Coal Mionister Jaiswal opposes govt on jewellery duty hike

 In what could be a big embarrassment to the UPA government, senior Congress leader and Coal Minister Sriprakash Jaiswal has slammed that the excise duty hike announced by Finance Minister Pranab Mukherjee on jewellery in this year’s Union Budget.

Reports, Monday, claimed that Jaiswal made these remarks while attending a meeting in Kanpur where he expressed solidarity with the jewelers opposing the excise duty hike.

Reacting to the move, the Coal Minister even compared some government departments to mosquitoes that suck their blood.

"For only Rs 100 crore of revenue I realise how much you will have to go through. Like mosquitoes in the night, in our country there are some departments that also suck blood," he was quoted as saying.

Bullion and jewellery markets have strongly opposed the imposition of excise duty on unbranded jewellery and doubling of import duty on gold. Many jewellery shops have remained closed in various cities in protest.

Importantly, the All India Sarafa Association has also approached the Congress president and UPA chairperson Sonia Gandhi seeking her intervention in the matter.

Traders are protesting against the budget proposal imposing excise duty of 1% on unbranded precious jewellery and doubling of customs duty on standard gold bars and coins to 4%.

In a week after the Union Budget was tabled, sources claimed that the bullion and jewellery industry incurred a loss of over Rs 10,000 crore, including Rs 750 crore on the auspicious day of 'Gudi Padwa" in Mumbai alone.

Retail jewellers brought under the excise net by the recent budget proposal were more worried and requested shifting of duty to another form.

Traders have warned that imposition of higher levies may lead to a rise in retail gold prices by over 6% in the country, which is seeking to rein in a widening current account-deficit partly fuelled by record purchases in 2011.

All India Bullion and Jewellers' Association said the proposed excise duty on jewellery would affect the business and needs elaborate book-keeping which could be a cumbersome process for jewellers.

Union Budget 2012: What does it offer to women?

We celebrated 101th International Women’s Day this year. However, discrimination against women continues to be a devastating reality in our country. In order to ensure that policy commitments are backed by financial outlays and that gender perspective is incorporated at all stages of a policy or a programme, Gender Budgeting was introduced by the government.

The total magnitude of the Gender Budget has declined from 6.1 percent (2010-11 BE) to 5.8 percent (2011-12 RE). Further, there is a marginal increase of 0.1 percent in 2012-13 over the previous year. The coverage of ‘Gender Budgeting Statement’ in terms of the number of Union Government ministries/departments reporting in the Gender Budgeting Statement has remained stagnant at 33 for the sixth consecutive year. Except for the Ministry of New and Renewable Energy, there is no new addition. Moreover, no steps have been taken to review the format of the Gender Budgeting Statement.

The budget allocation for Ministry of Women and Child Development has been increased from Rs.16100 crore (2011-12 RE) to Rs.18500 crore (2012-13 BE), an increase of 15 % at current prices.

The Steering Committee on Women’s Agency and Empowerment for the 12th Plan had suggested several important interventions to address the gender based disadvantages confronting women and girls. Of these, the Ministry of Women and Child Development has launched a few namely, women’s helpline, development of distance learning programme on the rights of women, implementation of protection of women from domestic violence act, relief to and rehabilitation of rape victims albeit with token allocations for most of them. Infact, no funds have been allocated for Swayamsidha Phase II that as per the 11th Plan was supposed the main vehicle for women’s empowerment.

For most of the existing schemes, the outlays fall far short of those proposed by the Steering Committee on Women’s Agency and Empowerment for the 12th Plan. Allocations for schemes such as Priyadarshini, STEP, Hostels for Working Women have registered a marginal increase over the previous year. This is despite the fact that 2012-13 marks the first year of 12th Five Year Plan.

Most of the government flagship schemes continue to rely on underpaid labour of women. In the Budget 2012-13 also, while the role of ASHAs – the backbone of the National Rural Health Mission has been enlarged further, there is no mention by the Finance Minister to regularise their services. ASHAs will continue to get their remuneration based on activities they perform and targets they are able to achieve.

To ensure women’s empowerment in true sense, it is imperative that women’s capabilities and choices are enhanced. The Department of Science and Technology, traditionally perceived as not “women related”, has launched several interventions exclusively targeting women in order to promote women’s participation in technical fields. It has launched another new scheme, ‘Disha’ in this year’s budget to facilitate the mobility of women scientists. The government needs to emulate such interventions recognizing specific gender based disadvantages that women and girls encounter.

Sensex dips 210 pts on higher tax proposals in Budget 2012

Stock markets fell as investors found the Union Budget proposals Friday as tax mopping and inflationary, with the BSE benchmark Sensex falling 210 points to 17,466.20, despite firmness in global equities.

Refinery, power, capital goods, banking, PSUs and metals stock faced intense selling pressure.

Finance Minister Pranab Mukherjee in the Budget 2012-13 increased service tax and excise duty to 12 percent from 10 percent, which will make cars, fridges, 2-wheelers, ACs and washing machines costly.

Besides, a higher fiscal deficit of 5.9 percent for the current fiscal overshadowed several positives, including lower income tax and strong indications of more economic reforms.

The Bombay Stock Exchange 30-scrip Sensex was highly volatile and moved between 17,871.00 and 17,426.58. It closed 209.65 points or 1.19 percent down at 17,466.20.

The 50-scrip NSE index Nifty plunged 62.60 points or 1.16 percent to 5,317.90.

The hike in the cess created a negative impact on the oil explorers with ONGC, Cairn and RIL falling in the range of 3-6 percent, he said.

Akshay Gupta, MD & CEO of Peerless Mutual Fund said: "The budget trajectory is headed in the right direction. Despite baby steps, the fiscal consolidation exercise is positive for country's finances."

Investors also remained unimpressed with the proposal to reduce the Securities Transaction Tax (STT), as they were expecting it to be removed totally.

Expressing concerns on macro-economic indicators, he said, there is clear cut impression of weak Govt finances, which could see flight of capital to overseas markets like the US, which are doing extremely well.

Broking firm Nirmal Bang's director Kishore Bang said the volatility in the market may come down in the coming days on the back of increased investor participation.

Besides, analysts said steps such as income tax deduction of 50 percent to retail investors who invest up to Rs 50,000 directly in equities will help the market.

Since the upper limit of annual income is less than Rs 10 lakh to claim this benefit, it covers a significant portion of the tax-paying population. This should provide significant impetus for an individual who is not in the markets, as of now, to enter the capital markets, Bang said.

Globally, while Asian markets were mixed, European equities were trading up in the afternoon deals.

Overall, 21 of the 30 Sensex scrips closed with losses.

Sun Pharma was the top loser, down 7.09 percent, followed by ONGC (4.66 percent), Jindal (4.23 percent), NTPERCENT (3.82 percent), Tata Power (3.65 percent), BHEL (3.54 percent), RIL (3.27 percent), Sterlite (3.22 percent), L&T (3.17 percent), SBI (3.11 percent), GAIL India (1.96 percent), Cipla (1.75 percent), Tata Steel (1.72 percent), Bharti Airtel (1.46 percent) and ICICI Bank (1.42 percent).

Eleven of the 13 sectoral indices closed with losses. BSE-FMCG and Auto rose 1.91 percent and 0.22 percent. Oil&Gas dipped by 3.32 percent; Power - 2.98 percent; Capital Goods - 2.94 percent; PSU - 2.63 percent; Metal - 2.22 percent; Healthcare - 2.02 percent; Bankex - 1.92 percent and Realty - 1.26 percent.

The total market breadth was negative as 1,804 stocks closed in the red, while 1,044 made gains. The total turnover was higher at Rs 3,581.35 crore, from Rs 2,767.92 crore yesterday.

Finance Ministry will present Economic Survey today

The Finance Ministry will on Today present the Economic Survey a day ahead of the tabling of the Union Budget in Parliament by the Finance Minister.

This will be Chief Economic Advisor Dr Kaushik Basu’s last Economic Survey as his three-year term comes to an end.

The Economic Survey comes against a backdrop of a high interest rate regime and policy paralysis at the Centre. It is likely to recommend measures to tackle the widening fiscal deficit and combat high inflation that has marred the country’s economic growth.

The survey might also suggest measures to attain a double-digit economic growth. The economy is expected to hit 6.9 percent growth for 2011-2012, the slowest since the global crisis of 2008.

Tax deduction on home loans to be raised

In a bid to boost housing sector credit, the government is contemplating to enhance income tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year, from the existing limit of Rs 1.5 lakh.

The government is considering to raise the tax deduction limit for housing loan in the coming Budget, sources said.

The Budget is scheduled to be tabled on March 16.

At present, a deduction of up to Rs 1.5 lakh is available from taxable income towards interest on loan taken for house. Besides, borrowers can enjoy exemption on payment of principal amount. However, it is part of exemption to savings capped at Rs 1 lakh per annum.

With the property prices and interest rates rising with each passing year, there is need to revise the limit, sources said.
    
In order to arrest the declining growth rate, the industry associations have demanded raising the tax limit ceiling for the housing loan.

According to Ficci Secretary General Rajiv Kumar the exemption should be harmonised with the rising interest rates and increased to at least Rs 2.5 lakh.

"We recommended that the existing tax deduction limit on income tax of an individual should be increased from the current level of Rs 2.5 lakh to at least Rs 5 lakh," CII Director General Chandrajit Banerjee.

Of this, Rs 3 lakh should be towards interest payment to offset the impact of high interest rates, he said, adding the remaining Rs 2 lakh should be exclusively towards principal loan repayment as the present limit of Rs 1 lakh is already overcrowded with several other items.

Echoing views, Assocham and PHD chamber said that exemption limit need to be raised both for interest and principal.

As per the Direct Taxes Code, which would replace the decades old Income Tax Act, there is income tax exemption for up to Rs 1.5 lakh paid as interest on housing loans in a year.