‘Discussion on Union Budget 2017’ was organised jointly by the Department of Management Studies, Periyar Maniammai University and Express Avenue, Chennai at the E-Hotel on 15th February 2017. The discussion meet was presided over by Dr. K. Veeramani, Chancellor, Periyar Maniammai University, Vallam, Thanjavur. The Panel discussion was chaired by
S. Rajaratnam, renowned tax management consultant and prolific writer. The members of panel were tax advocate B. Ramana Kumar and R.R.Aroonkumar, Chief Financial Officer, Express Avenue. Dr. E. Sundararajulu, Vice-President of Tamil Nadu Intellectuals’ Forum proposed vote of thanks. Auditor R. Ramachandran coordinated the programme.
The excerpts of the presidential address, delivered by Dr. K. Veeramani:
The Union Budget 2017 presented by the Union Finance Minister has two distinctive changes from the budgets, presented earlier. The one is on the date of presentation of budget on February 1. Usually, the union budgets would be presented on the last day of February every year. The other is the discontinuance of presenting railway budget separately by the Union Railway Minister. From the current budget onwards, the railway budget gets merged with the general budget.
Budget is not mere Income & Expenditure Statement
Any budget presented by Government is not the statement of income and expenditure; but an instrument to implement the policies, formulated by the ruling government. The triple justice viz. social, economic and political as adumbrated in the preamble of Indian Constitution has to be ensured. Budget has to present effective means to dispense these triple justices. It has to show the means to mobilise and enhance the revenue resources of the government.
Share of any development sector to the Gross Domestic Product (GDP) of the country is the index of efficacy of the respective sector in building up economy.
When the country attained Independence, the share of agriculture to the GDP was at 65 per cent; at present the share has come down to 17 per cent. During the same period the share of manufacturing sector has decreased from 25 per cent level to 15 per cent. The service sector has increased its share from 10 per cent to 60 per cent.
No concrete initiatives to develop agriculture
50-60 per cent of the country’s population depends on agriculture. When the level of dependence is that much, the decrease in the share of agriculture in GDP will not reflect the desired economic development. The Union Finance Minister has stated that income, derived from agriculture would be doubled. No ways and means to achieve them have been pronounced in the budget. Out of the total expenditures, 85 per cent goes to meet the cost of salary and establishment of the State Governance. Only 15 per cent is left for the development. How would it be possible for the State to allocate funds for the development schemes in various sectors?
Decreasing trend to Education sector
For the past 3 years there has been consistent decline in allocation of funds to education sector. Out of the total population of the country, nearly 6.5 crores have not gone to schools at all. In 2013-14 the allocation to education sector was 4.5 per cent and it has declined to 3.65 for the current year. The increase in the fund allocation is not real but its effect is compensated and nullified by the prevailing inflationary trend. In fact the allocation would be in reverse in comparison to the last year figure. The increase is nothing but a statistical paradox.
The Gross Enrolment Ratio, prevailing at school level has come down to its half when it is enumerated at the level of higher education. It has to be borne that opening up of an educational institution is akin to closing down of a prison. The decreasing financial allocation to education sector reflects only the adherence of Manu (a)dharma, the religious code which had denied education to the major toiling masses for centuries together.
Banks, almost towards collapse
The size and space of bad loans occupy the major share in the credit portfolio of banks. The quantum of non-performing assets surmounts in galloping speed. The capital base of the banks is coming down. Union Government has announced that Rs 10,000/- crores will be infused as Capital to the State run banks. The gap between the requirement of additional capital and the announced infusion can be equated to the adage of “Providing popcorn to appease the hunger of an elephant!” Can the Government allow the public sector banks to collapse?
No antidote for Demonetization
The daily routine of common man is affected very largely due to the demonetization measures announced since November 8, 2016. Still the sufferings endure. Banks are fully engaged only in discharging their services related to demonetization and not in the areas of business development. This situation will lead to further decline in the financial health of banks.
Despite all the demonetization measures, the effective black money has not come out quantitatively.
Economic disparities widen
Union budget does not contain anything to offset the economic inequalities, prevailing in the society. A little announcement has been made to bring out the excessive and inequitable income concentrated with few individuals and corporate to fill up the treasury reserve.
S. Rajaratnam: Union Budget 2017 must have reckoned the surrendered, demonetized high denominated currency notes. Had it been done so, financial resources would have been additional. Such resources can be deployed to more of development schemes.
There is no use in the rising economic performance parameters which do not reflect the real welfare of the people. There is no mention about the measures to ensure food security. Water is the scarce resource in Indian Agriculture. To distribute water to all without any wastage, the project of linking of rivers is most important. Nothing is mentioned about it in the budget.
B. Ramana Kumar: The major means to have been mentioned in the Union Budget is to increase tax revenue to the state exchequer. Taxing the rich and lessening the tax burden on the poor is the basic purpose of budget. Union Budget 2017 is contrary to this normality. More of citizens owning the housing shelter, the better is index of standard of living. When the total quantum of bank finance to housing loan is increased, there is no discrimination for levy of income tax exemption for housing loan interest between own accommodation and the let out house, constructed/purchased out of the bank loan. Tax burden on public trusts has been increased. The exemption extended to trusts from being subjected to raids by the authority has been withdrawn.
Compiled by: V.Kumaresan