A right-leaning economist has described the Union Budget as unrealistic' and based on weak assumptions'. At a discussion on the Budget 2013 organised by the Swadeshi Jagaran Manch, Manch's All India Coordinator B M Kumaraswamy raised questions at the provisions made in the 2013 Budget.
Making an indepth analysis over the budget, presented on February 28, by Finance Minister, Manch's All India Coordinator B M Kumaraswamy wondered, "To what extant will P Chidamabaram succeed in implementing the budget against the background of the present global scenario as it lacked economic logic or parameters? With his one-sided analysis, you do not get an actual picture of the budget."
The present economic scenario is such that the country is facing four major issues - lowest GDP growth of 5 per cent in the last decade, twin deficit of fisical and current account; falling exports and increasing imports resulting in foreign exchange deficit of $75 billion; and a high rate of inflation. Added to this is the approaching general elections, he said.
Quoting Arthasastra of Chanakya, the Professor said, according to Chanakya's theory, a state should not exceed its expenditure beyond its income. But, right from 1967-68 all Finance Ministers religiously presented a deficit budget. None of them has presented a surplus or balanced budget so far.
The 2013-14 budget too showed a planned expenditure of Rs 16.67 lakh crore against the expected income of Rs 14.90 lakh crore, a deficit of 22 per cent. The FM has not proposed any new taxes to cover the deficit, but promises of bringing down fisical deficit to 4.8 per cent. The 10 per cent surcharge on those who pay Rs 1 crore and above tax would cover meager 2,448 people, he said adding 60 per cent of the country's economy was in terms of black money.
Citing the example of Vodafone, the manch leader explained how MNCs were taking advantage of the double taxation benefit, routing funds from Mauritius which serves them as a tax haven, and deprives the country of huge amounts in tax revenues. Realising this conspiracy, former Finance Minister Pranab Mukherjee levied Rs 11,000 crore tax penalty on Vodafone.
He criticised the cut in defence expenditure. Also criticising the disinvestment policy, the manch leader said, it was like selling the family silver; but even this was not successful. Spectrum auction too had failed to generate the expected revenues. Added to this, the Indian market was not in a healthy condition. Instead of responding positively, the share market fell after the budget announcement, showing its disenchantment. "All these would make it difficult to reduce the fisical deficit," the economist observed indicating concerns over the ensuing economic scenario in the country.
Kumaraswamy, who was delivering the keynote address under the auspices of the Manch, Mysore Chamber of Commerce and Industry and Institution of Engineers, observed, "how far the FM will be successful in the implementation of the budget, we have to think seriously.