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Union Budget 2017-18, an appraisal!

In a highly startling move and typical of Prime Minister Narendra Modi’s one man NDA Government out to disrupt the well established social and economic norms, recent instance being demonetizations of high denomination notes that destabilized socio-economic activities of people of India having lined them up helplessly before ATMs and banks to withdraw their own money ostensibly to cleanse the national economy of black money operations (parallel economy) and rendering poor, farmers, labourers unemployed, small and medium industry closed down under the cover of ultra nationalism, exemption to donations to religious and charitable organizations from income tax has been withdrawn in the Union Budget 2017-18, which our motivated media failed to notice in this era of paid and fake news.
The Union Budget 2017-18, presented in the Parliament on February 1, 2017, has quietly inserted a clause in the Income Tax Act, 1961 withdrawing the benefits of exemption from tax for donations to charitable, religious institutions etc under Section 80G of the Act. It impacts the donors, mostly business class, who use their black money to donate. This has all pervasive implications as it impacts all sections of people irrespective of their castes, religions, communities and sexes. This implies that revenue to such institutions will dry except the piecemeal donations in small cash by the faithful. It also means there will be large scale unemployment of priests, clergies and pontiffs across the country. This will affect the majority community more than others. It’s implications can’t be dismissed as India is a deeply religious country.
This move is intended to take on televangelist Zakir Naik and NGOs of his ilk of a particular community. Any such action has to be in keeping with the constitutional postulates of equality, justice and fair-play. As the people already know that such rebel rousers or hydra headed elements are there in all religious groups and communities. In such circumstances, individuals of a particular community or religions cannot be singled out for any ill-conceived partisan action. This move is also intended to disrupt religious sentiments of the people at large.
The size of Government outlay including allocation for States from divisible pool of income has been fixed at Rs. 21.46 lakh crore in the budget 2017-18 against revised Government expenditure of Rs.20.14 lakh crore in the current fiscal 2016-17. Expenditure on public welfare has been pegged at Rs. 9.45 lakh crore. According to the Government, 43 of 107 budget proposals in 2016-17, the current fiscal as on January 31, 2017 have been implemented.
However, the budget faces hard reality of emerging economic protectionism from the developed world led by the USA under the Trump Administration, rising crude oil prices, international geo-political concerns and jobless economic growth that may impact Indian economy. The budget pushes for rural development and infrastructure. But there is no real push for job creation. This, in deed, has a potential to raise social tension in the country. This together with President Trump’s stance, impending job loss in IT based service sectors is looming large to disrupt Indian economy. Added to this, likely rise in US interest rates will impact the economics of FDI world wide, especially the emerging economies like India. It is rightly said, if America sneezes the rest of the world catches cold.
On paper, budget is all goody, goody as it provides something for every body. But as always, much will depend on implementation and navigating global shocks that are in store. The budget also attempts a radical cleansing of the economy, necessary for India to get on to a robust growth path with macro-economic stability. But the budget is silent on rampant wholesale corruption in the system, which has been eating into the vitals of national economy. There is nothing to hint at removal of corruption through amendment of Article 311 of the Constitution of India linking performance of bureaucrats to continuance in public services, removal of its discretionary power and making public services accountable for transparency in the system. Without such measures, demonetisation and other claims of the NDA Government is hollow. In addition, a law of torts (negligence) as in developed nations needs to be enacted to make all sections of society and diverse professionals accountable to the people.
The current fiscal 2016-17 could be seen as the year where several game changing initiatives like the passage of the constitutional amendment bill for GST and Bankruptcy Code would be in shape. Notwithstanding demonetisation, Indian economy stands at the cusp of a perceptible change to a unified tax regime of GST along with a thrust on greater cash accountability and digitization across payment channels. However, security of money in the evolving cashless economy is in jeopardy without adequate safeguards. Cashless economy in India is not workable for a large segments of people despite hypes by the NDA Union Government.
It is germane to mention here that all Centrally Sponsored Programmes are implemented by the State Governments, where massive leakages through collusive culture of corruption are rampant in delivery, completion of projects and their utilization certificates. The only good thing is ADHAAR based direct benefit transfer to individual subsidy beneficiaries to their bank accounts, which to a great extent prevents leakages. For this, the credit goes to the UPA Government of Man Mohan Singh. The budget is silent on removal of corruption in implementation of Centrally Sponsored Schemes by the State Government.
Measures announced in the budget to create transparency and end corruption in the political economy of political parties is not workable. It will only increase clerical works and there will be 50 vouchers for every one lakh donations against five such vouchers for the same amount, so far. It is apparently an eye-wash and designed to hoodwink the people. Political parties will always innovate ingenious methods on their funding. Challenges of implementation cannot be met effectively, unless Prime Minister Modi takes bold measures, as already enumerated, to curb corruption and end black money generation and creation of parallel economy!

- By M.Y.Siddiqui

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