BUDGET TRIVIA

RUN UP TO THE BUDGET 2004-05

After the seventh general elections in March 1977, the first non-Congress ministry under the then Janata Party, assumed office. HM Patel held the finance portfolio.

He presented the interim Budget for 1977-78. In the shortest ever interim Budget speech of just 800 words, he said, "....the annual fiscal statement prepared by the outgone Congress ministry will serve the limited purpose of fulfiling a Constitutional requirement for taking a vote-on-account before March 31, 1977." He presented the annual Budget for 1978-79.

BULL DOSE

In the forthcoming Budget, I expect no change in the dividend tax policy and the existing benefit should continue.

Besides, long-term capital gains tax benefit should continue. The government should exclude ADRs and GDRs from the foreign institutional investors' limit and allow pension funds to invest in the market.

In Budget 2004, the government should specify uniform excise duty of 8 per cent on the textile sector and abolish additional excise on textiles. I expect a reduction in customs duty on coke from the existing 5 per cent to zero for the steel sector.

And, there should be uniform excise duty on steel levied at 8 per cent.

LEXICON

Public Account: The revenue collected by the government, including tax receipts, non-tax revenues, disinvestment proceeds, loan recoveries from states and interest paid by states on central loans, find their way into the Consolidated Fund of India (CFI).

The CFI is, generally speaking, the money which belongs to the government. Distinct from the CFI is the public account, which holds moneys received by the government but which need to be paid back sometime, or later.

For instance, all the funds raised through small savings schemes, provident funds and other deposits, are kept in the Public Account. These funds, at a future date, need to be paid back to the original depositors.

Since the money does not belong to the government, Parliament approval for payments from the Public Account is not required.

At times, the government decides to earmark money for specific sectors like sugar development or for replacement of depreciated assets of commercial undertakings.

These are taken from the CFI with Parliament approval and placed in the Public Account. The government has to, however, approach Parliament for its consent before actual expenditure on the specific objects is undertaken.