Voice from the Rooftop

Blog of Vincent Augustine D'Souza

Budget 2017

On 1/2/2017 Finance Minister Arun Jaitley presented budget for 2017-18. It is the first time budget was presented on 1 February. This time Railway Budget was incorporated into budget. Opposition parties wanted postponement of budget due to elections in UP, Punjab, Manipur, Goa and Uttarakhand. Government did not agree. The matter went to Supreme Court. Supreme Court upheld government’s decision to present budget on 1 February. On 31/1/2017 E. Ahamed, MP and former member, collapsed and taken to hospital. Congress wanted postponement of budget by a day because a sitting member of Lok Sabha had died. BJP said in 1974 when an MP died budget was presented as scheduled. Sumitra Mahajan said budget will go ahead and 2/2/2017 will be a holiday. If Congress members wanted a holiday they should have walked out after obituary reference.
Expected expenditure for 2017-18 is 21 lakh crore rupees. Cash in India as on 8/11/2016 when demonetisation was announced which proved to be a disaster was 18 lakh crore rupees. Expected expenditure is 3 lakh crore rupees more than that. There is still limit of 24,000 rupees on withdrawal from savings bank accounts. Things were supposed to be normal by 30/12/2016. It is not normal even after one month after that date. Election Commission wanted RBI to lift withdrawal limit from savings bank accounts to enable candidates to pay in cash. RBI withdrew limit on current accounts. If candidates want to withdraw 28 lakh rupees or so during election time they have to open current accounts.
There is reduction of Income Tax from 10% to 5% in 2.5 – 5 lakh rupees category and 12,500 rupees for income above 5 lakh rupees. There is 10% surcharge for income between 50 lakh and 1 crore rupees. There is some tinkering in direct and indirect tax rates.
Donations above 2,000 rupees to political parties have to be in cheque or digital. It was anonymous donations up to 20,000 rupees which is brought down ostensibly to ensure accountability and transparency. In reality anonymous donations up to 2,000 rupees is a loophole which political parties will exploit. BJP has not gone cashless and digital in accepting donations. Ban on anonymous donations to political parties, audit of accounts of political parties by CAG and bringing political parties under RTI are necessary to curb black money in politics.
Sensex went up 485 points. Usually if Sensex goes up during Budget Day it comes down during succeeding days and vice versa.
Ban on cash transactions above 3 lakh rupees is proposed. It remains to be seen how far the ban will be successful.
Cash donation to charitable trusts is limited to 2,000 rupees.
Abolition of Foreign Investment Promotion Board is good.
More than half of Modi government’s term is over. There were great expectations when he became PM. Not much changed under him. Things are worse in recovery of bank loans. MNREGA continues and more money is given to it. Schemes with freebies and subsidies continue and more get added. Current account deficit, fiscal deficit, and revenue deficit continue. Rupee has depreciated more. India is just four ranks up in ease of doing business. Credit rating has not changed much. This year in Davos there was no talk of India. There is not much difference between Congress budgets and BJP budgets. If Modi thought he had ten years he was mistaken. Victory in elections is not to be taken for granted.

Kingfisher arrests

One criticism against Barack Obama was that nobody went to jail for frauds that caused depression of 2008. In India at least some people went to jail for causing loss to a public sector bank.
On 23/1/2017 CBI arrested nine persons; four were former officials of IDBI Bank. They were Chairman Yogesh Aggarwal, Deputy Managing Director O. V. Bundelu, Executive Director S. K. Srinivasan, and General Manager R. S. Sridhar. Also arrested was present Deputy Managing Director S. K. Batra. Other four were former officials of Kingfisher Airlines. They were Chief Financial Officer A. Raghunathan, Assistant Vice President Shailesh Borkar, Senior Manager (Accounts) A. C. Shah, and Deputy General Manager Amit Nadkarni. In 2009 IDBI Bank had given loan of 900 crore rupees to Kingfisher Airlines when the company had declared a loss of 1,600 crore rupees. The company had BB rating which showed it was risky to give loan but the bank gave the loan. Of the 900 crore rupees, 262 crore rupees were diverted for personal use, 422 crore rupees went to offshore accounts.
On 24/1/2017 CBI filed a charge sheet against Vijay Mallya and others. Vijay Mallya owned Kingfisher Airlines. The charges are criminal conspiracy, cheating and corruption. Vijay Mallya is absconding. He was allowed to flee. The court sent others to judicial custody till 7/2/2017.
Kingfisher owes money to State Bank of India, Punjab National Bank, IDBI Bank, Bank of India, Bank of Baroda, United Bank of India, Central Bank of India, UCO Bank, Corporation Bank, State Bank of Mysore, Indian Overseas Bank, Federal Bank, Punjab and Sind Bank, Axis Bank, and some other banks. State Bank of India had lent 1,600 crore rupees to KA.
The arrests of bank and company officials are significant. Bank officials have to be careful about lending. Company officials have to be careful about borrowing. Many companies take loans and default. The loans are written off. Under Modi government things have become worse. Names of defaulters and cases of corporate debt restructuring and strategic debt restructuring should be made public.
Auction of Kingfisher properties has not been successful. There were no takers at reserve price. For long there were adjournments in Debt Recovery Tribunals.
There are no discussions on TV channels about Kingfisher arrests. This is a matter of importance. Silly statements are given publicity. People who have money in the bank are unable to withdraw the amount they want. The Committee of Chief Ministers on Digital Payments headed by Chandrababu Naidu has suggested reintroduction of banking cash transaction tax on withdrawals of over 50,000 rupees. That should not happen. People should not have to pay tax for withdrawing their money from the bank.

Trump is President

On 20/1/2017 at noon local time, 10.30 p.m. Indian Standard Time, Donald John Trump became the President of USA. Voting was on 8/11/2016 and on 9/11/2016 Trump had enough Electoral College votes to be President. The matter should have rested there but enemies of Trump were not giving up. They tried other means to stop him becoming President.
Protests against Trump erupted in many cities. The protesters shouted “Not my President”. Some protesters engaged in vandalism and arson. They went on for some days and nights. Some said George Soros was behind those protests.
On 23/11/2016 Green Party candidate Jill Stein started a campaign for recount in Michigan, Pennsylvania and Wisconsin. Trump had won in those states. Recount of votes would not have made a difference to Jill Stein. She would not have got the Electoral College votes of those votes. Hillary Clinton would have been the beneficiary. Democrats contributed to Jill Stein’s campaign. Jill Stein filed for a recount in Wisconsin on 25/11/2016, in Pennsylvania on 28/11/2016, and in Michigan on 30/11/2016. Trump campaign moved courts against recount. On 7/12/2016 Judge Mark Goldsmith stopped recount in Michigan. On 12/12/2016 Judge Paul Diamond dismissed petition for recount in Pennsylvania. In Wisconsin recount took place and Trump got more votes. Pennsylvania had 20 Electoral College votes, Michigan 16, and Wisconsin 10. Trump had 306 EC votes, Hillary Clinton 232.
Trump’s enemies now asked Republican Electors not to vote for Trump. They said “I am not asking you to vote for Hillary Clinton.” Not voting for Trump meant Hillary Clinton will benefit. Some wanted Electors to vote according to their conscience. Voting was on 19/12/2016. Trump’s enemies were successful in getting two Republican Electors not to vote for Trump. They were from Texas. Chris Suprun voted for John Kasich. Bill Greene voted for Ron Paul. Trump got 304 EC votes out of 306, 34 more than required 270.
Hillary Clinton’s loss was more. She lost five EC votes of Democratic Electors. In Washington State, Levi Guerra, Esther John, Bret Chiafalo voted for Colin Powell and Robert Satiacum voted for Faith Spotted Eagle. In Hawaii, David Mulinix voted for Bernie Sanders. She would have lost three more votes, one each in Colorado, Minnesota, and Maine. The votes were declared invalid. In Colorado and Minnesota alternate Electors voted for Hillary. In Maine the Elector subsequently voted for Hillary.
After that there were attempts to discredit Trump victory. Obama said if he had contested he could have won. It was an unnecessary statement. There is no provision for third term for President of USA. Trump replied he had won in states where Obama had aggressively campaigned against him.
Most channels continued to be against Trump. Trump got annoyed with CNN and did not allow its correspondent to raise a question during a press conference. He called CNN fake news.
Trump has spoken against Boeing and Lockheed Martin for excessive profit and cost overrun. Companies which made easy profit from government money are unhappy with Trump.
Trump’s inaugural speech was short compared to speeches of other presidents. His inaugural speech was similar to his campaign speeches. He spoke against Washington elite and politicians who are all talk and no action. He ended with his slogan Make America Great Again.
Trump wants American companies to manufacture in USA. He has talked of 35% tariff on goods manufactured outside USA. His slogan is Buy American, Hire American. It reminds of the slogan Be Indian, Buy Indian, which was prevalent many years back. Now there is talk of Make in India. Many Indians fear that getting H1-B and L1 visas will be difficult.

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