The Union budget earns a thumbs-up for not being an election budget. It doesn’t go overboard announcing waivers and tax cuts. Finance Minister P. Chidambaram needs to be lauded for a balanced overview of the situation. The Nirbhaya fund for safety of women is a good step forward. The increased allocation for education and skill development along with scholarships to students belonging to the marginalised sections is also welcome. Although the budget falls flat on measures to curb inflation, the resource allocation to the ministries and departments like defence, space, science and technology is prudent.
Populist and cautious are the words I would use to describe the Union budget 2013-14. Mr. Chidambaram has introduced a number of schemes to accommodate the interests of large sections of the middle class and the poor. However, the revenue side has cast a shadow of darkness. Taxing the rich and helping the poor is absolutely fine but the strategy to generate revenue to fund many of the programmes and contain fiscal deficit is vague. The Panchayati Raj Institutions have got nothing except a proposal of an additional Rs. 200 crore. This is mere tokenism. Unfortunately, the priorities spelt out in the budget do not take us closer to decentralisation.
Mr. Chidambaram has continued with the NDA’s policy of taxing the middle class. A salaried class person is subjected to multiple taxation. He pays tax on his income. Due to inflation, he pays much more for any purchase although his salary does not increase. He pays tax on all commodities purchased or services procured by him in the form of VAT and service tax. Even a senior citizen is not spared. He pays tax on the interest he gets from his lifelong hard earnings deposited in the bank, even if he has no other source of income.
Nothing has been done to provide relief to such categories. The government has not announced any steps to bring out the black money rampant in our country. Nothing has been announced to tax the rich who do not declare their income. The budget will make the middle class and honest taxpayers pay more and reduce their purchasing power.
Budgets presented under compulsions of globalisation and liberalisation — withdrawing subsidies and empowering the corporates — have failed to yield the desired result. The prevailing industrial growth should have taught the government the basic fact that there must be market for industries to survive and there must be buyers for markets to survive, and there must be money in the hands of people, not corporates, to ensure the survival of markets. The UPA government seems to have realised it, which is why the corporates and the wealthy are being subjected to a 5-10 per cent surcharge. It may not bring about any sweeping changes but is a welcome change.
The Union budget is a balancing act by the Finance Minister as much between outlays and revenues, as between populism and economic reforms. The higher outlays for social sectors and more focus on key social groups — women, youth and poor — are understandable despite the absence of an effective tool to ensure outcomes. It would have been better had the Finance Minister added to his list of philanthropy another vulnerable group — pensioners.
Venkatesh N. Muttur,
There is the usual noise post-budget, with a cry over the rise in prices which everyone expects given the ground realities. The imported oil glutton will continue to contribute to the bulk of the price rise. Increasing cost of labour, raw materials, power outages, increasing consumption, and drought are some other factors.
A major factor, of course, is the control of our economy by vested interests which are happily supported by all-pervading corruption. Scams do not surprise us any more. After 65 years, we are still a fledgling democracy paying a huge price to preserve our freedom. This is a deep disappointment for the generation which welcomed freedom during the Nehru-Shastri era.