Finance Minister Nirmala Sitharaman had a job cut out for her—present an interim budget that will stand the ruling party in good stead in the coming Lok Sabha elections. And that is precisely what she did. She promised that there would be a white paper on what the Modi Government achieved and what all the previous governments put together achieved. In fact, in her 56-minute speech, her shortest ever during the last six years, the reference point was 2013-14 when Narendra Modi shifted to Delhi from Gujarat. The claim is that this government has done better than when Modi’s own party man Atal Bihari Vajpayee and fellow Gujarati Morarji Desai led the nation. For instance, the Income Tax Department had processed more IT returns than ever and that too within a shorter period. Who does not know that it was an Information Technology-driven system that handled so many returns?
There were no big announcements like a reduction in gas prices. And yet, she was able to cheer the House when she announced that those with a total annual income of Rs 7 lakh could escape the tax net. Those getting a higher salary or income will now have to pay a lesser percentage as income tax. Whether this is the right policy when the net wealth required to be a part of the top 1 percent of the population is 84 times that of an average Indian's per capita income of Rs 1,72,000, is a different question. French economist Thomas Piketty had argued that there was a strong case for taxing more and more the rich. In India, they earn their billions by using or misusing their connections with those in power. Incidentally, the tax rate in India is lower than in many developed nations like the US where compliance is also higher.
One figure that Sitharaman’s husband and economist Parakala Prabhakar mentioned the other day is interesting. India’s total national debt, which stood at Rs 50 lakh crore in 2013-14, soared to Rs 150 lakh crore in 10 years. He also mentioned that 20 crore people have been pushed down the poverty line. His may be a lone voice but the point that she had to mention that so many millions of people would be provided free ration for another five years does not suggest that everything is hunky-dory on the economic front. It was a bit jarring for her to claim that she would present a fuller budget in July. Taking voters for granted is foolish, to say the least.
