Save the Budget

If Sonia Gandhi's smug paratroopers wish to redeem themselves even a little in the eyes of the country they must, when they meet in the S...

If Sonia Gandhi8217;s smug paratroopers wish to redeem themselves even a little in the eyes of the country they must, when they meet in the Speaker8217;s chambers today, ensure that the budget presented by the Atal Behari Vajpayee government is passed as early as possible.

Passed in its entirety that is, with no subterfuge or sophistry of the kind that senior Congressmen are already beginning to hint at. Anxious to seem a responsible leader, Arjun Singh rushed to tell reporters yesterday that the Congress would not put any hurdles in the way of the Budget8217;s passage 8212; if the Budget is not passed by May 12, all indirect tax rates which have been in operation since Vajpayee8217;s budget was presented on February 27 will lapse, and the country will revert to the pre-Budget tax rates. That8217;s indeed very noble of him, but then Singh rushed to add that any new government reserved the right to come up with its own Budget, perhaps a few months later. That8217;s precisely what we don8217;t want. For what Singh is suggesting is thatwhile they will not allow the present tax rates to lapse, in June or July, millions of manufacturers and retailers across the country will once again be confronted with an entirely new set of tax scales, different from the ones presented to them just a little over a month ago, to re-work their numbers all over again. Apart from the sheer logistical nightmare this presents for everyone except scheming politicians, this is also the surest way to ensure that the country8217;s entire business cycle comes slowly to a grinding halt, while every player postponing buy and sell decisions while he tries to figure out how things are going to change for him.

Nor, though Singh may like us to believe so, is it certain that a new coalition, whether headed by Sonia Gandhi or not, is going to be any more stable than the Vajpayee one, indeed it may be even more precarious. In which case, the last thing we need is for the Congress coalition to present another Budget within a few months, have trade and industry adjust to this, andthen have the government fall all over again, with the next one reserving the right to inflict the same farce. By the same token, we cannot afford the luxury of allowing the Congress to work out its coalition structure first, and then plan some amendments to the Budget before having it passed. We just don8217;t have that kind of time. Who knows, the Congress may not be able to muster the numbers, if they do the allies may break up over their pounds of flesh. By which time, the tax proposals would have lapsed.

None of us have the right, or the capability, to prevent politicians from playing their games, especially since it is our fractious mandate that allowed this. But what we can ask them to do is to try and reduce the negative fallout of their actions, a little. There is no doubt that, as in the past, political uncertainty will result in a vastly lower growth in investments and in industrial production. Since 1995-96, industrial growth has almost halved and that in real investment has dipped from 23 per centin 1994-95 to a pitiful 3 per cent last year. But if the Budget is not passed, or another one is inflicted on the country soon, another facet of uncertainty will be added to the present ones, that of India having an unstable tax regime. Why do we want to add to our problems? It8217;s the least that the country8217;s politicians owe it.