthening the micro finance, realization
of tax structure are other areas which were needed to be addressed.
For realizing the tax straucture Govt has introduced GST which is supposed to be implemented by april1,2010. It is being decided to have 16% rate of GST for both state and centre combined.
It is to be levied on companies and traders with an annual turnover of Rs 10 lakh. This will provide a tax base of 40-45 lakh of assesses and ensure that neither state nor centre will suffer
revenue losses. According to sources, the rates for both the centre and state could be 8% each or states could get a percentage point higher depending upon the discussions with centre.
The Introduction of GST will streamline the movement of goods and services across India with single tax structure replacing the current multiple tax system, which includes central excise, State VAT, service tax- the sum of which runs to high as 30%
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