The Game Changers

•    In 1991, Manmohan Singh made it into India’s economic history books when he presented his Budget Speech in Parliament. In a move that was as unexpected as it was daring, he opened Indian markets to foreign direct investment (FDI) and effectively put an end to the erstwhile License Raj in the backdrop of a foreign exchange crisis. Over the consecutive four years, he diligently opened up the Indian economy, liberalized trade and encouraged foreign investors to explore Indian opportunities. He is also credited with bringing down the levels of import duties from their then lofty levels of 300 plus percent to 50 per cent, thereby effectively ending monopolies and encouraging a more competitive market economy, benefitting the Indian consumer. He is also credited with first introducing service tax as part of Budgetary reform

•    In 1997, Palaniappan Chidambaram, tabled what the media famously christened as India’s “dream budget”. Publicized for having brought discipline in government spending and launching an ambitious tax reform, the budget presented an apparent road map for economic reforms in India and included the lowering of income tax rates and the removal of the surcharge on corporate taxes. He also introduced the Voluntary Income Disclosure Scheme, in a bid to curb tax evasion and hawala practices. Remittances into India flourished under his regime and he is crediting with insulating India from in the adverse effects of global recession in his subsequent Budget of 2008

•    Having been keenly debated over the last couple of years, the Direct Taxes Code is expected to replace the existing Indian Income Tax Act, 1961. It is expected to be approved in this session of parliament and come into force on April 1, 2012, being applicable for all income earned in FY 2012 – 13.  The Direct Tax Code is expected to lessen the tax burden in higher tax slabs, make capital gains more investor friendly and gain tax benefits from your home loan. Touted as being extremely investor and tax payer friendly, especially from a long term perspective, it is one agenda that is being keenly awaited to be put into action by policy makers and tax payers alike

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