Budget 2018!!!

February 2018

It is exactly a fortnight since Budget 2018 was presented. Thought it would deliver some big bang reforms. Did it ? Each one has his own take on this. Much water has flown since then. As always a closer look and more intense reading reveals the hidden punches. Not much to cheer both for individual as well as corporates. Quietly Education Cess of 3% has been replaced by Health Cess at a higher rate of 4%. We thought with the advent of GST we would bid goodbye to surcharge and cess but no both are back with the introduction of Social Welfare Surcharge as well. On many day to day use items, customs duty has gone up too. Is this to encourage Make in India ?

Thanks to GST and the constant changes announced by the GST council, I would say the anticipation around Budget changes in indirect taxes has lost its sheen. In the coming years, Budget would no more be an ‘event of the year’ but just another exercise of the Government. Every year analysing the indirect tax changes itself would be a giant exercise for all of us but not anymore. Good move. Instead of one big shock annually we are subjected to small and medium current shocks during the entire year. So much so that we are living the change each day and have forgotten what it means to be in a stable regime. Oh yeah, this is dynamic and not staid ☺.

Having said this, the big bang is the eye-popping diamond trade fraud disclosed by one of the PSU banks today. For the common man and the entrepreneur it is getting increasingly tougher to open a simple bank account with the maze of documents and signatures. It takes not less than 2-3 weeks but the same so-called vigilant system allows a fraud. The same banking system has put so many checks and balances on getting foreign investment that almost every FDI transaction is a non-compliant one thanks to the delay in getting critical documents like FIRC and KYC. Those who have attracted foreign funds and are struggling to arrange for these documents from their bank and the investor will understand what I am referring to. The bank-to-bank communication system both within India and with the overseas bank is so ‘anti-ease of doing business’ that only those at the ground level can empathise.

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