Mrs Gandhi’s First Budget

Press, Volume CIX, Issue 32235, 2 March 1970, Page 13

Mrs Gandhi’s First Budget

(N.Z.P.A.-Reuter —Copyright) DEW DELHI, Mar. 1. The first Budget of the Indian Prime Minister (Mrs Indira Gandhi) as Minister of Finance shows that she intends to tax the rich to help the poor. Mrs Gandhi has raised income-tax rates to a maximum of 85 per cent on incomes over 200,000 rupees ($23,800) a year, and has imposed heavy increases on wealth and gift taxes in the Budget she introduced yesterday. But. the lowest bracket of

taxpayers have beerr given relief, for Mrs Gandhi raised [ the exemption limit to a flat 5000 rupees ($600), whether ’ or not the taxpayer is [ married or has children. . For those paying income ' tax, the allowances will remain for a wife and children. ! Mrs Gandhi said that the new flat exemption rate would make for greater administraI tive simplicity. Smoking and drinking will , cost substantially more, and, after the Budget details were ’ announced, queues formed at > shops as people sought to buy i up existing stocks at the old ■ rates. Car owners will pay almost 10 per cent more for petrol, E and receive less allowance

i against tax, but those who I use bicycles or public, transport to commute to work will receive an allowance of! ' 20 rupees ($2.35), or four ; times the present amount I Mrs Gandhi has made no ! substantial changes in corp- ■ orate taxation, except to strike at business and professional : entertaining by disallowing all such expenditure when; computing profits. This! applies to expenditure on guest houses other than! holiday homes for employees. When Mrs Gandhi came to this part of her Budget, she [remarked: “Those who enjoy the hospitality of their business . friends should no) longer find their sense of gratitude diminished by the!

' thought that a part of the • hospitality is really paid for tlby the Exchequer.” Fl Some postal rates have •been increased, but Mrs [Gandhi has left untouched ''postcards and small-value [money orders used by the i | masses. l| In a bid to encourage ;j sagging tea exports, Mrs [[Gandhi has abolished the ,! export duty on tea, and has i raised internal excise duties ijto boost the export of top- . quality teas. i She has also cut export ! duty on jute products by ,more than half to 200 rupees . ($23.5) a metric ton. [ Import duties on a wide [ range of machinery and other "items have been increased to [i encourage local production.