BUDGET FAILS TO GIVE BANG FOR THE BUCK
HYDERABAD: Finance Minister Arun Jaitley’s budget presented in the Parliament on Friday hardly reflects the hype given by the Economic Survey that there was scope for big bang reforms.
Neither were there many big ticket reforms by way of disinvestment from non-performing public sector undertakings nor changes in the banking sector which is burdened with NPAs. Mr. Jaitley gave no bang for the bucks except to the corporate sector and a section of the income tax payers. The achche din are obviously quite far away.
The budget does not do justice to the Survey’s claim that Indian economy has hit a sweet spot with lower deficits and higher growth rate. Or, to the forecast that a return to the heady days of double-digit economic growth was expected. If it had done so, Mr. Jaitley would have not allowed himself to be so much driven by the demands of the corporates and left the middle class high and dry without seeming to do so.
Going out of the way to woo corporates
The country indeed needs more investments, that too with greater ease and at lesser cost. The Finance Minister has rightly emphasized on this issue by repeatedly referring to it in his budget speech and even proposing a legislation to replace the multiple prior permissions with a pre-existing regulatory mechanism. So far so good, but does he have to go so far to woo the industry by proposing a cut in the corporate tax from 30 % to 25 %.
He did not show similar concern while hiking the service tax which will make the simple pleasures of life for the middle class like going to a restaurant or a movie more expensive. What then is the budget for if it does not leave a few extra bucks in the housewife’s purse. The steep increase of upto four rupees in petrol and diesel prices, a development about which Mr. Jaitley would definitely have information before presenting the budget, has actually taken away whatever money was originally there in her purpose.
A scrutiny of the numbers show that the Finance Minister’s direct proposals result in a revenue loss of Rs. 8,315 crore whereas the proposals in indirect tax category yield additional revenue of Rs. 23,383 crore. In spite of the bonanza available to Mr. Jaitley in the form of savings of Rs. 1 lakh crore caused by fall in oil prices (pre-budget) and the revision of taxes including two per cent surcharge on the super rich that is expected to yield Rs. 9,000 crore, the Finance Minister does not seem to have enough money for new projects.
Opposition blasts budget
“This is the first time that plan expenditure is going to fall from Rs. 4.67 lakh crore this year to Rs. 4.65 lakh crore in the coming year. The budget is heavily weighed in favour of the corporate sector and those who pay income tax. While the income tax payers (3.5 crore) may have been got some relief, all others have been burdened with increases in excise duty and service tax. There are cruel cuts in the budget for SCs and STs who looked to the Government for support”, said former Finance Minister P. Chidambaram.
The BJP’s allies in the NDA like Shiv Sena and the Telugu Desam are also not mightily pleased, though the latter for reasons that are regional in nature. A. P. Chief Minister N. Chandrababu Naidu said the Centre had left his State high and dry, belying expectations that the budget would make up for failure of the 14th Finance Commission to giving adequate funds to AP.
What is welcome, however, is the emphasis on agriculture by allocating Rs. 25,000 crore for the rural Infrastructure Development Bank and Rs. 70,000 crore to the infrastructure sector besides tax-free bonds for road, rail and irrigation projects.
Mr. Jaitley has drawn considerable flak from leaders like BSP’s Mayawathi for neglecting the welfare sector in spite of announcing a number of schemes. Let us wait and watch whether he will do as much for the vast majority for the poor and the oppressed as he is planning to do for the corporates.