BUDGET TRIVIA

RUN UP TO THE BUDGET 2004-05

TT Krishnamachari resigned as the finance minister in February 1958 amid controversies. This gave the then Prime Minister Jawaharlal Nehru an opportunity to take the reins of the finance portfolio in his own hands.

Nehru presented the Budget of 1958-59. In the opening para of his Budget speech, he said, "According to custom, the Budget statement for the coming year has to be presented today (February 28, 1958).

By an unexpected and unhappy chain of circumstances, the finance minister, who would normally have made this statement this afternoon, is no longer with us. This heavy duty has fallen upon me almost at the last moment."

LEXICON

Zero-based budgeting:This was introduced with a lot of zeal by Yashwant Sinha during his stint as the finance minister. The concept is simple enough. It implies that every project or programme must be reviewed in every Budget to justify its continuation.

So what is the deciding criteria? Well, it takes into account the project even when it is canceled and given zero allocation in the Budget. In this way, a lot of unproductive expenditure can be weeded out, resulting in substantial savings.

To justify any expenditure of a ministry, the officials have to therefore, work out the relevance of a scheme and what impact the government would face, were it to be discontinued.

In this way, schemes which outlive their usefulness may be eased out faster, with better justification. The principle was used in the UK for the first time and has gained popularity.

After Sinha introduced zero-based budgeting, it was transferred to the Planning Commission to implement. This was because it was felt that non-plan expenditure was too rigid to permit any such exercise. There was, instead, a scope for substantial savings in plan allocation.

BULL DOSE

In the forthcoming Budget, the tax net must be expanded exponentially and the dividend distribution tax on companies must be completely done away with.

As far as the public sector companies are concerned, they should be accountable on matters pertaining to corporate governance.

Moreover, I am looking forward to the Budget to introduce steps that will safeguard interests of the minority shareholders.

Budget 2004 should also reduce the quantum ofunproductive subsidies. I want the Budget to spell out clearly ways and means that slashes goverment expenditure drastically.