At the dining table in a posh hotel is seated three suited gentlemen who looks startle at the FM dressed as a waiter who is presenting them the plate with a small fish in it.
“A” is marked on each one’s suit pocket. On the fish : 5.2% FD.
Caption: Sir, this is a oriental dish I have cooked specially for you. I deserve a AAA on the strength of my black GDP alone forget the junk status on ballooning FD !
The budget for Fy2013-14 presented today by FM Chidamberam is nothing more than a survival budget of the fiscally profligate government of Dr Manmohan Singh in the current year. Having allowed the CAD to balloon to nearly $75b, unsustainable at 5,2% of GDP , the budget did nothing concrete to address this issue in the semi-crisis state the economy is struggling through.
The hope of containing the fiscal deficit to 4.2% in the coming year is based on assumptions that if doesn’t materialise given the external uncertinties in US as well as in Euro zone will send the low rosy fiscal deficit figures to tatters. Coming year is also the election year and the clamor for social sector spending will put the political pressure to reckless spending and there will be a situation of fire fighting by the next government.
The FM should have taken care of revenue raising measures by taking the hard decisions like taxing the super rich at a higher rate to get substantial revenue than a mere tinkering through a surcharge. The inheritance tax too was let go. So while the billionaires sons and daughters get untaxed wealth for nothing the productive wage earners are taxed on their subsistence salary. Their one dwelling unit home loan is at high interest cost and a high EMI compels them continue to make ends meet through low consumption. Add to their woes is the ab sense of living wages even for high qualified technical and managerial professionals. This is the single most obsene state of inequality in a democracy where taxation policies without doubt has to follow the cannons of equity and justice.
The budget doesn’t address the issue of taxing the rich agriculture too both in respect of Income as well as wealth. Why should there be no capital gain tax on Agriculture land when it is sold or bought in hundreds of acres, It is okay to give the small land holders the benefit. But why spare the large land holders. Political compulsions for votes is ruining the productive sector. Where revenues are available the lack of political will or to pamper the rich sentiments come to play. While the ordinary class continue the struggle with inflation , job insecurity ill health care facilities , lack of infrastructure and so on.
Some say because the budget has not done harm to investor sentiments its a good budget. Look at that ,instead of standing on a firm road map for growth and development through enhanced revenue from the rich and allocating to the benefit of productive and deprived class, many are patting for not taking the corrective steps. Fudging and fiscal profligacy will soon burst at seams. And FM gets the crown by the spin doctors for mere tinkering the budget figures once again this year.
