The burgeoning fiscal deficit, the lower than expected industrial/GDP growth, the lower tax collections vis-a-vis corresponding period of the previous year, the feeling of recession prevailing in different sectors globally and in the country and, above all, the looming menace of terrorist activities all add to the dilemma and difficulties of the finance minister in the work relating to formulation of the Budget for the financial year 2002-2003.
The task is by no means an easy one and needs to be handled with firmness and determination, rising above narrow sectoral or party considerations. There cannot be soft options.
The first aspect that needs serious consideration relates to avoidance of adhocism in budget-making. Rising above the short-term perspectives, a long-term strategy is the need of the time if planned and sustained growth is to be the goal.
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Unfortunately, the attitude of the trade and commerce bodies and associations of demanding the pound of flesh for their members, ignoring the national interest, has not abated. It will have to be ignored, and only such measures as would give long term boost to the economy and the country should be given due weight.
The hackneyed arguments of demanding more and more benefits and cuts in tax rates on the basis of laws of other countries, unmindful of the conditions of the country, need to be discarded.
Attention should be given only to such changes and relief from tax as are supported by well-researched empirical studies