Welcome to India Budget 1997-98

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The budget as come to my knowledge has two parts one which it deals with the economic part which is the macro econiomic and the second part which is the revenue earning and expanding part known as the micro economics the balance of the two is what it constitute the good or the successful budget.

Now let us take the macro part though not as important for us but very important for the political scenario and the development of the country.

1. GDP(gross domestic product) of our country is been increasing every year consistently at the rate of 7%(which is the average of the three years) in the year 1997 it increased at 6.8% .
2. Forex exchange currency has increased in the previous year at 2.5 billion dollors from 17 billion to 19.5 billion.
3. During the previous year there had been money crunch in the market which I would think because of the money lying with the government treasury in form of scam etc, and rest because of the belief that the others are crying let we also cry. though because of the monetery policies adopted by the government in the june it has been curbed down the bit.
4. As for the poverty line is concern some self employment schemes have been started by the govenment such as GANGA KALYAN YOJANA and the KASTURBA GANDHI YOJNA which would be started by the prime minister from 15th August.
5. One important point to be discussed in agricultural sector is the domestic future trading allowed in baled cotton, raw jute and jute goods and State Govt has been told to abolish all other controls on them as far as possible.
6. For SSI industry 14 items such as rice mills, dal mills, poultry feed, vinegar synthetic syrup, beats icecream, variety of automo- biles and corrogted paper box has been removed.
7. For RBI credit facility of 40% will be reserved for plant & machinery upto 5 lacs, 20% between 5 & 25 and remaining 40% for others.
8. Autonomy would be given to the PSU such as IOC, ONGC.
9. Infrastructure development had been added before in Sec. 80 I A, has now been widened to add Telecommunications, Oil Exploration & Industrial pacts.
10. Foreign Investment by NRI & FII's had been 20%, previously which is now increased to 30%, subject to approval to BOD.
11. With the new development, the promoters of Indian company would be happy with the move to buy its own shares. i.e. the Company can buy its own shares to overcome the fear of an alien company buying the shares and taking over the company. Whether it would be shown as an investment or reduction in capital u/s 100 of the Companies Act is not known ?
12. Section 370. i.e. loan to companies under the same management and section 372, purchase of company of shares etc have been merged that the maximum limit of 60%
13. One good point that has come to the notice is the abolition of FERA Laws that is to be replaced by FEMA (Foreign Exchange Man- agement Act) New Companies Act and Income Tax Act would be am- mended very soon.
14. For Information Technology, in which development is increasing every day the EOU & FPL units would be allowed to sell 50% of their production in Indian Market with the same excise and tax laws applicable.
15. There have been you can say a direct or indirect competition between LIC, UTI & GIC between LIC & UTI in the field of invest- ment in Public Sector infrastructure and between GIC & LIC in the sector of medical insurance. Autonomy would be given to the boards of their organisation
16. For the first time in India Index Bonds would be introduced in which return would be dependent on the indexed rate of inflation. Again a Bold deciesion taken by the finance minister.

It was very disappointing for me to know that only 7% of the total revenue earned by the country is through tax, out of the total population of 900 million, only 12 million pay the tax which is only 1.33% of the total population.

Some of the categories under which I have of divided my budget analysis of micro economics are as follows :

• OTHER THAN COMPANY ASSESSEE
• FOR COMPANY ASSESSEE
• FOR BOTH THE ASSESSEE

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We are Thankful to Shri Manoj Singrodia (A.C.A) & Shri Mahesh Jalan (A.C.A) for their support and contribution.