This years Budget is, on the whole, a positive growth-oriented plan for industry as well as for the aam aadmi, over 7,000 of whom work with us at VLCC. The Budget offers the common man an encouraging increase of R20,000 in individual tax exemption, translating into a significant tax saving of R2,000 for the large number of people in the lower income slab. However, the central excise duty of 1% on 130 items, mainly consumer goods, and an increase of the lowest rate of excise duty from 4% to 5% may, over the year, indirectly reverse the benefit of the tax exemption. The reduction in corporate surcharge tax from 7.5% to 5% is a welcome relief, giving added impetus to the growth of Indian industry, and the lowered rate of 15% tax on dividend from foreign units will certainly mean an increased inflow of foreign funds.
An increased outlay of 24% for education is good news indeed. In addition, the R500 crore allocation for Skill Development Fund is the need to the hour for empowering the underprivileged sections of our society to secure gainful employment.
The increase of 20% in allocation for health is encouraging. Though the service tax retained at 10% is good news, keeping in view the significant contribution of the service sector to the nations GDP, perhaps a reduction of the same would accelerate growth and aid new entrants to the sector. An exemption in the same for the preventive healthcare services sector would have been very welcome indeed.
Overall, the Budget brings a renewed sense of optimism over the country's continued economic growth and we look forward to being a part of this growth.