Budget 2006 - Dream or Nightmare?

The Union Budget 2006 has been a mix-up of highs and lows, not sure if this is a "Dream Budget" this time. When Chidambram quoted Charles Dickens' - 'the best of times and the worst of times' for the time the country is going through, he also set the stage of the upcoming budget too. With no unpleasant surprises, the Budget is all set to increase the current GDP growth rate from 8% to 10%. Let me review the areas of my interest in this budget.

For the salaried class, the 1/6 rule for filing taxes has been abolished. As anticipated, the income tax rates will remain the same. I personally feel that FM had thought "Why fix something which is not broken?". However, contribution to pension funds are not 80 CCC anymore, but they come under the 1 lakh ceiling limit. Mr.PC has indicated his proclivity for savings - he's exempted long term FD (5+ years) from income tax. Market transactions become costlier, if you're an investor of securites or funds.

As a consumer, there's one important aspect of this budget that's likely to pinch all our pockets - service tax has been hiked from 10% to 12%. Since this tax applies to a wide variety of services, most of us will be affected pretty directly. He has also hinted that service tax would increase in the upcoming budgets also, thereby decreasing the deficit. Small cars would cost less, which would bring in some smiles for the upper middle class. However, Refrigerators & Airconditioners will be costlier. Processed foods like instant Idli / Dosa mix will be cheaper.

It is evident that FM did not want to walk the rope this time. Nothing was broken and nothing therefore needs to be fixed. Although budget facilitates funds towands Rural investment, infrastructure, health & education, there are always doubts with the pace of these reforms. I don't know why I get the feel that this budget is not so complete; could be since there were not much tax-related changes that would directly impact me. But still, Idly is fine and Dosa is nice; Where's the spicy chutney, Mr. FM?