To hike public spending on health and education, the United Progressive Alliance (UPA) government is considering imposing a 2% health cess on central taxes and also doubling the education cess from the current 2% to 4% in Budget.

The UPA’s national common minimum programme calls upon the government to double public spending on education to 6% of GDP, and on health to 2-3% of GDP over the next five years, from less than 1% now. While it explicitly recommends a cess to fund basic education, there is no suggestion for raising resources for public health.

The government, in any case, is unlikely to face opposition from Left parties, which have cited the NCMP to argue for increased allocation for social sector programmes, particularly in the areas of health and education. A meeting of the UPA-Left coordination committee is likely to be held this month-end to specifically discuss Budget proposals.

The government sources said strong corporate earnings had led to a surge in direct tax collections this year. The collections would exceed the target by about Rs 15,000-20,000 crore, they said. Given the modest tax rates, India Inc may not raise a hue and cry, they added.

Everything is fine and kool , if it can be well implemented. As we all know that India is the second fastest growing economy in the world. In order to cope up with the competition from other powerful economies of the world, we definitely need to concentrate on the security system of our country. Compared to the Social Security system of US, we just stand nowhere.

Let’s see what our FIN MIN Mr. Chidambaram has top offer in this year budget.Aspiring for a better Social security system even if it pinches our pocket in form of a higher tax burden.

Amit Khandelia
(The Author is a Chartered Accountant working with TATA group)

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