Budget 2014

The more things change the more they remain the same.

NDA replaced UPA as ruling coalition in House of Peoples i.e., Lok Sabha.  BJP replaced Congress.  Narendra Modi replaced Manmohan Singh.  However the budget presented by Finance Minister Arun Jaitley on 10/7/2014 was not much different from UPA budgets.

BJP had a chance to undo the damage done by UPA over the years.  It failed.  People who voted for BJP had hopes and expectations.  Hopes were dashed.  Expectations were belied.

There was no repeal of retrospective amendment to Income Tax Act.  That was a huge letdown.  The assurance that NDA government will not bring retrospective amendments has no meaning and setting up CBDT committees to settle tax disputes due to retrospective amendment is opening doors for corruption.

Arun Jaitley did not abolish NREGA, JNURM etc.  Continuation of UPA schemes does not make sense.

Arun Jaitley should have called a press conference at 9 p.m. and answered questions instead of appearing on different channels and answering the same questions.

Fiscal deficit target should have been zero per cent instead of 4.1% for 2014-15.  There was no need to announce new IITs, IIMs, AIIMs, agricultural and horticultural universities etc.  Deficit budget means inflation will continue.

Expenditure Management Commission to look into cutting expenditures was not necessary.  People in government know where to cut expenditure.  Will is lacking.

Increase of FDI limit in defence and insurance sectors from 26% to 49% is good.  It could have been better.

Schemes like Pradhan Mantri Krishi Sinchayee Yojana, Swachh Bharat Abhiyan, Shyama Prasad Mukherji Mission, Deen Dayal Upadhyaya Gram Jyoti Yojana should be left to states, panchayats and municipalities.

Sardar Patel’s Statue of Unity was a private initiative.  There was no need to allocate 200 crore rupees to it.

Arun Jaitley has allocated 100 crore rupees each to schemes like Van Bandhu Kalyan Yojana, Village Entrepreneurship Programme, Promoting Good Governance, National Adaptation Fund etc.  Such schemes should be scrapped.

Various Rural Credit Funds should be scrapped.

There is no need for setting up Kisan TV and Arun Prabha channels.  There are enough DD channels.

Allocation of 10,000 crore rupees to MSME sector to attract private capital should be scrapped.

Government should not be promoting handloom and other products.  Leave it to private sector.

Strange is the proposal to allocate 5,000 crore rupees to set up 3P India, an institution to support PPPs in India.  Public Private Partnership means losses go to public sector, profit goes to private sector.

Let cities develop by themselves.  No need for government to spend money for smart cities.

Debt Recovery Tribunals are a good idea.  Corporates who have defaulted on loans to public sector banks should be punished.  Properties of companies and directors should be confiscated.  If debt is not recovered directors should be put in jail.  Sahara case is an example.  Banks should have a list of borrowers mentioning amount borrowed, amount paid, amount pending, defaults, on their web sites.

Issuing Kisan Vikas Patras is a bad idea.  KVP amounts are to be returned with interest.  That leads to more printing of notes and more inflation.

Government money should not be spent on sports.  Government has no control over Indian Olympic Association and various sports associations.  They are a law unto themselves.  USA government does not spend money on sports and USA is mostly No. 1 in Olympic medals.

Cess, surcharge, levy etc. continue.  What happened to education cess collected over the years?  Who benefitted?

Why investment allowance of 15% to manufacturing firms that invest 25 crore rupees annually?

Some (radio taxi providers etc.) have come under Service Tax.  Some (cotton transporters etc.) are out of Service Tax.

Excise Duty has gone up on some items, come down on some items.  Increasing Excise Duty on cigarettes and tobacco products is a good idea.

Divestment proposals are said to be in annexures.  We will know when they are implemented.

Narendra Modi spoke of bitter pill.  Arun Jaitley spoke against mindless populism.  This budget is bitter pill for some, sweet pill for some, no pill for others.  It is more mindless populism than of Sonia Gandhi.

Reactions to budget are predictable.  BJP and allies have praised the budget.  Other parties have not said anything good about the budget.