What will Fiscal Reform portend for India next year? Well, the GST would be the primary weapon of choice for Pranab da and MSA but they may not make it again..GST roll out would require more agreement from states and the buffers of Rs 30000 Crores made available for it being rejected by the states because of no wish to get into GST , 'is a canard from motivated sources'. GST may be still round the corner, given the cooped federated model that we have, not the disturbed Russian state model that collapsed. The budget will also remember Jyoti Basu of course. At the age of 96, one may just wish his soul lives in peace, but how much of the reform and coalition nation that we ran in the nineties would have been possible without him?  

As far as the GST rate is concerned even 20% would not be enough. I don't think they can even try going beyond 16%. The unreasonableness of it might even cost us some dinner diplomacy and we do not want the headache.

There is the successful new Direct Tax Code. Yes sir, we will now have the tax slabs that recognize true stratas of income in this country, capping the maximum rate to a minimum of 25 lacs. That one provision has not changed. However, effective Tax for Corporates being 20%, the Corporates haven't agreed and there may be changes there but not in this budget

So now your CTC mirage may start losing a leg or two and you may actually not be the few elite to file a 25 Lac tax return for it is still at 20% rate, while amounts higher may reflect a 30% tax rate. Some of us still have perquisites at those ancient rates that just our local ta commissioner rcognises like that Non Taxable Conveyance of 800 Rs per month and the car leases rebate of Rs 1200 per month and despite the roll back of the FBT and no consumption tax, these things and the EET exemptions are still like playing with fire. By EET i mean those LIC and PF savings that are curently EEE. At least the obvious thing would be not to touch the amounts already invested assuming a EEE treatment for my gratuity, PF, insurance savings and other such. 

Most of the benefit of the new tax code will accrue to those who were filing annual income of Rs 10L in the Personal categories and also continue for professionals and tiny entrepreneurs who have been allowed a taxation on 8% of their turnover without filing any financial statements. Those above 20L will also reap great enefits but they were anyway rid of the surcharge from this year onwards which really hurt those who had to file beyond Rs 10 Lacs

Many fiscal experts have counted the drop in excise slabs from 14% to 8% as a stimulus measure. Even if no one noticed, they are part of the FRBM targets from the last regime ( also the same govt) and will remain.  Also, the hurry to bring the deficit back to 5.5% may not induce any such hurried roll backs that might be long term measures for the Economy. The other one that is likely to stay is the Service tax at 10%

On the supply side, The Government will have to maintain or increase Defence, Infrastructure, Social Services, Healthcare and Education. Rather like a known NDTV Film critic and a regular animated/big actor Hindi pot-bolier, I have dropped the ball here for all supply side targets in one go. I must go back to my stockpicking.

Also the Mid Term Five Year plan review is coming in too late for corrections in spending to begin in this budget.