Sunday, February 20, 2011

Further (not second) thoughts on the budget

Expect some measures on the revenue side. To my mind, the most likely candidates are excise hikes. Excise duties were cut in the wake of the global recession; by most measures, India has weathered the recession well, and some sectors, like automobiles, have been more than buoyant. It would be politically palatable to reverse - fully or partially -  the drop in excise duties in those sectors where Pranab can politically peddle them as being elitist.
Cars, I suspect, would be the first target. In fact, if I wanted to schemingly specific about this, I would hike excise on all cars by x amount, say 4%; but, to compensate for the 'subsidy' on diesel, which is 'needed' for freight, tractors and pumpsets, I would raise the excise on diesel cars by a larger amount, say 6, or 8%.

No comments:

Post a Comment