Given that the NDA government has failed to break the parliamentary logjam and pass critical reform Bills like the Land Acquisition and goods and services tax (GST), it is obvious that Prime Minister Narendra Modi and Finance Minister Arun Jaitley would like to turn the Budget for next financial year into a platform to push people-friendly policy measures.
Though, normally, the last two budgets of any government at the centre are populist, the situation this time is different and PM Modi is expected to go beyond the promises of ‘Acchhe Din’ and deliver now.
This is why the budget preparation exercise this time, which has already been advanced by two months, is going to be PM Modi-style.
The finance ministry has invited suggestions for the Budget from the general public through https://mygov.nic.in Portal ‘in order to infuse more transparency into budget making exercise and to have people as partners in the process of budget making’.
While this is fine, FM Arun Jaitley’s has a challenge of presenting one of the toughest Budget of all times next year.
He has promised to reduce the income tax rate for companies from 30 per cent to 25 per cent in the next four years that would require phasing out of exemptions and this needs to be tackled carefully.
Then, the additional burden of Pay Commission award for the government employees and also for the defence personnel on account of the one rank one pension scheme (OROP) has to be factored in.
Simultaneously, the finance minister is also required to find ways to cut subsidies and enhance public expenditure to push growth.
In this backdrop, he will have limited resources to announce any other measure that would mean taking a revenue hit.
So, will the exercise of seeking suggestions from the general public for the Budget remains just a symbolic one or will it yield any result, is an open question.
The first few suggestions which have come to the portal, though, indicate that, if taken seriously, this will certainly allow the government to sense the general mood of the public which can be a vital input.
“While I appreciate your efforts in bringing the Black Money back from overseas, I’m sure you would agree that much is stuffed in the Domestic Economy too. To deal with this issue of Domestic Black Money, I suggest you bring down the Direct Taxes for Individuals and Corporates (especially Individual) drastically and in turn increase Indirect Taxes in the proportion that it covers your revenue foregone from Direct Taxes,” says Amit Arora.
The views also reflect that those working on the ground probably have a better idea of what is required to be done than those sitting in the government offices.
Varun Goyal has written to the government that, “for promoting local Manuf & boost Growth, pls do
1)Check Excise Duty’s system on import(corruption @ there, allow other countries item sell here @low cost)
2)For manuf. give elec,land, etc. @ low cost for Small scale Comp.
3)GST/Tax should be min. & forcefully implement, so everybody wish to do work in white.
4)Income/property/etc. Direct tax should be min. to work in white money only
5)Only Big currency & cheque sys is good.
6)Public friendly law, min tax, promote white money to come”.
Suchitra Raghavachari is of the view that, “self employment / entrepreneurship has to be given a fillip if discontent among the youth is to be prevented. Technical education, basic skill training, apprenticeships should be given incentives for both institutes & mentorees. Banks should be sensitised towards better disbursement of education / personal – business loans. Focus should be on the MSME / SME sector, tribal area development & seed fund for tech start ups. Tax breaks, SEZ’s, Tech parks & e-retail opportunities will help”.
Clearly, the whole exercise will be fruitful if FM Arun Jaitley collates these views and presents a report along with the Budget on the suggestions the government received from the general public and how far he has been able to accommodate them.