The first Budget of Arun Jaitley is a bit of a damp squib. The expectations of the public were very high in the light of the election campaign and the bold promises of changes made by Mr Narendra Modi during the whirlwind campaign. Even after the Government came to power a lot of speculative news items were there in the papers, though it is a fact that over the last few weeks efforts were made to tone down the expectations. The only item in the Budget which conforms with the bold development plank of Mr Modi is the 38,000 Km highway plan announced in the Budget. That appears to be a large commitment in line with the development of infrastructure as promised by the Prime Minister. However, on the rates of taxation, procedures, correcting the mistakes of the Congress, this is a very, very disappointing Budget, not expected at all. The first item is the retrospective taxation. What Mr Jaitley has announced is the same as Mr Chidambaram had announced — that he will set up a high power committee to examine individual cases and will take corrective measures. That is not expected of a BJP Government; they should have just reversed the retrospective taxation measures announced by the previous Government and should have made a solemn commitment that no retrospective legislation will be made against the citizens. If at all a retrospective legislation has to be made, it should be in favour of the citizen or the assessee as the case may be. This is the norm in all civilised countries. Retrospective taxation to the detriment of the assessee is not known in any Western democracy or any civilised society. A person, a columnist like this one, thought that the first bold policy decision the BJP will announce even before the Budget would be this. But even in the Budget they have stuck to the previous line of a committee, etc, etc, which means the bureaucrats have had their way. The bureaucrats have not allowed the Finance Minister to be innovative. This is a sad thing.
Bureaucrats always like to do things to keep power in their own hands and to perpetuate their power. They never like to loosen any policy or rule or regulation in favour of the citizen. If a BJP Government, and mind you, this is the first time a Government has been elected by the people as a BJP Government, others were cobbled up later — this time they have a clear mandate and it was expected that they will announce a lot of pro-business policies. Even the retrospective taxation cannot be reversed — it’s a very, very disappointing thing. Similarly, the exemption limit. A month ago the talk was that it will be increased from 2 lakhs to 5 lakhs. Later on they started pruning it down – to increase it from 2 lakhs to 2.5 lakhs is neither here nor there. Bureaucrats, as usual, tell you that there will be a loss of revenue. The Finance Minister could have asked them what is a loss of revenue? Let us quantify the figure, and increase that much in any other tax. The moment you give relief to crores — literally to crores — of tax payers, it will unleash not only goodwill in favour of the Government, but also spare money in the hands of the assessees, which can again be invested maybe in the stock market, maybe in mutual funds, maybe in the economy. But by taxing the already taxed man who is reeling under inflation, who has no relief and to give him no relief even by way of taxation, then where is the difference. This Budget is a flattery to Mr Chidambaram. Mr Chidambaram can easily today say that giving election speeches is one matter, but facing the realities of the chair is another matter. And Mr Chidambaram would be justified in feeling extremely happy that the new Finance Minister has just followed the same path as he was doing in a conservative way, with a few changes here and there. There is no bold initiative in the Budget — that is disappointing for the people who voted for the Government. It might not be disappointing for us social democrats, because that is the pattern going on for the last 15 to 20 years. But if there is a pro-business friendly Government, large measures are required to be taken. Of course he has four more opportunities to go, because this mandate which the BJP has earned will remain for five years. However, the first opportunity was the best opportunity to show that one is different. That opportunity has been lost. The exemption limit is hardly increased, and under that some other section, the investment limit, that also 1 lakh to 1.50 lakhs. These are very, very small changes which will make no dent on either the economy or the public mood. Overall we can describe this Budget as too little, too timid and too cautious. It is neither here nor there. In 1985 Finance Minister V P Singh lowered tax rates against the advice of bureaucrats. The result was more revenue, not less. The Finance Minister has to be bold to overrule the bureaucrats. All in all this is more a Congress Budget than a BJP Budget.