budget in the face of a global slump

will i have to pay higher income tax, will cars, tv sets and mobile phones become cheaper, will lpg cylinders cost more, will cigarettes cost more..... so many issues depend on the budget.

the budget is a statement of all estimated receipts and expenditure of the government (govt.) to be laid before the parliament every financial year. it is divided into three parts - consolidated funds, contingency funds and public account. consolidated fund comprises all revenues received by the govt. including loans raised by it, receipts from the recovery of loans granted by it, tax returns etc. any withdrawal from this fund requires the approval of the parliament. contingency fund is the fund set aside by the govt. to meet emergencies or unforeseen expenditures which cannot wait for authorisation and so, is kept at the disposal of the president. public accounts comprise the money that the govt. gets from various schemes like provident funds, deposists, advances, small saving schemes etc.

budget presentation gives the govt. the opportunity to revise tax rates. it also gives an idea about the sectors that the govt. would be planning to encourage and those which it seeks to discourage.

from nehruvian socialism to manmohan's market economy, india has come a long way. from the first budget by shanmukam chetty in 1947, down to today for pranab mukherjee, the canvas has seen streaks of creativity to times of just hoping for a better future. the sensex would have got an envying 10/10 on the gymnastic scale. the importance given to the agricultutal sector has shifted to industrial, financial and other sectors. from the fifties, indian budget highlighted the public sectors till the economic liberalization in 1991 when the control of the govt. over public sector was reduced through disinvestment.

to revive or at the least, keep a steady economy during a global economic slump is a tough task. since the sluggish economy has slowed down the govt. revenue collections, the expenditure figure will be significantly higher than predicted. moreover, the food security act through which the govt. has promised to provide 25kgs of rice or wheat at Rs 3 per kg to families below poverty line will increase the govt. expenditure.

over the years, lots of taxes have been introduced like vat (value-added tax), fbt (fringe benefit tax), mat (minimum alternate tax), stt (securitues transaction tax), ddt (dividend distribution tax) etc etc. at least, this time, fresh taxes cannot be imposed. the middle classes will expect concessions to relieve themselves from declining salaries and job losses.

so, an increase in plan expenditure will increase the fiscal deficit. to borrow cautiously would be the option for the finance minister. its too late in the year even to go for disinvestment options.

the govt. will have to construct simpler tax policies, make simpler procedures for foreign investors, increase infrastructure investments etc... one thing i would love the govt. to implement would be to make politicians accountable. they should be punished for wasting money. in my lifetime, will i ever see a politician go behind the bars for wasting public money?

this time, the near-majority govt. will serve historically, the most critical budget for lunch. lets see how it affects our appetite. i have told amma not to prepare anyhting 'special' for lunch today...i might throw up..