Loan waiver, the biggest Budget story this year

This was contrary to the usual trend when two to three Budget stories jostle for main space on the front page of the pink papers.

January to March is the official Budget season for the financial dailies when they charge a substantially higher premium on their ad rates. This is also the time when the pink papers try to penetrate the closed walls of North Block to get an inkling of impending taxes, levies, duties, cesses etc. Many trees are cut to speculate in the pre-Budget series on the big Budget decisions.

On how seriously are the speculative stories taken by analysts, Krishan Malhotra, executive director, PricewaterhouseCoopers said, ?While the dailies got the direction of overall Budget largely right, the forecast on many specifics went wrong. For instance the prediction that the Budget would be political in nature turned to be true, concession to women and senior citizen also proved to be correct, however the prophecies on corporate tax, surcharge and in the Information Technology sector were far from accurate.?

Similarly Amitabh Singh, tax partner Ernst and Young said, ?The team in the finance ministry, which puts together the Budget is secluded from the media almost a month before the FM makes his speech. So most of the media reports, which appear during this time, are on the basis the prevailing economic scenario, past trends and expectations from the industry. For a lay reader, such media reports are of interest as they form their expectations from the Budget based on such reports .?

This year the Budget story of bumper loan waiver was published in different forms in various dailies much before the finance minister made a formal announcement to that effect on the floor of the House. The Economic Times reported on January 28, 2008, that government might announce a 60k crore-bumper loan waiver for farmer. The Financial Express published on January 9, 2008 that the government is studying a proposal to waive taxes on the provisioning of non-performing assets (NPA) by banks, especially on farm sector lending. The Mint reported on February 18, 2008 that the Union government is planning the largest farm loan relief package in the country?s history totaling atleast Rs 32,000 crore.

During Budget 2007, the major stories that competed for the space in pink paper were levy of Fringe Benefit Tax on ESOPs, cut in peak customs duty, increase in Dividend Distribution Tax, extension of MAT to IT sector. Budget 2006 witnessed stories like ?Hike in MAT rate to 10% from 7.5%?, ?GST to be introduced by April 2010? , ? elbowing each other out on the front page.

Budget 2005 had ?Introduction of Fringe Benefit Tax?, ?FM sets 5-7k crore divestment target?, ?standard deduction done away with? making headlines in the days following the 28th of February.

The year before in 2004, stories on introduction of transaction tax, FDI in insurance, telecom and aviation sector vied for attention post the B-Day.