'Net effect of the Budget will be neutral'

'Other things remaining unchanged the stock market is likely to be more or less where it is today, a month from now,' says Arvind Virmani, Director, Indian Council for Research on International Economic Relations.

On whether the Budget will be good for the stock market

My guess is that as far as the budget is concerned the net effect will be neutral i.e. other things remaining unchanged the stock market would be more or less where it is today, a month from now. Other things like Iraq are more likely to have an impact.

On whether CST will be charged once VAT is in place

If a proper VAT is in place there should be no CST. But as currently envisaged by the state VAT,which is perhaps not a complete VAT will run along with a 2% CST.

On if the Budget is war oriented

No, I do not think so.

On how the salaried class can benefit from the Budget

It depends on the level of your salary, if your salary is above five lakhs your standard deduction will go up.There is also some change for those between three and five lakhs.

On if the issue of corruption is addressed in the Budget

The simplification of the tax system, which is essential for reducing evasion and corruption has not been taken very far in this budget. There is however some effort to improve administrative measures for the benefit of the tax payer.

On the measures taken by the Budget to tap the power of irrigation

One of the specific schemes relating to water is to revive traditional water harvesting and water saving structures in all parts of India. This is targetted to cover every district of India. How successful it is will of course depend on administrative competance.

On whether the budget has any new regulations for NRIs

There is some change in the regulations affecting those who return to India, something called not-ordinarily -resident, which has become a little stiffer. The another change is that Indian NRIs no longer need a income tax NOC, when leaving India after a prolonged stay.

On what benefits are given in this budget to physically handicapped people

The exemptions and deductions applicable to senior citizens and for medical purposes have generally been made more liberal.

On how it is benefical for the middle class

Most commentrators have said that this is a pro-middle class budget with a view to forth coming elections.Among the benfits are those related to drugs and medical equipment, college education, deductions and pension benefits, salaried govt. servants and reduction of excise on a number of items of middle class use.

On whether the basic principle of the budget save less and spend more and how will it help the economy

You have a good point; there is an element of tax and spend in the budget, though it is smaller than last year. In my view this is not good for the economy unless policy reforms are made in the infrastructure sectors thus for instance more expoenditures on power, airports and ports would be productive only if polices are reformed.

On whether tax exemption under L.I.C continues

Yes, it continues.