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Political Play
Ratan Sharda
Two faced budget by Mr. Jaitley 03 March, 2015
Newspapers have been saying there is clear stamp of PM Narendra Modi all over on the Union Budget 2015. The corporate economists, the World Bank type of advisors are going gaga over the budget. But, I beg to differ. I am also suspicious about such a high approval by all corporate people and economists.
This budget does have a stamp of Mr. Narendra Modi, but not all over. The other clear stamp is that of erstwhile corporate lawyer Mr. Arun Jaitley. This is a two faced budget.

In the favourable climate created by media with backing of business people, those who have a dissenting view seem to be Congress and its supporters, which is not true. There is a vast voluble vocal Lower Middle, Middle and neo-Middle Class which has lost its voice and is too confused to respond to its predicament.

PM Modi's stamp is clearly seen in social security schemes that have been floated in this budget. His vision is also visible in special entities floated to ensure that SME industry gets level playing field as far as possible with right enabling environment and easier availability of finance. He has rightly set out a host of measures for farmers but all of them long term. His views come out clearly in yet to be crystallized plug-and-play policies for investment in infrastructure and a little ease in doing business.

I say only a 'little ease' because giving tax rebate to corporates is not 'ease of doing business' that is 'ease of living it up'. Ease of doing business would be clearer policies and lesser policies to start or run a business. There is, not yet, anything in taxation system and policy framework which tells us that it would be easier to do business in India.

From here on, budget carries a Jaitley stamp. Tax concessions given to corporates which look small but have high values tell us why corporate big wigs are happy with the budget. His reluctance to simplify tax codes inspite of this government being in power for nearly 10 months tells us that either this is due to lack of economics background or it is a handle which a shrewd lawyer wishes to use effectively or surreptitiously even in future.

It is generally believed that corporates and MNCs are more concerned by the opaque nature of laws and taxes rather than the values. May be this quantum of relief will give them elbow room to manage this complexity?

Though strong law on unaccounted money or foreign assets is great, I think, there was enough time to set up a body that is proposed in this budget to prepare the terms of reference or actual statutory body.

There was inspired 'breaking news' about 'one-time compliance' (OTC - a more respectable name for Voluntary Disclosure Scheme - VDS, which is always supposed to the LAST) and then interviews by bureaucrats confirming it. Is it a signal for 'friends' to 'manage' their assets before law or OTC comes into place? Impact of such steps is their element of surprise. For a highly intelligent person like our FM, to miss out on surprise seems strange.

Coming to the third missing face ? the middle, neo-middle class, I think this class must be feeling like orphans in this budget regime. Raising the service tax is going to hit small service providers severely. They can either avoid billing which could put them at par with big unaccounted moneybags and they could face severe penalties as per proposed laws. Afterall, law is blind. This will raise prices across the board on all services consumed by all class of people.

Then, there is a silent push in of Swachh Bharat cess of 2 per cent. Why this should not be clearly mentioned and categories not mentioned with budget itself tells us about the scant attention paid to this matter.

Finance ministry wizards tell us that income tax payees have been passed on 4.44 lac of income tax savings. Is it? If such is the saving, is it really targeted at lower middle class whose actual income would be less than this claimed amount? Somebody explained to me about health insurance tax saving. Sir, medical insurance is yearly expense on which you may save something in taxes, but it is NOT savings. This doesn't accrue to you, but to General Insurance companies.

To rub salt into wounds of this class, our minister, Mr. Sinha tells us that RBI is bound to decrease interest rates and housing will become cheaper. Wow. He forgot to add that when RBI reduces rates, saving interest rates also go down. It also begs the question - While top bracket people can depend on Finance ministry, bottom ones on PM, are these people from no man's land to depend on RBI! Did people vote for RBI governor?

If our honourable FM could give a four year time line for reduction in Corporate Taxes, could he not give a timeline for reduction of personal Income Tax. Considering that he talked of 5 lac exemption bracket for personal income tax, what 'achhe din' have suggested to him that now 2.5 lac exemption is enough? TDS, Service Tax, no increase in IT exemption limit, no scheme for housing to become cheaper.

We must also remember that the actual tax collection from this category of salaried class and lower income group is abysmally low as compared to other direct and indirect tax collections. After paying 16 per cent on services, does she/he really need to also pay TDS and Income tax? Is this what the most vocal supporters of BJP worked hard for?

All said and done, ultimately, Government of India is run by a political party who needs to show its sincerity to its supporters who put their faith blindly in Mr. Modi and worked day and night at their own cost to bring in a party 'with a difference'. Today it seems that this difference mean indifference to the class that doesn't have voting muscle or financial muscle to move the policies.

But, remember, they are the ones who create awareness, change the perception by their argumentative nature on the social media and in chattering classes.

Disclaimer - Writer has been a BJP supporter by default all his life, may remain so in face of TINA factor. But, beware, general voters may be more fickle. People like this writer may wait for the right alternative, Average voter may not. Loyal supporter doesn't mean that she/he should not show mirror to BJP and be blind to its follies.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
About The Author
Ratan Sharda is a citizen journalist. He has authored books like 'Secrets of RSS'. A marketing consultant by profession, Mr. Sharda is a keen observer of the country's political scenario.
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