Naman Pipara is a partner of Ahmedabad-based chartered accountancy firm, Pipara & Company, and is an associate member of the Institute of Chartered Accountants of India. Pipara has eight years of experience in audit, accounts and taxation and helps the authorities in probing financial frauds by providing forensic audits.


In an interview with Urban Vaastu, Pipara talks about the union budget presented to parliament by finance minister Arun Jaitley on February 29. Excerpts:

Could you share your perspective on the union budget presented by Arun Jaitley, the finance minister?

The government is acting in a very calculated way. It’s not throwing around a lot of schemes and benefits right away. They feel that the country needs more money to grow; even with crude oil prices coming down they did not pass on the benefits to the people. It was used to decrease the deficit.

The government seems to have its focus on collecting money because it came out with this disclosure scheme, where an individual can disclose concealed income by paying income-tax, surcharge and a penalty, all adding up to 45 per cent.

Do you think it was a farm sector focused budget that would hopefully help lift millions of rural Indians from dire poverty?

Absolutely, but the most important part is effective implementation. There is now a ‘KrishiVikas’ cess of 0.5%. There are already other taxes and levies, but we cannot really measure if the money collected is used effectively.

We can only hope that it is used effectively as it can do wonders. It is a rural and farm sector-oriented budget, which would definitely help these people come up, but subject to the government really implementing the various schemes.


What was there in the budget for middle class and urban Indians?

For the middle class and urban Indians, there are minor benefits. They have increased the ceiling of tax rebate from `2,000 to `5,000 for individuals with income of less than `5 lakh, which will give marginal relief.

Secondly, the tax exemption for house rent allowance has been raised from `24,000 to `60,000. These are the only reliefs for the average tax payer. But the increase in service tax and customs duties on imported stuff would add to the burden of the middle-class.

So while there are some benefits for the salaried class, the government has also raised taxes.

Will the budget proposals help India overcome the challenges posed by external factors including the slowdown in the developed world?

There has been a slowdown in the developed world for quite some time. India has been dealing with this slowdown for the past two years now. We cannot say that it is the government that has made India resist or stand strongly against this slowdown.

It is the hard working people of the country who keep finding opportunities and doing business. Also, India with its huge population is itself a big market with good captive consumption. So despite slowdown externally there is sufficient demand internally.

I don’t think it is sustainable to grow at 7-8 per cent annually, unless there is demand globally. India has really done well because of the fall in crude prices and the country has saved a lot of money. New developments, for which budgetary provisions have been made, will at least take two to three years to materialise and that is when we will see the new benefits.

Besides external factors, there are many internal ones that are affecting India. These include the stress on banks due to non-performing assets. We hear of action being taken by banks to cut down their NPAs, but this should have been done three years ago.

With the government being the major shareholder in banks, it is the taxpayer’s money that is affected by NPAs. In the budget, the government allocated Rs25,000crore to support banks. This is necessary, as even if one bank fails, it can create a ripple effect, affecting not just banking, but even the stock markets.

This is what happened in the US a few years ago. It is good that the government is supporting these banks. But had these banks been prudent in the past, we would not have been forced to pay higher taxes to subsidise their NPAs.