Politics-dictated economics

Reading the 97th Para of his 117-Para 32-page Budget speech the Finance Minister said that the state government has decided to introduce tax at the rate of five per cent on sugar and textile with effect from April one,2012,but before he concluded his speech Chatha announced deletion of the Para.

Earlier Chatha said “that all states had unanimously decided to impose VAT at the rate of 5% on sugar and textile as these items had been taken out from the list of goods on which additional excise duty was leviable by the Central Government. In line with this decision,the state government has decided to introduce tax at the rate of 5% on sugar and textile w.e.f. 01.04.2012. However,there will be no tax on khadi which has already been exempted by the government.”

But later this Para was announced to be dropped.

The one-and-a-half hour long speech,marked by an INLD walk out in the beginning though on a different reason,and interrupted by the opposition benches,bears out the time tested adage that politics dictates economics. Maybe for this reason,the finance minister forgot about the incomplete Satluj Yamuna Link Canal that required budget for its maintenance. It could be the realisation of the fact that the repair and maintenance only cause expenditure.

Innovativeness,which have marked some of the policies and programmes of the Hooda government,were conspicuous by their absence in the budget. What puzzles is the fact that the elections being still two years away,why could the government not muster the nerve to impose taxes to make good the deficit that touched a whopping Rs 2,455.53 crore and Rs 7,596.82 on fiscal front.

Finance Minister Harmohinder Singh Chatha tried to seek refuge of higher salary bill that constituted 30 per cent of expenditure to justify higher deficit figure but fact remains that the state was revenue surplus from 2005-2008.

Ask them and pat comes the reply,“But due to the slow-down in economy and pay/pension revision impact brought the state in revenue deficit zone.”