We are a country of rituals. The ritual of presenting the
Finance Bill, 2008 took place on 29th February, 2008. I hope the people
concerned will understand the difference between a ritual and a farce. The gap
between the Finance Minister’s speech on the floor of the House and what comes
out in the fine print of the Finance Bill may render this ritual nothing but a
farce.
Immediately after the conclusion of Finance Minister’s Budget
Speech my impression was that I have heard the inaugural speech of the next
General Elections for the 15th Lok Sabha. The Government under the presumption
that the ‘aam aadmi’ is still around has allegedly lavished scores of
benefits on him. It is pitiable that the economic reforms to strengthen the
basis of our economy are being consistently ignored. The Hon’ble Finance
Minister in the budget speech has made certain proposals for which he has not
made any budgetary provision. At the same time he has proposed certain
provisions in the Finance Bill to amend the statutory provisions of Direct and
Indirect Taxes which had no mention in the Budget Speech. The missing link may
give a clue of the state of affairs in the North Block.
It is heartening to know that the Government is sensitive
towards the woes of the farmers and has proposed a scheme of waiver of loans. I
am personally against waiver of any such loans.
Looking at the scheme proposed doubts are expected whether
the benefit of the waiver scheme will trickle down to even to 5% of the affected
farmers. The scheme will only help the unscrupulous elements in the farmers who
have misused the loans for purposes other than for which they were granted. The
honest borrowers who have repaid the loans will be discriminated against the
defaulters and in future they will be discouraged from prompt repayment of
loans. In my view, the amount allocated for loan waiver scheme can be used more
constructively for the benefit of farmers. For example, the money allocated for
the purpose of loan waiver scheme can be used for inter-linking the major rivers
of our country to solve the problem of famine caused by drought and floods,
which was thought of long ago but has remained to be implemented due to lack of
resources, political and administrative will.
However, it is very painful when you know that the proposed
scheme is nothing but crocodile tears which are being shed after many people
have committed suicide. The Government is obliged to bring a white paper on the
causes of suicides by the farmers. Unfortunately, in our country the opposition
has gone into a long hibernation which can be equated to the proverbial
‘Kumbakarna nidra’. The Hon’ble Finance Minister proposes to write off the
loans given by the banks to the extent of Rs.60,000 crores without mentioning
who is going to dispose of the same. The scheme of waiver has got too many
loopholes and will not achieve the desired results.
On the issue of sound economic principles, it is not
desirable to encourage mass scale waiver of loans. The waiver scheme will send
wrong signals to the law abiding citizens and create a unfriendly credit
atmosphere. Various studies have, time and again, indicated that the unorganized
agricultural sector does not require unwarranted and anti-reform subsidies and
waivers. The farmers require a system in which timely assistance is provided to
facilitate the agricultural operations. The funds allocated for waiver can be
efficiently used to develop such a system which will not require any such waiver
scheme in future. If the funds allocated for waiver of loans are properly
invested in the development of rural infrastructure then the turnaround of the
agricultural economy is not faraway.
The provisions pertaining to taxes confirm the view that the
executive is twisting the legislative arm to overcome the judicial
pronouncements. The over enthusiasm on the part of the tax gatherers to obstruct
the development of law is detrimental to the confidence of the tax-payers.
In bringing out the special story on the Finance Bill, 2008
my dear friends have contributed by sparing their valuable time and shared their
knowledge. I acknowledge the inputs of Vipul Joshi, Vipul Choksi and Vipin
Batavia in conceptualizing this issue. I sincerely thank all the authors who
have contributed to this issue by sparing their valuable time.
