Sunday, March 18, 2012

Budget 2012-13

Pranab Mukherjee, one of the few seasoned ministers we still have, presented the Central Budget for the year 2012-13 on 16th March. Economic requirements are at present overshadowed by political constraints. Thus the Finance Minister's job was unenviable. 
The imminent need to raise more revenue to meet ever-escalating expenditure is obvious. Mukherjee has chosen to enhance excise and service duties by 2% across the board. He has not dared to face the media-assisted criticism from voluble sections that would have ensued any increase in income tax rates. It is old hat that indirect levies like service tax and excise tax are more regressive and unfavourably impact the real "aam aadhmi". The Finance Minister however is in no mood to bite the bullet. This is simply bad ethics. This move by itself guarantees nearly 2% jump in inflation rate much to the consternation of the economically challenged.

Proposal to retrospectively amend the Income Tax Act to nullify the Supreme Court's decision on the Vodafone case is further evidence that the government cares two hoots for ethics. Public trust in GOI is vanishing fast. Fiscal deficit and ethical deficit are uncomfortably high.

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