The Indian Budget Is On The Wrong Track

Budget follows the beaten path and cannot alleviate poverty

The Indian budget just taxes 0.5% of the population creating a situation where O.5% in a population of 1200 million supported entire India

The Finance bill was steered by the Finance minister Arun Jaitley through the Lok Sabha a few days back.It was an exercise that brought forward comments like " Good budget" and similar words.But what is this budget about.A deeper study will show the premises on which the budget is based to be seriously flawed. Many economists have commented on this aspect of the budget.

Asa start, one must understand that India is a poor country and the per capita income is among the lowest in the world.There is widespread poverty and most economists feel this budget will not kick start the attack on poverty which as per conservative estimates is almost 60% of the entire population.

The FM himself has agreed that only0.5%of the population pays tax and the remaining 99.5% are supported by this 0.5%.

It defies logic to keep taxing this 0.5% to the exclusion of millions more.One aspect that needs immediate rectification is the exemption of Agricultural income from tax.Farmers in Punjab, Haryana, western UP and the sugar belt of Maharashtra are awfully rich, yet by continuing to treat agricultural income as tax-free an entire Pandora's box is opened up.

The tax which is income based needs to be re-oriented to expenditure based.This is a major change as an expenditure-based tax will take into the net all those who have the capacity to spend.It will also widen the net.Personal Income tax is not the norm for a developing country where the main burden of paying taxes is only for the salaried class.Giving sops like an IT limit of Rs 3 lakh defeats any rationale.

There is also a case for lowering taxes and the service tax that in real terms herald inflation must go.It increases the price of goods in an economy that is deprived.The burden for this is again to the entire population including those living below the poverty line.How the FM and the BJP laud this tax which is rising every day beats imagination.

The budget has followed the beaten track.One must realize that to kick start a dormant economy it is important that more goods are available at a cheaper price.With high Octroi, excise and other taxes this aspect of supply and manufacture is not looked at all.The budget of Jaitley has missed an excellent chance of leading India forward.this is sad and the salaried class will continue to be exploited.99.5% of the population will continue to ride on the back of the 0.5%.This does not happen anywhere else.

 

Post Your Comment