By DR. WAQUAR ANWAR
Arvind Kejriwal made an interesting comment on the budget speech. He said, “If you closed your eyes and heard Jaitley, you would think it was Chidambaram speaking.”
The truth is that even with open eyes one may not find much structural difference. So it is a same-same budget; neither shame-shame nor (open) sesame. The course of Indian economy on which Manmohan Singh, as a Finance Minister in 1991, has put has been continued by all latter finance ministers, be they in Congress-led coalition or BJP-led coalition or other governments. The impact of global capitalism is so harsh that despite various claims the end result is the same.
The dilemma of economy has been aptly referred to by Jaitley, our new FM, in his budget speech. He said, “We cannot leave behind a legacy of debt for our future generations. We cannot go on spending today which would be financed by taxation at a future date. There is an urgent need to generate more resources to fuel the economy.” [Paragraph 6 of the speech].
The methods of generating resources, inter alia, suggested by him are PPP (Public Private Partnership) and FDI (Foreign Direct Investment). In other words, he has preferred equity capital financing to debt financing. This much is a welcome approach. However, the mote question of the source of equity capital should be debated thoroughly. Both PPP and FDI are wrought with dangerous consequences for the nation. Alternatively, a new definition of PPP as Public-Public Partnership may be considered asking the public at large to invest in nation building. And this can be done simply by issuing Revenue Sharing Equities instead of interest bearing Government bonds so that the gains of the developments of specific projects are shared by the nation as a whole instead of being usurped by a selective and few private entities.
POSITIVE FEATURES
There are a number of positive features in the Budget 2014-15. For example, the increase exemption limit for small and marginal, and senior taxpayers to Rs. 2.5 lakh and Rs. 3 lakh per annum respectively are welcome provisions. Further the proposals to increase investment limit under Section 80C from Rs. 1 lakh to Rs. 1.5 lakh and keeping income tax rates unchanged are moves in the right earnest.
Decision to increase the number of IITs, IIMs and AIIMS indicates that the government considers education and health sectors as its domain. There is a need to be serious in this aspect and further increase government funding in these obligations. The increasing role of private sectors in these areas cannot be discouraged altogether but the concern of a common man on the increase of the cost of these essential services on account of such privatisation should be ignored. Another aspect is that the state’s obligation towards primary education and basic health care at village and rural areas has not been addressed adequately, if not ignored altogether, in this budget.
Extension of the facility of advance ruling relating to tax liability from the Authority of Advance Ruling to resident taxpayers above a defined threshold is also a positive approach. This will help in checking a number of disputes in tax assessments and ease planning of growth in business by resident Indians.
The idea of including slum development in Corporate Social Responsibility is a task that has been stated easily. Its implementation may not be that easy. However, one wishes the government success in ushering in the concept of Corporate Social Audit.
The apprehension of minorities towards continuation of minority welfare activities has been addressed positively for now. Even if it be a tactical approach, it should be welcomed.
The surprise Rs. 100 crores provided for modernisation of madrassas is beyond understanding. The application of this amount for government aided madrasas in states like Bihar and West Bengal is easy to comprehend. But the method of modernisation of major madrasas in states like Uttar Pradesh which are funded by the public at large is a question mark which can be understood in future. For the time being we can say we have noted this move.
OTHER FEATURES
We desist from using the words ‘negative features.’ There are several provisions which call for discussion and clarity. There is one provision at least for which the expression ‘no comment’ will be suitable. It is the provision of Rs. 200 crores for the ‘statue of unity.’ In our economic discussions we may keep a political agenda aside!
The budget speech refers to Gujarat for demonstrating successfully the Rurban development model of urbanisation of the rural areas, through which people living in the rural areas can get efficient civic infrastructure and associate services. This budget basically is prepared in urban development model. The only place rural development has been referred to is here, that too in the name of Rurban development! There is a need to develop rural areas as pure rural areas. Urbanisation is not a proper model of development of rural areas. The loss of rural areas at the cost of urbanisation is an unhealthy move. Simply by providing basic facilities of education, health care, sanitation, road link, portable water, etc. the course of economic development, which is lopsided today, can be corrected. It is a pity that an issue on which the Father of the Nation Ghandhiji deliberated extensively is being ignored by all. One may remind our new political administrators that Gandhi, like Patel, too was from Gujarat. The nation is proud of these leaders.
The budget sets aside a sum of Rs. 2037 crores for Ganga Conservation Mission. It rightly says that ‘substantial amount of money has been spent in the conservation and improvement of the Ganga’ However, one takes note with a pinch of salt the justification which the FM has provided. He said that the Ganga “has a very special sacred place in the collective consciousness of this country.” This expression of collective consciousness of this country for a particular faith system may be hard to digest.
The FM said that the debate whether to introduce a Goods and Services Tax (GST) must now come to an end…. “I do hope we are able to find a solution in the course of this year and approve the legislative scheme which enables the introduction of GST.” Till the other day the FM was in opposition and the moves which they blocked was that of GST. He has rightly expressed that this will streamline the tax administration, avoid harassment of the business and result in higher revenue. One hopes that the states run by the men in opposition now will cooperate too. One calls for rising above political considerations on issues that entail welfare of the nation as a whole.
One may summarise that the Budget 2014-15 is a continuation of the budgets presented earlier. One hopes that the ideal of discouraging debt and encouraging equity, as expressed by the Finance Minister in the preamble of his budget speech, will be debated and a decision for the benefit of this nation as a whole will be taken.
[waquaranwar@yahoo.com]