The presentation of the Union Budget 2012-13 was a historic opportunity for Finance Minister Pranab Mukherjee to take corrective steps. The finance minister wasted a historic opportunity by presenting a non-Budget. His Budget is an accounting statement, not a policy enhancing document. It fails to lift the sentiment of the economy.
The fiscal deficit for the financial year 2011-12 has been put at 5.9 per cent. There is an underestimation of the subsidy figure and the final figures might be more disturbing. Mukherjee has presented a Budget with a high dose of taxation. Excise duties have been increased by two per cent across the board. Service tax has been increased from 10 to 12 per cent. The rebate in the direct taxes is most minimal. The Finance Minister has imposed a higher dose of indirect taxes at Rs 45,940 crore.
The next year’s fiscal deficit, despite such anticipated collections, will still be at a monstrous 5.1 per cent, which is based on the premise that subsidies are reducing by Rs 26,000 crore. This is notwithstanding the fact that subsidy burden has merely increased Rs 73,000 crore in 2011-12. Infrastructure is an area where India needs to grow.
There is gross neglect of the expenditure on defence services and capital expenditure on defence. The capital expenditure has marginally increased by Rs 13,000 crore, which will be subsumed by inflation.
There is no mention even of minimal reforms. Obviously, the government has no intention of embarking on that course.
Yashwant Sinha
Former
finance minister
