Earlier in Forum






Q: What do you think of
P. Chidambaram's Budget?

(This is the final instalment of readers’ views in
response to this question)

Illustration by Sandeep Joshi

Illustration by Sandeep Joshi

Farmers need more than just tax cut

The Budget presented by Mr P. Chidambaram surely is pro-poor, especially for small-time farmers and the lower middle class. The country today needs better infrastructure, and the Budget aims at improving the educational infrastructure and providing scope for development of health services in rural areas, which are welcome propositions.

The income tax exemption limit that has been increased to Rs 1 lakh will not, however, prove to be good for those who earn beyond Rs 8,500 per month roughly, since they will have to pay a compulsory 2 per cent education cess on their income. How judiciously this surcharge (which is supposedly for a good cause) would be utilised remains a big question.

Although this Budget has provided farmers with full tax exemption on tractors and other agricultural implements, no mention has been made regarding their need for better seed, irrigation facilities and pesticides. The government must also provide them with suitable markets so that they can sell their products directly to the companies.


Help provide security

A major requirement for the Budget is to provide means to ensure the security of citizens at home and outside, including while travelling in public transport. Government machinery should be equipped with the modern equipments to enable it to combat terrorism. The number of courts and judicial officers should be increased for speedy disposal of cases, particularly criminal cases, to establish order and oust criminals from the democratic process.

I endorse former Prime Minister Chander Shekhar’s view that instead of civil aviation, the allocation for irrigation, soil and water conservation should be raised to Rs 1,603 crore. The border state of Punjab, too, deserves package and incentives available to Jammu and Kashmir, Bihar, Arunachal Pradesh and Himachal Pradesh, etc. for industries provision.


One special package too many

As a soldier-turned-farmer, I welcome Chidambaram’s Budget because it gives me hope for the revival of agriculture. Steps like setting up a National Horticulture Mission with a view to helping farmers get out of the traditional cereals rut, a model law to create a single market for agricultural products and the promised attempt to double the flow of credit to agriculture are praiseworthy measures.

Now Mr Chidambaram needs to fix the delivery system and ensure implementation of these proposals. The allocation for fertiliser subsidy has not been increased, despite a sharp rise in the expected subsidy bill for the current fiscal year due to the rise in the cost of production. Although I welcome the move to grant deduction on profits for hospitals in rural areas, the stipulation of its applicability to hospitals with 100 or more beds may discourage some promising and dedicated young doctors from entering this venture.

However, through this measure Mr Chidambaram has recognised the role of private sector in healthcare. Many private clinics give us substandard service at a high cost. Why don’t we create more PGI/AIIMSs in areas like Abohar/Bathinda/Malout so that emergency patients from the rural areas don’t have to be moved miles across to private hospitals/clinics that are out to fleece them?

— Lt Col ONKAR CHOPRA (retd), Abohar

Where’s my pat, FM?

The Budget lacks direction and initiative. The Finance Minister has given tax relief to some and completely ignored the rest. Nothing has changed. Restructuring the income tax slabs is the need of the hour. The silent majority needs a pat on its back for its hard work and contribution to the development of the economy. Those who are only contributing their might by producing more and more children should at least be shown that it would not be tolerated any more. However, the education cess is a welcome step, provided it is used in the right manner and not wasted in giving the so-called education to those who are not interested in getting it.

— OM DATT SHARMA, Chandigarh

Make cable TV cheap

It is a good ordinary Budget, capable of taking care of all the need of the masses. Raising the tax cap is a nice sign for entrepreneurs and manipulators. The tax-free income can now be invested in property, shares, banks, jewellery, travel and tourism etc. without any questions asked. The Budget gives enough relaxation to small firms. Nothing has been said about the entertainment sector, it seems. The Budget should have made cable TV even more cheap, and even the electricity supply should have been more subsidised. The LPG cost hike can, however, continue to burden the common man. The information on the upper ceiling for exemption from income tax for religions bodies has religiously not been disclosed.

— AMAN JAIN, Ambala City

PC has lowered his image

This is an average Budget, designed to serve more a political purpose than the general public. The middle class has been burdened by the 2 per cent education cess on all central taxes and the increased rate of service tax, with more services brought under its ambit. Raising the tax cap is not a rational decision. How much taxes are being collected, though, is still a matter of great concern. For the middle class, its income has not shown a proportionate upward trend. The minister has lowered his image drawn from his earlier stint as Finance Minister.


Not dynamic

The Budget is similar to a work of “modern art,” which is colourful and arresting at the first sight, but leaves one confused and pregnant with queries when probed. The Finance Minister’s endeavour to please all has simultaneously resulted into displeasure for all in one way or the other. It seems to be an average of socialistic and capitalistic ideologies. The FM has tried to address all the sections of our society in a graceful and constructive manner by striking a lasting balance among the different forces at work in our complex society. But in the way he lost direction and the Budget has become economically non-dynamic. It is digestible but not without a stomach-ache.

— S.K. GARG, Mohali

Shows an ad-hocist mindset

P. Chidambaram’s Budget suffers not only from the inbuilt constraints, but also lacks consistency and directional vision. In fact, it is an exercise in an appeasing patchwork reflective of an ad hocist mindset.

About 64 per cent of our finance goes to earlier commitments like interest repayments, salaries, pension subsidies, defence, etc., which leave a little scope for the FM to apply a creative and visionary approach, yet one is expected to bring in reforms leading to growth and stability in the national economy, which Mr Chidambaram has failed to achieve.

He has been very emphatic in developing the backward and “neglected” states. Bihar has been given a package of Rs 3,350 crore. But what about the other “neglected” states like UP, Orissa, or even West Bengal where starvation deaths have often been reported? Likewise, Punjab too deserved an equal attention where the farmers’ indebtedness has led to many suicides.


Keep our interest in mind

At present banks/post offices give ½ per cent increase on the normal rate of interest on one to three years’ deposits by pensioners/seniors citizens, which is meagre and should be raised to at least 1½ per cent by making such a provision in the Union Budget.


A step forward

Mr P. Chidambaram has presented the current Budget in a professional manner and put the maximum attention on the poor. Tax relief for them is a remarkable step, which will benefit nearly 1.5 crore persons. He has preferred education, health, rural infrastructure, agriculture and water to the other things. The prices of farm equipment have been lowered. The promise of al least 100 days of employment is heartening. He has indeed encouraged the small-scale industries, besides promoting tourism, which will increase our national income. On the whole, the Budget is progressive and it has given India a strong base for sustainable growth, besides sending a positive signal to foreign investors. The announcements for the health sector are also in the right direction.


Raise the tax exemption limit

By raising the tax exemption cap to Rs 1 lakh, the Finance Minister has pleased only those whose total income does not exceed this limit. Those falling in the middle and higher income groups have not been given any benefits, rather the 2 per cent cess has been imposed which will increase their tax liability. The Finance Minister should have given some relief to the middle class by raising the tax exemption limit. Earlier, when the maximum exemption limit was Rs 50,000, the businessmen, who do not keep proper books of accounts, were showing their income below this level. Though their actual earnings might have been much more. Now these businessmen will show their total income up to Rs 1 lakh and escape from tax liability.


Good for the common man

It is a common man-centric Budget with few exceptions. The Accelerated Irrigation Benefit Programme, announced by the FM to reduce the dependence of farmers on the monsoon and improve the irrigation facilities, is really appreciable. This scheme should encourage farmers to adopt horticulture, floriculture and oilseed farming. Exemption in the excise duty on computers and mobile phones is also beneficial for the middle class. On the other hand, an increase in the tax on refined oil, LPG, kerosene and other household items such as clocks, watches, black and white televisions and jewellery will overburden the common man.


Monitor the implementation

Provisions for education and health care in the Budget show that high priority has been given to enhance the quality of life of the common man. The strengthening of the midday meal scheme and emphasis on education for poor and employment generation indicate that the foundation for a vibrant India has been laid. The plans are undoubtedly commendable but doubts remain on their implementation. We expect that the government will explore new methods to ensure funds meant for different plans reach the grassroots level.

— K.M. VASHISHT, New Delhi

Implement schemes

The Finance Minister has shown his pragmatic approach by giving attention to the areas concerning the common man. The primary focus in the Budget is on agriculture, rural infrastructure, water, education and health. The main gainers are farmers, salaried class, students and senior citizens. His efforts to create an environment attractive for all types of investments (public and private, domestic and foreign) in the country are praiseworthy. The government must not dilute, change or reverse its foreign investments plans under any pressure from the Left parties. In fact, the Left should now learn to adopt more liberal approach in the fast changing world. The government must also take all possible measures to ensure that benefits of the schemes actually reach the common man.

— R.R. PAUL, Ludhiana

Spare the customer

Finance Minister P. Chidambaram has added more to the hardships of the common man. Inclusion of 13 more services in the ambit of service charges such as drafts, pay orders, chequebooks, shamiana, pandals, outdoor catering, etc. will increase the expenditure to the tune of 10 per cent. The government should charge service tax from the service provider only. The service provider should not further charge it from the customer.


— Concluded —


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