As bad as it gets
The union budget 2013-14 presented in the parliament today could
at best be described as “short sighted”.
Problem identified
From the Economic Survey presented a day earlier, and the early
part of the budget speech, it is very clear that the government has precisely
identified most of the problems afflicting the Indian economy. Inadequate job
creation, skill deficit, infrastructure deficit, current account deficit, fiscal
deficit, declining savings and investments, slowing global growth, persistently
high consumer prices, disillusioned youth, unsafe women and child, rising
social and economic inequalities being the most prominent ones.
Besides, need for consistency and transparency in policies and
tax administration are also emphasized.
No cure offered
The budget proposals of the finance minister however do not
appear to be offering solutions. Budget just offers some increments in the
allocations to the current schemes, which might be mostly inadequate.
To the contrary, the proposals seem trivial in many cases;
introduce a fair degree of adhocism; and completely lack transparency
especially in case of provisions that could have negative implications for the
financial markets. For example, provisions relating to retrospective
applicability of GAAR, taxability of entities investing through Mauritius
route, higher tax on income for bond and income funds for individuals, 2% surcharge
on MAT, etc. find no mention in speech.
Can kicked to July 2014
A second reading of the speech and budget proposal makes it
clear that FM has probably presented this budget against his wishes, just to
complete a formality, leaving the task of curing the ills plaguing the economy
to the finance minister who will present the next full budget in July 2014
(assuming election will happen as per schedule in April –May 2014). The
question is what happens if he remains the finance minister in July 2014?
Remember what happened to CWG preparations in Delhi in 2009-10!
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