Government of IndiaMinistry of Finance Budget 97-98



Budget Speech - PART B

Others

  1. Mr. Speaker, Sir, while it is our policy to moderate the tax rates and simplify procedures, the government is equally committed to curb evasion of taxes. It is reported that in some sectors, like induction furnace, steel re-rolling mills etc., evasion of excise duty is substantial and the production is not being reported correctly. I propose to tackle this problem by introducing collection of excise duty on the basis of their production capacity. Suitable legislative changes in the excise law for enabling the implementation of the aforesaid change are under consideration. The details of the proposals would be submitted to this House in due course.

  2. The average citizen consumes a basket of commodities. As a result of my proposals some increases and many reductions I believe the basket will carry a significantly lower tax burden.

  3. The services sector contributes nearly 40% to the GDP. `Services' are products as much as `manufactured goods'. Both must bear taxes. Hence, I propose to extend the service tax to cover a number of well known services like:

  4. The proposals on service tax are estimated to yield a revenue of Rs.1200 crore in a full year. However, for the financial year 1997-98, I am taking credit for Rs.900 crore. I wish to inform the House that in order to improve our national highways, I propose to utilise the bulk of the proceeds realised from service tax on transportation of goods by road to augment the resources of the National Highway Authority.

  5. On the conventional basis, my proposals relating to reduction in customs duties are estimated to result in a loss of Rs.2625 crore in a financial year and, in the case of excise duties, my proposals are broadly revenue neutral. However, the buoyancy and the growth momentum that would be imparted to the economy would more than compensate for our losses computed through the conventional calculations.

  6. I now have to say something on behalf of my colleague the Minister of Communications who has made a statement earlier today. A revision of tariffs for some postal services has become unavoidable. However, in doing so, we have kept in view the interest of the common man and the role of postal services in meeting wider social obligations. While there is no change for Registered Newspapers, the price for ordinary Post Card is being raised to 25 paise and printed Post Card to Rs.1.50. The price for Inland Letter is also being raised from 75 paise to Re.1 and for Envelope from Re.1 to Rs.2. Certain other changes are also being effected which is explained in the Memorandum circulated alongwith the budget documents. The changes will take effect from a date to be notified later. The proposed revisions are estimated to yield an additional revenue of Rs.367 crore in a full year and Rs.305 crore during 1997-98. This modest increase is necessary for the development of postal services and in partially bridging the deficit on the numerous services being provided by the Postal Department.

  7. Copies of notifications giving effect to the above changes in customs and excise duties will be laid on the Table of the House in due course.

  8. Mr. Speaker, Sir, as I come to the end of my labours, let me look at the final outcome. The revenue deficit in 1997-98 is placed at Rs.30,266 crore or 2.1% of GDP. The fiscal deficit comes to Rs.65,454 crore which is 4.5% of GDP. I have not wavered in my commitment to continue on the course of fiscal correction. With the support of this House, and as promised in the CMP, I hope to bring the fiscal deficit under 4% in the next budget.

  9. Our goal must be to achieve rapid and broad-based growth which alone can ensure higher employment, better living standards and a humane and just society. The challenges that we face today are not unique to India. Other countries, including our friends in Asia, have faced similar challenges. Japan showed the way. Other Asian countries are surging ahead. And, finally, there is the example of China, powering its way to becoming the second largest economy in the world. These countries have shown that with courage, wisdom and pragmatism they can find their rightful places in the world.

  10. Deng Xiao Peng, to whom we paid homage a few days ago, once said, "From our experience of these last few years, it is entirely possible for economic development to reach a new stage every few years. Development is the only hard truth." India's economy has also reached a new stage. Our beloved India is far stronger today than she was six years ago.

  11. I would appeal to this House, and to the Indian people, to heed the call of Gurudev Rabindranath Tagore:

    "Desha desha nandita kari mandrita tabha bheri,
    Aashilo jata birabrinda aashana tabha gheri.
    Deen aagata oyi, Bharat tabu kayi?
    Shay ki rahila lupta aaji shaba-jana-paschatay?
    Louk bishwakarmabhar mili shabar shathay"

    ( Thy call has sped over all countries of the world
    And men have gathered around thy seat.
    The day is come; but where is India?
    Does she still remain hidden, lagging behind?
    Let her take up her burden and march with all.)


  12. Mr. Speaker, Sir, with these words, I commend the Budget to this august House.

    Back Home




    This page is prepared and maintained by National Informatics Centre for Ministry of Finance,Government of India.