An 11-Point Agenda for the
Union Budget
18 January 2018
Weighed down by internal
pressures from the party to present a Budget that gets accolades from a large
voter constituency in the face of General Elections 2019, Finance Minister Arun
Jaitley, has a few ready options to pep up the economy.
1. Go all out to clear the
misgivings on the Financial Resolution and Deposit Insurance (FRDI) Bill by
incorporating oral assurances given in the Parliament into the proposed Bill.
2. Announce a winding up
plan for the sinking PSBs instead of piling them on to those that are working
efficiently.
3. Insist on all the banks
to stick to banking work instead of selling third party products that carry
hefty commissions as these products are invariably dumping unknown and
unannounced risks on the unsuspecting users. Restart development banks to
finance Infrastructure. Turn banks into growth engines.
4. Announce withdrawal of
government funded programmes that failed to take off or made only a symbolic
entry. Over 110 schemes launched for the Micro, Small & Medium Enterprises
(MSMEs) failed to reach even 0.5% of the eligible enterprises. These resources
can be earmarked to finance those schemes that showed performance.
5. Re-engineer financial
incentives to go online only with appropriate safeguards also announced. Fiscal
incentives have more transparency than financial incentives.
6. Scrap all the cess hat
have no specific account of expenditure earmarked for them.
7. Appoint a committee to
amend the treasury code with its rules formulated during the British Raj. This
is the root cause of corruption and delays in the release of funds for
government expenditure.
8. Announce the date for
incorporating the related Rules whenever the Parliament passes a particular
Bill, so as to remove ambiguity and ensure compliance. Every Act must have
priority do-ables for all the stakeholders as an Abstract.
9. Introduce a modicum of
agricultural tax, with a threshold of income over Rs25 lakh per annum. All the
small and marginal farmers, as well as tenant farmers will be exempt as they
would have not earned this much even for a five year period. The rate for them
can be 10% over the Rs25 lakhs. Multiple slabs need not exist for them.
10. Manufacturing start ups
should be tax exempt for five years or till their turnover crosses Rs2 crore.
11. All corporations
spending a minimum of 5% on research and development or incubation centres
recognised by the governments shall be exempt for such spend, treating it as
Investment.
The FM would do well to make
specific allocations for agriculture, education and social services that make
good sense not just from the viewpoint of electoral benefits but as overall
economic benefits. It is obvious that the Fiscal Responsibility and Budget
Management Act, 2003 (FRBM) will be thrown overboard but for some jugglery with
numbers. There are a few states like Telangana, AP and Karnataka that have
introduced agricultural budgets. It will be necessary for the Union government
to go in sync with the states in its ideal of cooperative federalism to ensure
the outcomes.
(The author is Adviser,
Telangana Industrial Health Clinic, Government of Telangana. Views in this
article are personal.)
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