With reference to the report, "Sinha spells out four pillars of Budget '16" (December 2), the finance ministry's move to infuse credibility in the Budget exercise by being more transparent is most welcome.
The focus on social security, agriculture, employment generation and improvement in tax structure in that order is a commendable improvement on the part of the ministry. Simultaneously, the government needs to evolve a prudent asset-liability management approach in handling its finances. The take-as-it-comes approach to revenue and the pay-as-you-go approach to expenditure - a legacy of pre-Independence governments - need to be revisited.
Economic development alone cannot sustain long-term social security for the people. Through the Budget, the government gets an opportunity to make corrections in the financial planning exercise every year, but this will be effective only if there is a will to use it for that purpose. This is evident from Minister of State for Finance Jayant Sinha's statement.
Every year, the Economic Survey, presented just before the Budget, gives an overview of developments affecting the basic features of economic growth and, therefore, has implications for subsequent financial management. This year, the government could consider presenting a paper giving indicative information on the resources that can be tapped for mobilisation of funds and when it plans to deploy them.
One of these resources is agriculture income, which enjoys tax concessions. The other resource is tax waivers, including those that were extended to corporations in the last five to 10 years and the benefits derived from them. An attempt should be made to make beneficiaries give back to the exchequer a portion of the benefits they derived from such concessions. Although this may be taking place already - through employment generation, reduction in exports etc - there are no transparent and meaningful analyses in these areas.
Real estate is another grey area. States and local self-government authorities could consider creating an inventory of unutilised built-up areas, residential as well as commercial. A nominal tax on unused/unsold buildings and commercial spaces could then be proposed by them.
M G Warrier, Mumbai
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
