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Journalism of Courage
NEW DELHI, MARCH 25: Finance minister Yashwant Sinha, who managed to only partly do away with traditional budgetary sub rosa, was comparatively more successful in putting a halt to the deluge of post-budget memoranda.
Top sources in the finance ministry pointed out that unlike the past years when the ministry used to be flooded by the representations from the industry after the presentation of the budget, this time there were virtually no post-budget memorandum seeking changes in either excise or customs duty rates. "In fact we are eagerly waiting for them," an official quipped
Also at the same, officials pointed out, there was no rush of appointment-seekers to explain their points of view to the ministry and lobby for tempering with duty rates on goods which either they manufacture or those which reduces their competitiveness.
It was explained that this had become possible partly on account of removing the veil of secrecy about the budget making process and mainly on account of "careful crafting of thetax proposals". What was more significant, claimed top ministry officials, was the fact that the budget which imposes about Rs 9000 crore of additional taxes was not attracting representations.
Earlier, the officials said, the interest groups, in a last ditch effort, used to lobby hard after the budget presentation to seek reliefs for themselves or to mar the prospects for their rivals. The whole exercise of lobbying and counter-lobbying has been rendered irrelevant with the rationalisation of the indirect tax structure, claimed officials.
Finance minister Sinha, it may be recalled, started the process of rationalisation of the indirect tax structure, especially in case of excise, by making his intentions clear at a meeting with the Federation of Indian Chambers of Commerce and Industry (FICCI) much before the budget. While presenting his budget on February 27, he proved the prophets of doom wrong by actually coming out with three excise slabs for mean, merit and demerit goods. However, he managed to keepthe revenue in tact by imposing additional duties which might be slashed at some later point of time. Similarly, in case of customs, he was successful in keeping the both Swadeshi and Videshi lobby contented if not happy.
The officials admit that the only sore point with the industry was the 10 per cent surcharge on taxes. For obvious reasons, they said, the industry would want the surcharge to go. Historically, the surcharges have been notorious for continuing beyond the stipulated time-frame. Like in the past, this time too 10 per cent surcharge was imposed with a promise. The promise is that it will be disappear in the next budget with expected pick up in industrial activity and consequent buoyancy in tax collections.
For now, the officials, said there was no debate on the issue and added, "there is no reason to believe that the surcharge will continue beyond the stipulated period." The ministry also took comfort from the fact the industry was quite appreciative of the fiscal stress of the governmentand has not pursued the point of removing surcharge beyond a point.
Interestingly, the officials said, the feedback this time has more to do with procedures, a few lapses and what the government should do to accelerate economic reforms, rather than tampering with the tax rates. Also on the other hand, the finance ministry has invited proposals from the industry and state governments for taking up the second phase of economic reforms.
