Few Insights Into The Budget…

The dawn of a new year ushered in the two most revolutionary and inevitably debatable budgets, of all ages. First to sketch new dimensions for the Indian railways, the nation was witness to some of the most astounding offers in a long time. Shri Lalu Prasad Yadav has scripted yet another awe-inspiring and money-generating rail budget.

Embarking on the goal to develop India, Finance Minister P.Chidambaram presented a historic budget. For the first time, the budget has gone beyond the textual plans and promises of 5-year plans and has materialized the urge to improve Indian agriculture and the condition of the country’s farmers. The plan to discard all loans is a gigantic leap in progress and would bring relief to the 4 crore farmers.

Even then, the reform has its limitations that go onto hinder a holistic development. Only the farmers who have borrowed loans from scheduled commercial banks, regional rural banks and cooperative credit institutions are entitled to the abolition of their debts. Significantly, large fractions who borrow from traders and money-lenders still remain afflicted. In addition, the governmental definitions of the ‘small & marginal farmers’ are very limited and unaccommodating to the existent fallacies posed due to unpredictable monsoon and region-specific dry climate. Thus, the relief plan ignores the plight of the hapless ones hit by the uneven distribution of natural resources.

Experts assert that only through an organized and centralized operationalisation of a nation-wide governmental support to the farmers, measures as uphill as ‘the loan waiver’ can be averted in the future. Deployment of all agriculture related schemes in the entire nation to all classes of farmers will visibly increase our production, gradually but certainly leading to our food security.

Whereas the ‘loan waiver’ implying a rebate of 60,000 crores spelled widespread relief, the IT and the software industry have infinite qualms referring to the taxes posted against their names. Talking factually and figuratively, the IT industry makes 6% of the overall national profit but pays as less as 2.3% of the total tax paid by the nation. Effectively, the IT industry has the lowest effective tax rate besides agriculture.

Joining in is the corporate sector with its bag of grievances with the budget with regard to tax overheads. Their primary reason of anguish is that the budget does not seek to lessen their taxes and hence adds to their troubles. In practice, the Government of India offers incredible incentives to regular tax-payers like the corporate giants and other associated allies. Eventually, small companies with relatively small profits pay 24% tax and the ones with larger gains pay 19% tax, as against the official 33%- thanks to increasing exemptions. The let-go’s for the corporate sector is as much as half the total tax collected by the nation, per annum. However, people have time and will to fret about the debt-money that the farmers were liberated of.

Nationalists have asserted that the budget is a conscious step towards renaissance, encompassing the needs of the voiced and the unheard. However, critics and the opposition justify the unpalatable co-incidence of the farmer-centric budget in conjunction with the nearing elections. Nevertheless, the battle of the two ends might never cease, but unattained steps will have to be taken and the government today has done precisely that.

Arindam Chakraborty