Rusted frame?

The question that arises from some of the obvious blunders in the Union Budget is why the finance ministry's mandarins hadn't worked out the implications of what they were doing.

If it becomes obvious soon after announcement that a turnover tax on government securities will instantly kill all trading in these securities, that the mutual funds will have a problem because of differential tax treatment, and that the futures market too will suffer a body blow, then surely the mandarins should have known as much.

If they didn't (and you can't expect everyone to know and understand everything), they should have consulted the experts "" of whom there is no shortage "" or checked with market players who understand the issues and the possible complications.

Background research would in turn have demonstrated the folly of applying the turnover tax to non-delivery transactions, and running the risk of a drop in market liquidity.

And a proper understanding of the practice in other countries might have helped avoid these mistakes. Similar questions arise about the level of understanding in the ministry with regard to the cascading nature of the tax structure now that a central value-added tax system is in place, and prevented the problems caused by some of the changes proposed in indirect taxation.

In other words, what is the quality of staff work being done in the finance ministry? Time was when the ministry's mandarins were the best in the civil service, and a long list of illustrious names comes to mind.

In recent years, though, the top rung in the ministry has changed with every Budget "" thus clearly affecting the level of expertise in the system. Jaswant Singh used to complain about the quality of the officer pool from which he had to make his selection, a problem that Mr Chidambaram may face as well since there will be quite a few top-level retirements in the ministry in the coming months.

As for the tax research unit and the tax planning unit, there must now be questions about the quality of work they put in while examining specific tax proposals. Why, even the finance minister's speech seems to have mistakes that would have been avoided, if someone had bothered to go through it para-wise and done the required checking on facts.

In short, is what used to be called the steel frame so rusted that it is now showing in terms of the quality of staff work that goes into the Budget?

Everyone recognises that governance in the states has suffered because the civil service at various levels is not what it used to be. Is the problem more widespread than has been evident so far? And do ministers have a problem finding officers of the right calibre?

There is no question that many officers in many ministries continue to do high-quality work "" one reason why, for instance, the rising curve of HIV infections has begun to flatten. But the fairly elementary mistakes in the latest Budget do raise questions.