India

Union Budget 2017: NITI Aayog urges 10% tax slab extension

Niti Aayog

New Delhi, January 12: Although RSS-affiliate Swadeshi Jagran Manch criticized NITI Aayog for its deliberation into sectors like agriculture and health and questioned its role as an institution, Aayog has defiantly come up with its recommendations for Union Budget 2017.

 

NITI Aayog has urged the Ministry to not change the threshold for the income tax exemption at Rs 2.5 lakh. However it wants to extend the slab for 10 percent tax up to Rs 7 lakh instead of current Rs 5 lakh.

At present, income tax is exempt till Rs 2.5 lakh annual income. While there are three slabs: 1) 10 per cent tax for annual income between Rs 2.5 lakh and Rs 5 lakh. 2) 20 per cent tax on annual income between Rs 5 lakh and Rs 10 lakh. 3) 30 per cent on income above Rs 10 lakh.

The NIT Aayog has outlined job creation as the central theme of the Budget.

It wants the government to curb discretionary powers of tax officials and pass a clear regulation on it. Post demonetisation, the move is much called for.

The Aayog seeks tax laws to be clearly laid out so that the future investors know their liabilities certainty. “China has firms such as Foxconn that employs 1.3 million workers and pays wages averaging $3 per hour… India cannot afford to miss out on good jobs that such firms promise,” the document said.

 “The rules governing construction permits, getting electricity, registering property, paying taxes, trading across borders can be cumbersome and thus deter many potential investors from entering business in the first phase,” the document by Aayog said.

Further it promoted the need for massive research in improving seed varieties including the controversial genetically modified (GMo) seeds so as to boost agriculture production.

“Elsewhere, in the world, most notably in the United States, GMO seeds have been in use for over two decades with no adverse effect on either crops or those consuming the products of those seeds,” the paper said.

It also laid down the required attention to increase micro-irrigation, complete the pending irrigation projects, horticulture, fisheries and livestock, reforming the land leasing laws for agriculture sector.

Further, the Aayog advocated three times increase in social sector spending and a decent cut on the mega subsidies that the government doles out every year. The document further highlights points for sustained economic growth and elimination of poverty.

It wants government to divert the extra revenue earned to health and education over the next three years.

The Aayog has made these recommendations in a three-year action plan that it will unveil after the budget for 2017-18 is presented. A senior government official said that the think tank will make revenue and expenditure projections for key sectors.

“Public expenditure on health in India is significantly on the lower side. So the action plan will have some forecast of the tax revenues as well as some sort of road map for expenditure based on the budget estimates of 2017-18 for key sectors — health, education and railways,” the official said.

In January 2015, PM Narendra Modi had introduced National Institution for Transforming Indian (NITI) Aayog as a replacement to planning commission. Since two years of its inception, the autonomy and powers of Aayog have been questioned as it is sought as a no power institution headed by Prime Minister Narendra Modi.

At least the incidence of SJM grilling NITI Aayog on Tuesday suggests so. SJM said the aayog is confused about its role as a think tank or a policy-making institute. “What differences has NITI Aayog made in these two years?” asked SJM in a conference held to access performance of Aayog in two years.

Wefornews Bureau

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