Jaitley Wants SSI Exemption limit raised to 5 Crores
BJP leader Arun Jaitley wants the Central Excise SSI Exemption threshold limit to be raised from the present Rs. 1.5 Crores to Rs. 5 Crores. He also wants the income tax exemption limit to be gradually, but significantly raised from the present Rs. 2 lakhs. He says, "It will be the major relief to small traders and mid level employees and the common man. The initial loss of revenue is not very significant. Such loss would be partly made up by placing more money in the hands of consumers and earning indirect taxes when consumers spend this money. The more the money velocity, the larger will be indirect tax benefits."
He wants the Goods and Service Tax (GST) to be immediately implemented. Comfort level will be given to State with this aspect, which anticipates a loss of revenue. This will ensure uniform rate of Tax in all states.
All the demands of Mr. Jaitley are fair, reasonable and more importantly will appeal to the middle class, but it is easy to make demands while you are in the opposition and most difficult to implement when you come to power. Nearly twenty years ago, his party colleague Venkaiah Naidu demanded an Income Tax exemption limit of Rs. 1 Lakh, but during the over seven years that his party was in power, Naidu forgot all about his demand. Let us hope Jaitley does not follow his colleague - now that Modicracy is almost considered a certainty.
An employee with a small family living in a city will need at least Rs. 50,000 a month to lead a very average life. Now if you want to knock off his one month's income as tax - that is a big blow for him. But the Ministers and MPs - almost all of whom are worth more than ten Crores each will not understand the pinch. And Arun Jaitley is absolutely right when he says that the initial loss is not significant and the Government can earn indirect taxes by placing more money in the hands of the consumers - and that will also boost industrial production.
The Central Excise exemption limit of Rs. 1.5 Crores was fixed in 2007. Even by Government's own admission there is almost a hundred percent inflation during this period. So, the limit should reasonably be Rs. 3 Crores. But these are not issues which receive much attention during our elections.