India Budget 2014-15 : Roadmap Of Modi Government?

Narendra Modi had established his political leadership on 16 May 2014 when he led his party to the most unexpected and stunning victory in the elections to the Indian parliament. His economic leadership was awaited for the budget 2014-15 to to reveal. The budget presented by Finance Minister Arun Jaitley had nothing stunning or unprecedented about it. His speech of more than 20000 words was nothing less than a torture of more than 2 hours! As the Finance Ministers in the past over a decade have been lawyers of the highest court of the country, their treatises were nothing less than paper books of a SLP (Special Leave Petition) before the Supreme Court. Why should our Finance Ministers speak so much, for so long, in chaste English, interspersed with King’s/Queen’s idioms or Harvard Business School phraseology or poetic pieces from English/Hindi/Urdu/Tamil/Bengali etc? Can’t they be brief- as brief as a 20 minute speech? In any case everybody doesn’t understand everything he says inside the parliament. That is why the Finance Minister devotes several hours explaining the salient features of his budget proposal to the press and the media. Even that does not satisfy everybody, so the Prime Minister does some post surgery care, ably supplemented by prominent members of the council of ministers, party leaders, Finance Secretary, Economic Advisers, business and industry captains, academics and common men on the street. All this elaborate exercise for nothing more than a net benefit, if there can ever be any real benefit from any Finance Minister worth his salt, never exceeding a few thousand rupees equivalent to US $ 700. Rest of the insipid, boring budget exercise is noting more than mathematical jugglery in the name of reduction of tax under one description only to be increased under another description. As arithmetic is hardly interesting for many of us, we don’t mind getting budgeted for cheating in a clean and open official way in comparison to several other ways like 60% discount Sale (which really is discount not of 60% on all items but “up to” 60% on some, a few or none ) because they might have been sold by the time you arrive). In any case, the annual budget proposals open huge business opportunities for chartered accountants and taxation lawyers (the community from which some of our prominent FMs come), because no body is able to clearly explain what exactly they  mean. Interpreting such obtuse English diction then becomes the extremely pleasant responsibility of the accountant, lawyer and retired judges engaged on “chamber practice’.  Consultation with retired judges or seeking their opinion on complex tax issues lends weight to the case when a case is filed before the appropriate competent authority including the court. If that makes the budget speech look like a case book of an SLP, it is only appropriate.

But the question needs to be answered as to how  such a practice came in to existence. India is not known to have a tradition for budget the way we witness it in democratic India today. Not even the Kautilya Arthashashtra prescribes any such drill. It is a practice of the Imperial rule in India. The British had this practice, which they imposed on their colonies. Since they were a foreign power, extracting taxes from the natives from every single economic activity, they needed to justify their tax proposals. They knew they had no moral justification for the taxes they were imposing on the poor natives, they resorted to jargon/rhetoric/coinage. The natives resented any such tax imposition most justifiably, but the imperial power would consistently refuse to lend any ear to public outrage. This imperial tradition continues even today, what with token cuts (of just one rupee) being rejected. The House of the Elders (the Rajya Sabha) has no power to drive any saner advice as it is only the Lower House- the House of the People or the Lok Sabha that has the power to make decisions on money bills. Even the President of India has just to okay it once the Lok Sabha puts its seal of approval on the budget proposals as presented by the FM. The British had their own economic logic to suppress local industry and business in order to promote their industrial products. They needed to create a market for their products. It mattered little if it meant closing or destroying existing facilities. Tax on production was an instrument to achieve that goal. It contributed to loss of livelihood to millions in due course. The limit was breached when they imposed tax on common edible salt. At a time, tax on salt fetched them more than 25% of gross revenues. Indian masses responded effectively to this measure under the leadership of Mahatma Gandhi, who launched the Salt Satyagraha and this movement proved to be the nemesis of the British Empire. In less than 50 years an empire over which the sun never set was reduced to an island country. The style and features of the budget speech of the Indian Finance Ministers carries on that tradition. It is, therefore, time for the FMs to introduce change in that anachronistic tradition of insipid budget speech enumerating item after item taxed or tax-exempted.

Children in Indian schools are taught to write an essay under the title “If I were the Prime Minister”. I think it is time to teach them to write another essay titled If I Were The Finance Minister. These budget proposals impact economic activities across all segments of production and marketing. It is one single source of corruption in India. It is responsible for impeding the process of creation of additional jobs. It retains poverty. It talks of small savings, whereas an ordinary citizen needs millions for a bare subsistence level survival. Our economic philosophy drives away our brilliant students to complete their education in foreign universities; our talent to serve abroad; our experts to contribute to the development of other countries. We have no value for skills, talent, expertise. We want to maintain “small” in all respects. We hate prosperity of the common man. We dislike our wealth creators. We neither protect our markets nor production advantages. Unless we introduce radical changes in our thinking and functioning, we will waste historic opportunities like the one the last election to the Lok Sabha has sprung before us.

I feel that a golden opportunity has been lost on the occasion of presentation of this year’s budget. Explanations offered are not contested, excepting that a visionary leadership is not constrained by lack of time, since it has the plans ready in advance. This budget has one very important achievement: it has ended the unethical practice of highly insensitive neo-liberalistists controlling the government to increase prices endlessly thinking that the common man has the capacity to go on paying for ever the rising prices. This is no mean achievement of the Modi government. It needs to be stressed here that the Congress led UPA-II government was punished for that insensitivity. The caution displayed by the Modi government’s budget, in spite of the Finance Ministry still working under that old discarded philosophy, deserves kudos. Still a word of caution needs to be sounded: the Modi government should not buy the arguments that will be thrown at it by the old school of mandarins of the Finance Ministry, who will justify every price increase. Price rise in India is due mostly to corruption, black marketing, hoarding etc. The operators are powerful nexus of politician-bureaucrat-business. If these are controlled, prices will fall rather than rising. Since the budget makes no mention of any scheme to retrieve public money from the hands of such white collar criminals, this caution is being sounded. To give an example, PSU (Public Sector Undertakings) have been turned sick by such elements, who have made several attempts to completely retire them, can always be rejuvenated only if the right man is given charge to lead them. The right choice would eliminate the corrupt practice of auctioning them to the highest bidder, as was exposed in the case of appointment of a Member to the Railway Board where the Minister was alleged to have demanded rupees 10 crores from one candidate in the last government of Dr Manmohan Singh.

This government has got the best opportunity to serve the nation. It is the second freedom. Modi can set a record, like Jawahar Lal Nehru did at the dawn of the first freedom, by changing the poor India in to the prosperous India. There is more than enough for India to serve all the needs of its people. There are countries in the ASEAN who have achieved that goal. The economic meltdown of 2008 affected the western world more largely because their model of economic development was dependent on wars and technological superiority providing them ready markets globally. In the case of India it is different. Who understands it better than a person born and lived in a state like Gujarat. What is Modi talking about when he mentions the Gujarat model of development? Let me put it in a pith & substance manner: it is the GUJARATI’s Model of Development. They live globally and are not restricted to the Indian state of Gujarat alone. It is the real spirit to convert disadvantage to advantage, disability to ability, poverty to prosperity. It has to be made in to the Indian Model of Development. The interregnum between this budget and the next one needs to be employed to critically examine the text and mind set to tax; to introduce change from revenue generation for the imperial power to livelihood generation for the masses; to promote prosperity of the people instead of perennial poverty. It will obviate the present need for dividing the people socially or economically in to several categories to deliver services, benefits or concessions. Each category of Indians represents a highly professional skilled workers of a knowledge society of ancient lineage devastated by poverty of the centuries of foreign rule. Investment in reviving that spirit demands marked and focused attention for several years.

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