With industry and tax payer- friendly initiatives taken by Finance Minister P Chidambaram this year, the government has succeeded in achieving unprecedented growth in tax collections.
Consequently, the tax reforms have gained momentum and a roadmap is ready for implementing goods and service tax from April 1, 2010.
Fulfilling his budget commitments, the Finance Minister succeeded not only in containing inflation and fiscal deficit but has also provided ample funds for social projects.
Government is expected to meet the fiscal deficit target of bringing it down to 3.3 per cent this fiscal and to 3 per cent next fiscal.
Indirect tax collections during April-September 2007, inclusive of service tax, grew 14.6 per cent to Rs 1,25,025 crore, compared to Rs 1,09,104 crore in the corresponding period previous fiscal. It was despite cut in customs and excise duties of almost all the products.
While providing a marginal relief to the income-tax payers, Chidambaram raised the educational cess from 2 to 3 per cent and brought employees' stock options under fringe benefit tax net.
During the current year, Chidambaram, however, failed to push the restructuring of food and fertiliser subsidies and provide any major relief to the taxpayers.
Hopefully, while presenting the budget in February next year, he would announce measures to provide relief to the tax payers, while providing more funds for priority areas like infrastructure, education and health to sustain the growth momentum.