Monday, March 19, 2012

Our irrelevant Budget

I was watching CNBC TV18 i.e. Moneycontrol channel when the FM’s Budget speech ended.  Udayan Mukherjee kicked of the programme saying that the Budget was a complete waste of time, directionless, containing absolutely no `big ticket’ items, just a mere tinkering of existing rates. Personally, I thought he had accurately summed up the Budget. It was exactly that. The sentiment expressed by Udayan Mukherjee was echoed in almost the same words by Mr J J Irani. The Budget is nothing but tinkering, and tinkering with matters that are so infinitesimal that it boggles my mind.

But, unfortunately, after that speaker after speaker, many of whom are what I am not, went on to say it was a good and 'realistic' Budget. The fact, according to our leading figures, that Finance Minister had said that he would control the fiscal deficit, mind you, merely said, not spelt out how, was a great thing. This is something we should be eternally grateful for, something that will take us out of the mess we are in. This was our Captains of Industry speaking. Cowards is what I call them. They are as cowardly in this politically correct world we live in, as each and every member of the Congress Party.

The reason that each of these industry figures is a coward is not difficult to understand. They have to deal with the Finance Minister and his colleagues everyday to have favours doled out or discretion exercised, obviously in their favour. I was sickened.

You know what I am not. Therefore, I should deeply respect the analysis and opinions of the Captains of Industry, i.e. those who are what I am not. Really? What do these Captains have to say about the retrospective amendment to get over the Vodaphone judgement? In a word, nothing. Where are the voices of India Inc? Why are Deepak Parekh, Narayana Murthy and Mukesh Ambani not expressing their outrage at this amendment? It's been three days since the Budget was delivered in Parliament and there has been a deafening silence on this absurd idea. Will these Captains not want to sell out to an MNC in future? That is what every Indian Captain of Industry does anyway. How do these Captains now manoeuvre past the retrospective amendment? The amendment is in effect from 1962, well before I was born!! Astounding. And it’s a good Budget?

Let me tell you about the irrelevant tinkering. Do you know, for instance, that the duty free baggage allowance has been increased by a staggering 40%? Now you can import goods worth USD 700 or approximately Rs 35,000/- as baggage allowance. Brilliant is it not? The previous limit was only USD 500. Now you can import one more pair of Diesel jeans. Does this really matter? What is the point of this amendment?

Another aspect of this tinkering is introducing TDS [withholding tax] on director’s fees. Director’s fees are paid to individuals who are non executive directors on the board of limited companies. Now they will not be able to escape the tax net. No sir!! Their fees are subject to withholding tax. I marvel at the sheer brilliance of this move. I would never have thought of it.

What about these two fantastic benefits that we can now enjoy. Matches, yes matches manufactured by semi mechanised units will be cheaper as excise duty has been slashed. And processed food manufactured with, hold your breath, soya, will be cheaper. Wow I am breathless with excitement.

You want more? Refills and ink used in pens costing less than Rs 200 have been exempted from excise duty. Children in schools can now have ink fights and it will be far cheaper to buy a new pen. How about this one, excise duty on LED lamps is cut. Wow.

India has had some great thinkers and visionaries. Mr. M K Gandhi, Mr. Vallabhbhai J Patel and so many more. Mr Pranab Mukherjee has been a Finance Minister for several years. India is at crossroads. Inflation is a monkey on our back, global crises rage and yet we have absolutely no direction in our Budget. Mr. Kaushik Basu is the Chief Economic Advisor to the Government of India. He gave up a lucrative career at Cornell University to take up this post. Is this hopeless Budget something he should be proud of? Is this what his inputs are to our Finance Minister?

I will not burden you much more with the other prophetic moves. It’s just more and more of the myopic, irrelevant, tiny tinkering vision. There is no roadmap for the control of the fiscal deficit. So the Government will have to simply print money. We have rampant inflation that the RBI is trying to correct. Here is our Nanny doing just the opposite. Have fun guys, the good times are not going to last.

1 comment:

  1. There are too many systemic problems that cannot be corrected for political reasons.

    The recent, most obvious example is the fare hike by the Railways Minister and the reaction by the populist-in-chief, Mamatadi.

    Unless we get a government that is not obsessed with either staying in power or coming back to power, we're going to get nowhere.