The moment you think “Union Budget,” a tiny voice in your head indicates that this is a very serious topic about which you tend to crinkle your forehead and risk getting a migraine by the end of the day as you ponder on and on about what the Budget is likely to unveil. You tend to feel a huge weight around your shoulders when you think of all the details your dream budget should showcase.
There is perhaps only one person who could talk about the Union Budget and even joke about it in his writings – that is Nani A. Palkhivala. A prolific writer, a brilliant lawyer, thinker and essayist, he pitched for the common man and wrote extensively on every possible topic that affected every Indian. His columns and essays are peppered with a great sense of humor even on the most serious topics including the Union Budget.
Former Chief Justice TS Thakur described Nani A. Palkhivala as a “legend” and a “brilliant” lawyer whose wizardry came to life in a courtroom, leaving everyone spell-bound by his craftsmanship. So, what would Nani A.Palkhivala’s dream budget include? Find out from his insightful essay that was first published in The Illustrated Weekly of India in February, 1982 – here are edited excerpts:
Tax rates fixed for three years: The rate of direct and indirect taxes to remain fixed for three years and will not be changed except for the most compelling reasons. Since the rates are not proposed to be changed every year, it can be included in the Income Tax itself and not the Finance Act. Without stability in our fiscal laws, all planned growth is impossible.
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Governments must live within its means: The government has no right to live beyond its means. Economic stagnation is the inevitable consequence of such disproportion between productive and non-productive jobs. One of the small steps in the direction will be reduction of bloated bureaucracy.
Massive tax cuts: The maximum marginal rate of corporation tax for domestic companies will be 40% and for individuals, it will be 50%.
Stealing from the future: Living on excessive borrowings is really nothing but stealing from the future. There must be a limit to which we are prepared to mortgage the future of this country and it is not sure whether we have not already exceeded the outside limit.
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The ultimate resource: Human resource is the ultimate resource of a nation. Budget should ensure that far more savings will be left in the private sector and with individuals than ever before.
Abolition of sales tax and octroi: The more numerous the points at which taxes are collected, the greater the scope for corruption and evasion, resulting in diminution of public revenues.
Human development: Investment in human development is more productive than investment in physical assets and moreover, it leads to a faster rate of national growth. Roads are the arteries of the nation and constitute the road to economic growth. Section 37 of the Income Tax should be amended to provide that any expenditure incurred by an assessee on construction or repair of roads or on other items of public welfare would be fully deductible for tax purposes.
Incentives for exports: Streamlined procesures, liberal new incentives, and a stable export-import policy should enable us to have a favourable balance of trade.
Partnership between the government and the people: Union Budget should not be an annual affliction but should partake more of the nature of the presentation of annual accounts of a partnership between the government and the people.
This 9-point list is definitely one you may want to bookmark – not because it is path-breaking – because gems of this kind are rare to find. And as Nani A.Palkhivala had once stated, “Every budget has legal effect for only one year, but its economic consequences endure for years.”