Sir, I rise to participate in the discussion of the Finance Bill, 2016. I shall start by quoting para 187 of the Hon Finance Minister's Budget speech on February 29, 2016. I quote: "Madam Speaker, my direct tax proposal would result in revenue loss of Rs 1,060 crore and my indirect tax proposals are expected to yield Rs 20,670 crore. Thus the net impact of all tax proposals would be revenue gain of Rs 19,610 crore."
Sir, this is a huge hope. Revenue loss in direct tax is certain and yield from indirect tax is only expected. Hence, revenue gain would remain imaginary. This is not a good Budget arithmetic.
I shall now discuss direct and indirect tax collections. There is no clarity on how the government actually plans to collect the expected revenue. The shortfall in direct tax collection is expected to be met by indirect tax collections - this shows there is no perceptible improvement in the profitability of private companies, and as a result there is no growth story, which is really driving the Indian economy. Sir, the Hon Finance Minister's Budget 2016 has nine pillars, namely, agriculture, rural sector, social sector, education and job creation, infrastructure investment, financial sector reforms, governance and ease of doing business, fiscal discipline and tax reforms. These pillars are cracking and crumbling. The Finance Bill is born out of the last pillar - tax reforms. The Hon Finance Minister proposed to lower corporate IT rate for the next financial year on relatively small enterprises and companies with turnovers not exceeding Rs 5 crore. Corporate tax has seen no major reform. There was supposed to be a big impetus, as the corporate tax was reduced from 30 per cent to 25 per cent. Sir, given the fall in export, private companies are sitting idle on cash without investing it; and there is very little driving force in the economy. Further, there is little to show other than more committees and more red-tape in relation to rationalisation of taxes. These days it is hard to distinguish between a Money Bill and a normal Bill or a Finance Bill. Sometimes a normal Bill becomes a Money Bill because it becomes convenient for the government to do so. The Aadhaar Bill was treated as a Money Bill. The reason was quite obvious. If you consider the same yardstick, normal Bills can be converted into Money Bills or Finance Bills. Because a bit of levy or a little expenditure from the Consolidated Fund can be incorporated in every Bill.
Sir, our RBI (Reserve Bank of India) governor says, "Aandhon nagari kanha raja (one-eyed is the king in the land of the blind)." I don't know what he is talking about. But I do believe the Hon Finance Minister has no eye problem. To me it seems, his remark has something to do with the country's financial and monetary system. It is an indication that everything is not well in our system. The RBI governor is sceptical of the system. There is a general impression that the present NDA government is not employee-friendly, particularly with the bureaucrats. It is a good thing for us. Please continue to do so. The more you tighten them they become more friendly with us and the Opposition. I don't know how far it is true, but people say that many IAS officers ran away from Delhi; it might be because of CM saab or PM saab.
Sir, it seems that the whole economy is run by a few taxpayers. Four per cent of taxpayers are keeping the economy alive and kicking. I am told that the tax collection last year was much below the target. It is a matter of concern. Finance Minister saab, why are people not ready to pay taxes?
The provident fund (PF) interest rate is changing every day. People in the streets are talking: "What is the PF interest rate today? It is now just like the foreign exchange rate." Please do not tinker with the provident fund. Only the common man and middle-class people are having PF. Please be firm and consistent.
This government says the rupee appreciated in real terms in 2015-16. It appreciated by three per cent. I am not an economist but I am a student of mathematics. I only see that almost every day the rupee is weakening against the dollar. I do not appreciate it and I believe many of us sitting here may not appreciate it. Then how can the Hon Finance Minister says the rupee has appreciated?
Sir, the Hon Finance Minister says our economic growth will accelerate to as much as 8.5 per cent if the monsoon does well. Whereas the Economic Survey projected growth at seven to 7.75 per cent for 2016-17. Okay, let us be optimistic. But Jaitleyji, if the monsoon fails, will you also fail? Please be careful, one Swamy has arrived in the Upper House and reshuffling is on the cards in Nagpur.
Chairman sir, expanding the tax net is a wonderful idea. But taxing the agriculture sector is a bit touchy. Jailtleyji, have you consulted the farmers of this country? Have you spoken to Prakash Singh Badalji, Deve Gowdaji, Sharad Pawarji, Shanta Kumarji, etc? If they say yes we do not mind.
Rs 1.14 lakh crore of bad debt has been written off between 2013 and 2015. You will blame the UPA for the waiver in 2013. But the waiver in 2014-15 is much higher. Let us not blame one another. This is a very serious matter. We are playing into the hands of a few crooks. I know you need money and we also need money to run the party and to fight elections. But is this the way? We need to think seriously about it. In a way we have failed the people of this country.
Sir, central assistance to special category states has been done away with. Poor states are now in the doldrums. For instance, the north-eastern states, including my state Manipur, are facing huge financial problem because of the withdrawal of assistance. Now they are compelled to get money from the Centre: the loan component is now 70 per cent and the aid component 30 per cent. Earlier it was 90 per cent aid and 10 per cent loan. In the long run the poor states will collapse; in Marxist jargon the states will wither away. Sir, as a matter of fact, the economy is not on the right track. The Hon Finance Minister presented the Union Budget 2016-17, citing that the CPI (Consumer Price Index) inflation has come down from nine per cent to 5.4 per cent. He said, "It is a huge relief". For us, it is a huge disappointment. These are some of my observations and suggestions on the Finance Bill, 2016. Thank you very much, sir.
An English translation of a speech in Manipuri during the debate on the Finance Bill, 2016, by Thokchom Meinya, member of Parliament from Inner Manipur, in the Lok Sabha, on May 4
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