Budget 2025 -26
Poverty for many and affluence for a few cannot go together in an Egalitarian society.
The 7th Budget from the Honourable Finance Minister Mrs Nirmala Sitharaman will be presented in a few weeks and as is always the case, the entire nation would be busy discussing the budget with all speculations , anxieties, expectations,, surprises, guesses, estimates, calculations on benefits etc for the economy, for various segments, Industry, agriculture, corporates and individuals etc. From the nation's point of view, all the budgets presented so far by the FM have proved to be very benevolent, prudential, fiscally conservative keeping the fiscal deficit under control and taking the economy on a fast growth trajectory, though the gap between the rich and the poor has widened in the process and continues to hurt the middle class and the poor.Thanks to the disciplined and conservative fiscal policy of the GOI actively supported by the very accommodative and innovative monetary policy of the RBI, the economy could successfully weather the storm one after another Covid 19 pandemic, geopolitical tensions like Ukraine war and other economic and social upheavals throughout the world. By any reckoning, the achievements through the budgets far outweigh the misadventures if any, is the ground reality and the optimism generated to make the economy the fastest growing and dreaming to become the most advanced economy by 2047 is simply marvellous. The whole country is in an enthusiastic mood and very well motivated to realise the dream of an advanced economic status. With this background, the ensuing budget if turns out to be a really dream budget, nothing can stop the country from moving forward fast and from this angle, some practical and simple suggestions or thoughts in budgetary proposals can perhaps be considered for possible implementation.
Mass Consumption of goods and services is the starting point of the vicious circle Investment, employment, production, demand , supply and consumption. While the need to contain cost of production and inflationary impact at sustainable levels continue to remain paramount to encourage cost of production and consumption, the need for resources for expansion of infrastructure and provision of all ingredients for production and manufacturing at attractive prices cannot be overlooked through fine balancing of the budgetary proposals. This exercise is a bit arduous but cannot be avoided to realise the dream of Viksit Bharat.
Review and Rationalisation of all taxes without losing sight of the need for augmented revenue very badly needed for all planned economic development need very urgent and serious attention.Evasion of taxes of all kinds continues to be a rule rather than an exception and this needs to be diligently and intelligently plugged using Technology, Artificial Intelligence, improved Regulatory and Supervisory techniques, enhancing improved awareness and enhanced sensitivity to tax compliance through all modes of communications, education, spread of literacy among the illiterates spread over the entire spectrum of agriculture, industry , commerce, trade, and wherever economic activities are held. This is a huge task but it must be taken care of by all means. Participative Management in letter and spirit ,involving professionals of all kinds, academicians, eminent and established people from all walks of life along with all those closely associated with Legislation, Judiciary and Execution can perhaps do the wonders to make the dream a reality.
The major concerns to be taken note of while raising taxes .
1 Cost of Production, Cost of Living and Inflation. While Cost of production is the key to encourage Investment and Production of Goods and Services, cost of living and inflation are the keys to keep the people socially, economically and emotionally together, happy and motivated.Continued persistence of High inflation particularly Food Inflation kills the enthusiasm of the people. Income levels and Inflation have to match for all categories of people in the lower Strata of the society.
2 Wealth Creation and Wealth Distribution The Country’s wealth and People’s wealth are two totally different concepts and the taxation policies should be more concerned with people’s wealth aiming at bridging the gap between the Ugly Rich and poorest of the poor. The tendency so far seen in the budgets in the creation of wealth seems to be in favour of the Rich, where as , the salaried class and all other middle income group do not seem to benefit proportionately in terms of GDP growth, tax reliefs with all make believe tinkerings and adjustments without having any regard to the high cost of living, unbearable food inflation, lowering of interest rates in savings having negative impact on the real incme and hikes in wages disproportionate to the inflation, and national wealth creation.The Cost of freebies, Corruption, black money creations, losses of PSUs and losses on account of Non Performing Institutions, Individuals, losses on account of frauds, fraudulent accounts, all sorts of malpractices seen, practised in and around the country particularly wherever public utility and Public services are involved having not only high inflationary impact on the goods and services affecting all segments of the economy but are also causing a great concern having budgetary implications.
3 Mass demand for Consumption for all goods and services is the key to kickstart the economy. Juggles of words and figures have their own limitations to have any visible impact on the consumption, investment, employment and growth of GDP with price stability and reasonably justifiable distribution of wealth. Time has come to have out of the box thinking and taking very innovative steps using technology optimally, Artificial Intelligence, market intelligence inputs, and services of human resources having talents, expertises, proven competence either on a voluntary basis or on a minimum cost benefit analysis basis, to involve, and give a kickstart to boost the economy. The Financial system particularly banking system has to be dynamic, innovative, creative, opportunistic to find ways and means to expand credit and augment employment and income in different segments of the economy taking advantage of the Financial Inclusion, enhanced economic activities thanks to intensified digital transactions and growing market for vegetables, fruits and rural products of all kinds. The bankers should get a feel of the people and the opportunities available for increased economic activities and accordingly need to be proactive in the service of the people and enhance their own business opportunities and that of the people.Budget can think of introducing some incentives to provide some reliefs for financiers and borrowers. .
4 Many a drop will make an Ocean should be the guide to augment the revenue of the Government. All the 140 crores or so people should be participating in Nation’s progress and enjoying the fruits of the development. From this angle, the taxation policies pursued so far do not seem to do any justice either to the entire nation or to all the population.The need for augmentation of revenue, compliance of tax laws and image building in line with all ethical practices worthy of emulation for the prosperity of the nation and welfare of the people is paramount. A comprehensive taxation policy minimising the number of taxes and maximising collection of taxes spreading the tax net as wide as possible without any gaps / loopholes but at the sametime making every citizen a participant in nation building by contributing his might with pride towards strengthening the economy. The very number of taxes and the rates of taxes need a relook and rationalisation.The people should feel comfortable that taxes levied are highly justifiable , badly needed for building the nation, developing the economy and achieving the welfare status for all as talked about In Rama Rajya.
5 Crowd Management and Collection of taxes should be well knitted and the administration of collection of taxes and their allocations should be simplified , traceable, accountable and beneficial both to the people and the Government. This is a herculean task and it requires a very strong bureaucracy, transparent mechanism to collect taxes and their distribution justifying the requirements of different states and the central allocations for nation’s security, physical and other infrastructure, legislative machinery, judiciary and things like that. Result oriented Governance is the only key to ensure growth and enjoy the fruits.
6 The nomenclatures for tax should be very minimum. There should be only a transaction tax covering all receipts and payments at all levels through the Financial system, supported by a very comprehensive GST covering all segments of factors of production, distribution without leaving any segments of the economy and if necessary only Income tax as supplementary resource .
7 Widespread collection of GST without rationalisation of both rates and goods and services from the entire population gives room for despondency, manipulation, evasion and leakage without any trace. This is a tough exercise but with technology, AI and a meaningful Governance mechanism, this should be manageable and acceptable. The acceptance of GST and its implementation should make tax compliance 100% fool proof and transparent. No evasion by hook or crook should be possible through vigilance and technology based supervision.
8 With increasing frauds, poor customer service due to laxity in governance, greedy pricing, surge pricing, exploitation of people given a chance in service oriented areas like tourism, hospitality, travels, insurance, hospitals etc the necessity for ensuring highest ethical standards in all institutions and service providers to enhance the image of the country, demonstrate the good culture, heritage and civilisation as the strong foundation for the welfare of humanity anywhere and everywhere throughout the universe is paramount and should be aimed at to achieve through meaningful Social audit involving established and eminent social reformers and men of proven competence in public life. Ethics which is Central to Sanatan Dharma should be the guiding spirit for all Institutions and Individuals engaged in the build up of the Nation and an enviable strong economy.The ensuing budget should provide for built in incentives and disincentives for compliance of all tax laws and Evasion of taxes. Likewise, the share of states should be directly or indirectly linked to provision of freebies from tax payers money which cannot have any approval from taxpayers.
Loka Samastha Sukhino Bhavanthu.
T V G Krishnan
Well wisher of the Economy and welfare of the People
( Personal Views ) .
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