Vijay Kumar Gaba

In the Dvapara Yuga, an epic war was fought between the forces of righteousness (Pandava) and unscrupulousness (Kaurava) , popularly known as the War of Mahabharata. In the 18 days long war, many important battles were fought. In one such battle on the 13^th day of the war, brave Pandav Prince Abhimanyu, son of Arjuna, was killed by the top Kaurav generals.

Jayadratha, the king of Sindhu State, and son-in-law of Kaurav king Dthrutrashtra, played the most critical role in this battle. Jayadratha had a boon from Lord Shiva that for one day in a great war he will be able to check the advance of the entire opponent army, except Arjuna. In this particular battle in Mahabharata war, he used that boon to stop the entire Pandava army from helping Abhimanyu, who was ambushed by senior Kaurava generals and killed. Arjuna was tactfully distracted from the main battlefield. The next day, Arjuna avenged the death of his son, by beheading Jayadratha.

The point in narrating this story is that 1^st February is the day that belongs to you. Like Jayadratha you have a boon that on that day you could choose to help Indian people, ignore them or aggravate their miseries. You also have the power to choose who you want to help, ignore or inflict pain upon. Even though, GST and latest finance commission recommendations have diminished your powers that could be exercised on 1^st February (Budget Day); nonetheless you still have significant powers to make provisions and fund programs that could materially impact the life of marginal people. It is therefore up to you, whether you choose to be driven by short term political considerations and be afraid of the market reactions; or choose to strengthen the core of India's socio-economy structure by incentivizing savers, small entrepreneurs, exporters, and the people engaged in the farm sector.

It may be pertinent to note that this would be your last full budget before the next general election. You may choose to avail this opportunity to make it as memorable as 1991 Manmohan Singh’s revolutionary budget; 1996 P Chidambaram’s dream budget; or waste it for some short term considerations.

In particular, I would suggest the following measures be taken in the budget:

(1)   Interest income of upto Rs. One lac, from small savings, bank deposits and corporate deposits etc. for individual depositors be fully exempted from tax.

(2)   Maximum marginal rate of taxation for the salaried taxpayers with no ESOP, Housing and Transport benefits, be fixed at 25% with section 80 exemptions or 20% without exemptions.

(3)   A comprehensive review of farm subsidies and taxation of farm income may be done. The new regime may include provisions like — The farmers may be assured a minimum level of household income equivalent to minimum industrial wages in the respective states for two adults per farmer household. Farmer households holding less than one hectare of land may be assured minimum remuneration for one adult per household. Agriculture income in excess of Rs10lakh per annum per household may be taxed at the rate of 20% for farmers availing subsidized inputs like seeds, fertilizer, power and water etc. One food processing mill per village set up in cooperative mode may be given 100% capital subsidy and GST subvention for 5yrs.

(4)   Export basket of India should be widened. Significant incentives may be introduced to encourage export of goods and services that are yet not exported or exported in very small measures. Also, incentives may be provided for incremental export to the geographies that account for less than 1% of India’s total export.

(5)   Large corporations may be incentivized to invest in and/or collaborate with their MSME vendors. Full capital gain exemption after 5years on the equity invested in their vendors; 150% deduction on the amount spent on training and technology transfer to vendors; ownership of IPR developed together to MSME; common environmental, civic and other regulatory clearances for the ancillary units set up in close vicinity; etc.

Needless to say, these are just a few indicative suggestions. There is so much more that could be done to accelerate the growth of the Indian economy and make it much more inclusive and sustainable.

Yours truly.