Union finance Minister Pranab Mukherjee arrives at Parliament to present the budget 2012-13, in New Delhi. PTI Photo by Shahbaz Khan
Meira Kumar, P Chidambaram and LK Advani listen to Pranab Mukherjee present Budget 2012-13.
Industrialists watching Union finance minister Pranab Mukherjee presenting the annual Budget 2012-13, on the screens at CII in New Delhi. PTI Photo by Kamal Singh
TV combo grab shows Union finance Minsiter Pranab Mukherjee presenting General Budget 2012-13, as Speaker Meira Kumar tries to quieten protesting members in Lok Sabha on ...
TV grab shows Congress party general secretary Rahul Gandhi listening to the Budget speech of Union finance minister Pranab Mukherjee in Lok Sabha. Agencies
TV grab shows Lok Sabha members listening to the budget speech of finance minister Pranab Mukherjee in New Delhi. Agencies
A sniffer dog is used to secure sacks of financial papers related to the budget at the Indian Parliament hours before the Indian budget is ...
Workers carry sacks of financial papers related to the budget at the Indian Parliament hours before the Indian budget is presented, in New Delhi. Finance ...
Finance minister Pranab Mukherjee poses for the media in parliament prior to presenting the national budget in New Delhi. Government was due to deliver its budget ...
FM Pranab Mukherjee presents Budget 2012-13 as Prime Minister Manmohan Singh looks on.
Departing from the familiar references to Kautilya's Arthasastra, the finance minister, in his budget speech, quoted from the 'immortal' Shakespeare's Hamlet "I must be cruel only to be kind". The FM did not but Shakespeare continued: "Thus bad begins …" Indeed, it does with this budget.
This so-called aam admi government has presented a budget for the khas admi. Direct taxes have been reduced by Rs 4,500 crore while indirect taxes have been hiked by Rs 45,940 crore. Direct tax concessions benefit the rich while indirect taxes burden the working people.
The aam admi is subjected to a double whammy as indirect taxes hikes also contribute to the inflationary spiral directly.
Virtually turning a blind eye to the continuing global economic crisis, this budget has given significant concessions to international finance capital by reducing the security transactions tax as well as on external commercial borrowing by Indian corporates. This will only feed further speculation and make India more vulnerable.
These measures are being undertaken under the wrong assumption that the flow of foreign finances will bolster our situation.
The total fiscal deficit now stands at Rs 5,21,980 crore or 5.9 per cent of GDP. The budget documents show that in the same year, the total tax revenue foregone (i.e., voluntarily not collected by the government) amounts to Rs 5,29,432 crore.
This is nearly Rs 8,000 crore more than the entire fiscal deficit. If these legitimate amounts were, instead, collected, then there would be no fiscal deficit at all.
Internationally, a 3 per cent fiscal deficit is considered healthy. This works out to over Rs 2.5 lakh crore, given our current GDP.
If legitimate taxes were collected, instead of doling out concessions to India Inc and the rich, we could have generated huge additional employment. This would have been in the interests of the aam admi.
Yechury is a politburo member, Communist Party of India (Marxist)