President Pranab Mukherjee in his New Year message to Governors and Lieutenant Governors on Thursday said that the country has to be “extra careful to alleviate the sufferings of the poor”.
His statement comes close on the heels of his meeting with the Opposition parties, who registered their protest against holding the budget on 1 February — just three days ahead of the state assembly polls. It was not about demonetisation, but the Opposition was worried that the BJP might get benefitted out of budgetary announcements.
Did the president, who has had stellar stints as finance minster of the country during crucial years, want to say that an early budget would be beneficial for the country and weaker section of the society? One needs to read the president’s lips.
“Besides demonetisation issue, the President through his address yesterday without mentioning the word ‘budget’ wanted to make it clear that Union Budget can’t be delayed beyond 1 February. The budget date was finalised well ahead keeping immense benefits in mind. In fact the president had welcomed demonetisation move. Budget date, assembly elections and this demonetisation issue – all shouldn’t be mixed up to draw wrong conclusions. If the previous governments had worked as per their ways, the present government should be allowed to function as per its decisions,” a retired senior bureaucrat, who had closely worked with Pranab Mukherjee in the Ministry of Finance told Firstpost, on condition of anonymity.
The government had justified its decision to have an early budget on 1 February instead of 28 February by saying that the move would help in giving approvals to annual spending and tax proposals well within time.
Before opposing the Union Budget date vis-à-vis election dates, the Opposition needs introspection.
First, the budget day (1 February) was decided several months before the announcement of poll dates. Prime Minister Narendra Modi had given a clear indication on 26 October 2016 that the budget date would be advanced to 1 February. A formal announcement was made on 16 November 2016.
Second, the entire country was aware that elections for state assemblies would take place in early months of 2017. No objection was raised in both the cases. But, immediately after election dates were announced, the Opposition parties including the Congress left no stone unturned to get the already finalised budget date postponed.
Political parties do have their reasons to worry, anticipating that it would be advantageous for the ruling BJP government at the Centre. At this juncture President makes this important statement—which many would like to interpret in their own ways. Even economic experts believe that altering the budget day would be of no help.
“Shifting the budget date won’t make any difference,” remarked Surajit Mazumdar, professor of Economics at Jawaharlal Nehru University.
According to experts, the advancement of budget announcement date will help the entire budgetary exercise to be over by, and the Finance Bill to be passed and implemented from 1 April onwards, instead of June. It’ll help companies and households to finalise their savings, investment and tax plans.
The Finance Bill and Appropriation Bill containing tax changes and expenditure details respectively are passed in May. Several tax proposals come into effect only after the Finance Bill is passed in May. But, with the budget on 1 February, the government will get ample time.
Even Pranab Mukherjee who had served as FM in three phases is well aware of it.
“The advantage here is that the Finance Bill will be passed in the Parliament in the next two months – February and March, and expenditures can begin from 1 April, unlike now. As per the traditional practice, after presenting the budget in Parliament on the last day of February, the Cabinet has the last month (March) left to get all the legislative approvals for the annual spending and tax proposals before the beginning of the new financial year on 1 April. Early presentation of budget will help the entire exercise to get over by 31 March, and expenditure as well as tax proposals can come into effect right from the beginning of new fiscal, thereby ensuring better implementation,” economist Prof Arun Kumar had earlier told this correspondent.
Political analyst Prof MD Nalapat said, “February 1 budget is perfectly fine. It’ll give the government more than one month period towards implementation. Unlike in the past, productive days won’t get wasted.”
The industry too has no qualms about the budget date.
“Budget date should not be postponed just because elections dates have been announced. 1 February is perfect as the government will be able to give funds to respective sectors well within time, unlike in the past. Even, President Pranab Mukherjee said yesterday that the government has to be extra careful in alleviating the sufferings of the poor. A timely implementation of budgetary proposals is must for this,” added secretary general, Federation of Indian Micro, Small and Medium Enterprises (FISME) Anil Bhardwaj. The MSME sector is considered as the backbone of Indian economy.
For full coverage of Union Budget 2017 click here.
Updated Date: Jan 14, 2017 21:00 PM