WITH EYES WIDE OPEN
D. N. Bezboruah
India’s annual budget, which is generally presented on the last day of February, but was presented 27 days earlier this year, has never ceased to fascite and astound me every year. We are all familiar with family budgets that are either prepared meticulously or done on the back of a used envelope every month. More often than not, one fails to make the ends of even a family budget meet. There has to be pruning of certain expenses every month when unexpected but uvoidable items of spending rear their ugly heads. These cuts and compromises can be seldom carried out without hurting the feelings of someone in the family, and the sad part of the business is that even children cannot always be spared the pain of broken promises when major unexpected expenses come up to play havoc with what was promised to them “next month”.
For someone who has not had to count the pennies or bother too much about budgets, the tiol budget is something to wonder at. In the first place, it is not a budget for just a family of five or ten persons. It is a budget for a tion of over 121 crore people with diversity being the key component. It is a budget that must cater to all the needs and aspirations of 121 crore people. It must have plans for their food, shelter, health care and education and mage to create some employment opportunities for a tion that is adding one Australia to its population every year. The Fince Minister of India and his team must do all this often in the teeth of severe criticism of the Opposition in Parliament. And having done everything necessary to present a sensible and viable budget, the government must also do everything needed to implement the provisions of that budget. It must also keep a close watch on the immediate and long-term effects of the budget provisions on the people and introduce corrective measures as and when needed. The size of India’s budget and the variables that have to be taken care of should be enough to impress anyone with the enormity and complexity of this yearly task.
Budget 2017 is different from other budgets because each year’s budget is different from the budgets that have gone before it in several ways. But three significant differences of Budget 2017 stand out prominently. One is that Budget 2017 subsumes the Railway Budget that has always been presented separately so far. Budget 2017 will be followed almost immediately by general elections in five States of the Union. The latest Budget has had to keep this in mind. Filly, this Budget comes close on the heels of the demonetization of high denomition currency notes that was initiated on 8 November 2016 and has had more than its due share of criticism.
One cannot think of any other country where the budget gets as much importance as it does in India. For a couple of weeks before the presentation of the budget there is speculation in the media about what the salient features of the budget are likely to be. Once the budget is presented there is an ever-growing number of ‘expert-speak’ programmes and alyses of the budget that begin even as the budget speech by the Fince Minister is being delivered. The time devoted to the ‘expert-speak’ programmes and the intensity of the expert alyses and comments continue for a few days after the presentation of the budget.
It is normal for the Opposition to be critical of the annual budget. This time the criticism of the budget by the Opposition has been even more severe because of the demonetization of high denomition currency notes. The reason for this is not far to seek. Almost all fincial transactions of political parties are in cash. One cannot envisage political parties of India making payments by cheque or with plastic money. The demonetization of high denomition currency notes turned the hoards of such currency notes with political parties into waste paper almost overnight. This accounts for the screaming (post-demonetization) in the Trimool Congress and the Indian tiol Congress against demonetization and the demand for rendra Modi’s removal. Both political parties lost hundreds of crores of rupees since 8 November 2016. They could not possibly have deposited such huge sums of uccounted cash in bank accounts within the due date because of the legitimate questions that would have been raised about the source of the cash. There is little to complain about Budget 2017. It is a low-key, conservative with the right stress on the rural sector and on developing the infrastructure. And what has made most people happy is the reduction of income tax, a ban on cash payments in excess of Rs 3 lakh and the ceiling of cash dotions to political parties being fixed at Rs 2,000.
Any discussion of the latest Budget must give due importance to numbers. Perhaps the most important number is that of the number of income-tax payers in India. In this country of 121 crore souls, the number of income-tax payers is a mere 2.71 crore or 2.24 per cent of the population. Let us search for any civilized democracy where only 2.24 per cent of the population pays income-tax. We shall probably fail to find another democracy where only a little more than two per cent of the population pay income-tax. In fact, the most visible indicator of prosperity anywhere in the world is a high percentage of income-tax payers. And if too many people in India who legitimately belong to the income-tax paying fraternity had not evaded income-tax, we would have had a much richer tion with at least 20 per cent of the population paying income-tax. Like many different kinds of business and political activities that are carried out almost entirely in cash alone, we also have several service and catering organizations that have almost always worked for cash alone. They would not even have a proper idea of how to convert fincial transactions entirely to credit and debit cards and to use their cell phones as electronic wallets for instant payments. A sizeable section of our population (including educated people) are not yet familiar with how electronic wallets and other altertive and painless means of making payments are to be used. There is need for educating even the urban population on how these altertive means of making instant cashless payments are to be used.
As I said earlier, many of the figures churned out or referred to in the budget are very important for understanding how the tion’s economy is affected by the budget and how many of the answers about the future of our economy that we are looking for can be found in the budget proposals. Take, for instance the Fince Minister’s statement that we are a tion of “low earners”. This is very true on paper. There are only 3.7 crore people who filed tax returns in 2015-16 but only 2.71 crore (2.24 per cent of the population) who actually paid income tax. There are 99 lakh people whose income is below the exemption limit. There are 1.95 crore people whose income is between Rs 2.5 lakh and Rs 5 lakh a year. There are 52 lakh people whose annual income is between Rs 5 lakh and Rs 10 lakh a year. People with an income of above Rs 10 lakh a year number 24 lakh, and there are just 1.72 lakh people whose annual income exceeds Rs 50 lakh. Such data are obviously compiled in more than one straightforward way. Even so, much of the data must have been compiled by tax officials from information filed by the very people concerned. What if a majority of the people have chosen to turn themselves into “low earners” by providing incorrect and misleading data about themselves? The very fact of India having only 2.71 crore people (2.24 per cent of the population) who actually pay income-tax is difficult to reconcile with the statement of 1.25 crore of our “low earners” being able to buy cars during the last five years or 2 crore of them being able to travel abroad. Once we try reconcile some of the data about the people and their earnings, we shall begin to see that most people in India make unreliable and irresponsible statements about their incomes and various other persol details that are important to the Fince Ministry to come up with the kind of budget that can really be expected to cater to the greatest good of the greatest number instead of remaining some kind of an annual ritual mainly due to distorted facts about the people, their lives, their earnings and their aspirations.