Earlier in Forum






P Chidambaram

Q: What do you think of P. Chidambaram's Budget?
(This is the second instalment of readers’ views in response to this question)

PC plays a trick to reward evaders

Mr P. Chidambaram has acted like a magician, who amuses his viewers with his tricks and earns their praise.

No doubt that PC has raised the exemption limit to Rs 1 lakh, but it's a disguised sop, while in reality the tax slabs haven't been amended. If you earn Rs 1,00,100, for that additional income of Rs 100, you will have to pay income Tax to the tune of Rs 9,200.40. How do you explain a taxpayer's agony?

PC has made it mandatory for everyone to file income tax return. This includes those who don't have to pay any tax because of the enhanced exemption limit. It seems that because the income tax officer has been rendered idle by this new exemption limit, PC wants to keep him busy by making him handle returns, or he does not want his dear taxmen to be deprived of their earnings from the scapegoats. A surcharge like 2% cess on tax for primary education is understandable only during national emergencies like war and earthquakes. Education is the primary responsibility of the government and a continuous process. PC has freed the government of this responsibility and passed on the burden to the public.

The government has written off Rs 96,000 crore of income tax arrears, but there are still Rs 84,000 crore of these arrears which will become unrecoverable in due course of time. PC has proposed no step to recover these, but has tightened the noose around the neck of the honest taxpayer and spared the real evader. He has not taken any step to ensure that Rs 5000 crore realised from the cess would be spent on education only.

The UPA government has created enough scope for the oil companies to further increase the prices. What else can you expect from a populist Budget.

— Dr TIRATH GARG, Ferozepore City

Much ado about the Budget

It is a near perfect Budget, a fine blend of populism and pragmatism. All credit goes to the Finance Minister and his team. It is neither possible nor required to please all the people, but he has satisfied nearly 90 per cent.

However, I fail to understand the hype before the Budget, as if a blockbuster is to be released. The annual Budget is a natural process of continuation of financial policies and it should build up on the edifice that exists already. It should not be an occasion for creating ripples or making major changes every year. Over the years, people have become unsure if what has been done this year will hold good the next year. This is particularly true of the tax structure. It keeps changing every year, which is not conducive for savings and investment.

Second, a Budget is as good as its implementation. Mere rhetoric won't do. Here comes into picture the loyalty and sincerity of our bureaucrats and representatives. They must transform the Budget into reality and ensure that its aims are achieved. There should be effective monitoring and midway correction when required. The Finance Minister should give the nation a progress report every three months. Then alone can we say: "Mission accomplished".

— Col R.D. SINGH, Ambala

Budget 2004 is anti-people

The Union Budget 2004-05 is a confused, directionless, inflationary, anti-growth and anti-people document. It will adversely affect economy, trigger inflation and make common man's life more miserable.

Service tax, which the general public perceives as legalised extortion and deserves to be abolished, has been extended to cover 13 more services and its rate has been hiked to 10 per cent. Dr Manmohan Singh was the first Finance Minister to introduce service tax in 1994 on telephone, general insurance and stock broking. Now when he is Prime Minister, this tax covers 71 services and will adversely affect the common man all the more.

This Budget contains an innovative securities transaction tax of .15 per cent. Transaction tax will finish day traders, jobbers and arbitragers, and cripple the share markets. This must be withdrawn. A 2 per cent cess on all Central taxes is also unwelcome.

To increase government revenue, there is need for curbing rampant tax evasion by modifying existing tax laws and curbing wasteful government expenditure. We don't actually need more taxes like service tax and securities transaction tax. Every year, office of the Comptroller and Auditor General gives a detailed report of tax evasion and wasteful government expenditure. Besides, since the Income Tax Act covers the income of all service providers, there is no need for a service tax.

Laws enacting service tax and securities transaction tax can make the country paradise for only one category of citizens: the lawyers. The common man will continue to suffer because of multiple laws and multiple taxes. As per a legal maxim: "more the laws, more the misery".

Late American president Ronald Reagan once said: "Government is a problem; not a solution." It is surprising why every government is bent upon proving him right.

— J. G. ARORA, Mumbai 

Are we so poor indeed?

Our country has reached a crossroad, where we need pragmatic and sensible policies to improve fast the economic condition of our people. India is rich, but her people are poor due to faulty policies, poor implementation, overspending, inflation caused by corruption, delayed justice and denying merit. We have all the resources to be an industrial superpower, but we are not managing our economy properly. We waste time in debating various economic strategies and damage our own interests due to our myopic visions of the roadmap to progress.

The Indians who go abroad and take up responsibilities at the top level don't disappoint the people who get them there. Their performance cannot be matched by any of the Indian politicians. We also don't use their skills, experience and knowledge. How are we going to deliver results based on half-baked strategies?

— Prof S. SITARAMAN, Kaushambi (Ghaziabad)

Left not right at Centre

The Left should see reason and not embarrass the government. The way the Left parties have raised a hue and cry over Chidambaram's Budget proposing a hike in the FDI cap in insurance, telecom and aviation sectors is surprising. These parties should understand their responsibility, more so when they are supporting the government from outside. The Left has always been making irresponsible statements whenever the government comes out with new policy. Earlier when there had been a minor hike in the prices of petrol, diesel and cooking gas after long deliberations, these leaders were out on the road, demanding a rollback. It's happening again. For the first time we have top economists preparing the Budget any it's better than any other Budget presented before this. It is not good to stand in the way of economic reforms, which India desperately needs to move forward. All earlier apprehensions of the Leftists have proved to be false.

We expect the Left to practice more restraint and not risk the fall of the government by opposing the Finance Bill.

— Prof K.L. BATRA, Yamuna Nagar

The nine per cent lollypop

Chidambaram's Budget is not "pro-poor, pro-common man and up to the expectation". As long as the rural-urban disparity persists, we can't have economic growth with social justice. Meagre provisions on new social initiatives are inadequate, viewing the task ahead. No incentive has been proposed for woman. Senior citizens have only been lollypopped with 9 per cent interest on saving, although there is a proposal to increase tax on household goods, cement and steel, which will affect the middle class. The increased rate of service tax and levy of 2 per cent cess will burden the masses. Costs of inputs like fertiliser, seed, power and pesticides have been overlooked. Kerosene and LPG price hike is likely, as there is no provision of an increase in the subsidies. However, the proposals on flood control, water harvesting, and cutting the expenses of ministers, besides the hike in defence outlay, are appreciable.

— O. P. KAPUR, Kurukshetra

It’s good for the rich

This new Budget does not give any comfort to lowly paid middle-class citizens, but clearly threatens a hike in the prices of essential commodities. The increase in service tax and a new cess will put an additional burden on the common man. The proposal to give tax exemption on the pension received by ex-servicemen and their kin is laudable. It is a budget for the rich, because now their purchases of luxury items will cost less. No clear indication has been given about the relief granted to senior citizens. It appears that the new scheme has been given to (thrust upon) senior citizens in lieu of The Varishtha Pension Bima Yojna, which, if true, will be a cruel joke. It will give senior citizens no alternative to deposit their savings. It would have been better if they had been given a bit higher interest on their savings and a choice of schemes for convenience.


Great script

The Budget is a balanced one, which the Finance Minister has scripted with great finesse, ingenuity, astute brain and consummate professional approach. It has all the ingredients to please some people for some time and some for all time, but it has nothing to please all the people all the time. By raising the income tax exemption limit to Rs 1 lakh, the minister has met the long-standing demand of the salaried class. This Budget is not second to his "Dream Budget" of 1997. It has more positive suggestions than negative ones.


Nothing in it for anyone

The new Budget is anti-employee. The Finance Minister, Mr P. Chidambaram, has not helped those taxpayers whose annual income crosses Rs 1 lakh and a cess of 2 per cent has been proposed to increase their burden. A parallel economy generated by black money has devastated the fiscal health of India. Tax evaders continue to dodge the government in connivance with the taxmen. Writing off loans or giving soft loans won't bring the farmers out of the debt trap. Infrastructure for rural development needs to be strengthened for a viable economy.

 — KARNAIL SINGH, Shahpur Kandi

Gain for senior citizens

Mr Chidambaram has shown a good gesture to senior citizens by increasing the rate of interest on their saving. By doing so, he has given relief to many. Senior citizens were looking forward to him for this. He deserves their praise. The Budget has also given relief to the common man by raising the tax exemption slab to Rs 1 lakh.

— J. C. BATRA, Chandigarh

Farmer is the winner

The Budget of Finance Minster P. Chidambaram is good because he is thinking about both rural and urban folks, education and infrastructure, health and power, family pension and water. His irrigation schemes will benefit farmers directly. Soft loans to farmers should steer them away from suicides. Less cost of tractors and machines is good news for them.


Implement it

India lives in villages and the Finance Minister has engineered a suitable Budget keeping in view all aspects of development of this real India. If the implement is proper and funds provided are not misused, the country will shine. The secret of Japan's success lies in the way it used its budget. It is for the bureaucracy to ensure that corrupt practices do not come in the way of proper utilisation of such a fine Budget.


Unfit for the salaried class

The UPA government's maiden Budget is unfit for the salaried class. Raising the tax exemption cap to Rs 1 lakh does not apply to persons who have had longer service and are getting more than Rs 2 lakh in annual pay. All salaried employees will have to pay more tax during the current financial year on account of the education cess. The FM should have enhanced the exemption limit to a minimum of Rs 75,000, touched the slabs from 10, 20, 30 to 5, 10, 15 per cent and enhanced the standard deduction to Rs 50,000.

— K. K. SACHDEVA, Patiala

Next Thursday: More letters on this topic.


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