oppn parties A Different Union Budget This Year?

News Snippets

  • For the first time in history, Darjeeling loses first flush tea due to suspension of garden work for Covid-19 outbreak
  • Supreme Court asks journalists to be responsible and publish only the official version of news after it was brought to its notice that migrant exodus started after the 'fake' news that the lockdown will be extended to three months
  • Small saving rates slashed by the government by 140 basis points
  • The Centre says that the exodus of the migrants was stopped to save villages and prevent community transmission
  • The Centre says March 31 will remain the closing date for FY 2019-2020 and no change will be made for Covid-19 disruption
  • Tablighi Jamaat fiasco puts several states on high alert, attendees and their contacts being traced
  • Stock markets recover on the last day of the financial year, but the sentiment remains weak
  • The government says Covid-19 is still in local transmission stage in India
  • Government scotches rumours of extending the lockdown beyond April14. Says no such plan
  • Centre asks states to give shelter and food to migrant workers to stop them from taking to the streets
  • RBI cuts repo rate by 75 bps, the steepest in 10 years
  • Centre writes to states regarding laxity in monitoring people who had arrived from abroad between January and March
  • Kerala reports a spurt in new cases
  • With 124 fresh cases on Friday, the number of reported cases in India stand at 854
  • Five of a family, including a 9-month-old-baby test positive for Covid-19 in Nadia district in West Bengal on Friday
Total count stands ar 3082 as India records 16 Covid-19 deaths, the highest in a single day
oppn parties
A Different Union Budget This Year?

By Sunil Garodia
First publised on 2017-12-27 08:51:14

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
The 2018 general budget will be absolutely different from what Indians are used to. This is because of a host of factors. The first and foremost factor is the introduction of Goods and Services Tax (GST). Since GST is based on the spirit of federal cooperation, is governed entirely by the GST Council (headed by the Finance Minister) and has subsumed a wide array of taxes, the need for the finance minister to go into the nitty-gritty of excise and service tax levies and tinker with them as per representations by various interest groups and chambers is no longer there.

The second most important factor is the doing away of the separate railway budget and subsuming it in the general budget. Since other departments, like defence for instance, have allocations far exceeding that of the railways and are yet part of the general budget, there was no need to have a separate railway budget. There is no point in the railway minister requisitioning funds from the finance ministry and then allocating them. From now onwards, the allocation and use of funds would be spelled out in the general budget itself.

Finally, with the Planning Commission not in existence anymore, the difference between Plan and non-Plan expenditure has also vanished. Expenditure will henceforth be classified as revenue and capital, as is the stated norm in accounting procedure. It makes sense as a lot of non-Plan expenditure was disguised as Plan expenditure to escape overspending scrutiny. Now, if revenue expenditure is substantially higher than earnings, it will immediately expose the government as living beyond its means. Further, capital expenditure on various schemes will nail the government if it chooses to ignore social sector spending.

Ideally, since the time consuming details of excise and service tax are omitted, the budget speech should be short. But this year being the last when Arun Jaitley will present his full budget and the expectation that this budget will be farm-oriented, there is a huge chance that the man will play to the gallery and announce grandiose schemes, ostensibly to benefit the farmers but in reality to try and win back their votes. But both Mr Jaitley and the government should realize that unless a marketing chain for agricultural produce that eliminates unscrupulous middlemen and opportunistic traders is put in place and unless farm credit is not mostly dependant on usurious private moneylenders, the farmersÂ’ lot is not going to improve. Tough administrative measures are needed for the farm sector, not budgetary sops alone.