Predictably Finance Minister P. Chidambaram's Union Budget 2013-14 has evoked mixed reactions.
However, if one takes a close look at what the Finance Minister has done, it becomes clear even to the lay observer as to who he has tried to placate. True, he has imposed a 10 per cent surcharge on income tax for crorepatis as also domestic and foreign firms with taxable income above Rs 10 crores, besides increasing exise duty on SUVs, duty on imported automobiles and yachts. He has also observed: “When I need to raise resources, who can I go to except those who are relatively well placed in society?” In the same breath Chidambaram has sought to soften the move to enhance income tax on those making Rs 1 crore per annum by saying: “There is a little bit of Mr Azim Premji in every affluent taxpayer.”
Yet in effect the affluent persons have been given far more concessions than whatever they have been made to pay—the effect of the tax increase has not only been negligible but far less than one could have imagined. What then is the entire exercise other than an eye-wash? But even this is unacceptable to the corporates. This only shows the clout the latter have managed to acquire in the prevailing neo-liberal environment.
As for the Nirbhaya Fund for women's security and empowerment and the country's first women's bank, these only reveal the lip-service to social causes on the part of the ruling coalition, as has been aptly underlined by several activists of the women's movement.
Commentators have called the Union Budget a neat ‘balancing act' in view of the impending elections next year. The same was visible in Railway Minister Pawan Kumar Bansal's Railway Budget. Reservation, tatkal and cancellation fees were sharply raised (besides the passenger fare hikes effected last month) and freight rates increased by almost six per cent across-the-board. Posh coaches and upgraded services were also promised at a price. The freight hike is bound to impact industries like steel, cement and coal and result in marginal increase in power prices. But the proposal that Rs 1 lakh crore of the total Rs 5.2 lakh crore investments be mobilised through the PPP route is a sop to the private sector. The industry is also expecting these steps to pave the way for privati-sation based on latest technology.
This being the real thrust of the UPA Govern-ment's strategy in the pre-election year, won't the aam aadmi actually lose out despite all the pro-people rhetoric in the Budget speeches?
February 28 S.C.