BUDGET ’07-’08: A GOLDEN OPPORTUNITY MISSED OR GAINED?

The silver-foil package presented by Mr. P. Chidambaram has started to unpack, lending us all a rightful peak into its real contents. Under the microscopic observation of the argumentative Indians, it has caused varied reactions and has been variously termed as “a disappointment”, “a betrayal of common man”, “timid” & of course in some quarters “a success”. Arguably the most important annual presentation made in India, holds the destiny of a billion plus population under its sway. Hence an enlightened & a serious discussion is called for…

A soaring inflation & maintaining the high growth rates are thee twin primary concerns of today’s Indian economy. Budget this year could have been the right opportunity to address both the issues well, but appears to have sadly failed on both the counts. Apart from a few tinny-winy steps it has largely failed to bring about any relief from the clutches of the soaring inflation. Even on the 2nd front it has failed to take along the Indian Inc. and has in the real sense delivered no goods for boosting up the performance of the economy. A few provisions like hiking the dividend tax (by 2.5%), bringing the IT sector under MAT (Minimum Alternative Tax), extending the clutches of FBT (Fringe Benefits Tax) & Service Tax and even the hike in Education Cess (on all taxes) are only steps in the opposite direction. Even the higher tax compliance, instead of being rightfully rewarded, has brought no tangible gains (in the form of some major tax concessions) for the complaints. Missing the golden opportunity the Fin. Min. has failed to focus on the rising unemployment & other major issues of concern. The outlay of women specific progs. stand at a pathetic low of just 0.01% of the total budget. The emphasis on reduction of import duty on the food of cats and dogs, when millions are starving, says it all…

The only light in the darkness appears to be the ‘better late than never’ focus on the farm sector and provision for wider credit net and a laudable insurance scheme (the ‘Aam Admi Bima Yojna’). The socialist in the fin. min. got ventilation in forms of highest priority to the social sector, extension of NREG to another 130 districts and a promise to provide 1,00,000 jobs for the physically challenged are laudable. A reduction in the peak rate of customs duty was also desired. Even a hike in spending in the health and education sector deserves applause. The scholarship schemes aimed at taming the high rate of school drop-outs and the above welcome measures however, sadly, appear to be a mere face saving exercise and are even being blamed to be populist in orientation…

The golden opportunity though seems to have been overall missed could have been gained. A few innovative and imaginative steps like use of a part of the huge idle forex reserves for infrastructure funding without monetary expansion (as reco. by Deepak Parekh committee) and even a long awaited reform by simplification of direct taxes structure could have helped. An incremental approach by the Fin. Min. seems to have largely failed to balance the social and economic priorities of the 21st c. India that could have added a few more steps towards our gr8 nation becoming a responsible ‘super power’ of tomorrow’s world…

**HISTORY BEHIND THE STORY:
Ø The term ‘budget’ was 1st used in the present sense for the first time in 1773, in a satire entitled ‘opening the budget’ directed against Walpole’s (England) financial plan of the year.
Ø The term ‘budget’ is derived 4m an old English word ‘Bougett’ which means a sack or a pouch.
Ø Railway and general budget in India was separated in 1921 on the reco. of Acworth Committee.