FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
One of the priorities of Finance minister Pranab Mukherjee will be to make the budget people-friendly.
Rising food prices are pinching everybody and he would like to do his bit to increase purchasing power. Hiking the tax exemption limit might be one of the tax relief measures in this regard.
The Economic Survey has outlined that the fiscal deficit at 4.8 per cent for this year was on track.
Increasing investment in infrastructure has become an exigency and Mukherjee is expected to announce measures such as creation of infrastructure development fund and deepening of corporate bond market.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Steps for attracting foreign direct investment (FDI) for infrastructure projects will be priority, however, any major step towards liberalisation of critical areas including FDI in retail would require political acceptance.
He will also outline steps towards Goods and Services Taxation (GST) and Direct Taxes Code (DTC).
Changes on both indirect taxes and direct taxes would to be done keeping this in mind. DTC and GST, both, are proposed to be implemented from 2012-2013.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Pranab's sixth Budget
After playing a crucial role in breaking the logjam in Parliament, finance minister Pranab Mukherjee is all set to steer clear the cloud over the prospects of a sustained 9 per cent or more economic growth in coming years in his sixth budget to be presented on Monday.
Morarji Desai with eight full budgets holds the record for presenting maximum number of budgets, though in two different stints.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
P Chidambaram comes next with presentation of seven full budgets, also in two different stints and in two different governments.
Mukherjee would join C D Deshmukh in doing so by presenting his sixth budget. He is holding the finance minister's portfolio for the second time after his first stint in 1982-1984.
Chidambaram and Deshmukh had the opportunity of presenting full Union budgets seven and six times during their tenures (1996-98, 2004-08) and (1950-56), respectively.
Yashwant Sinha was finance minister for a few months in 1991, but could not present a full budget. He got the portfolio again during 1998-99 and 1999-2002 and presented five full budgets.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Dr. Manmohan Singh had also presented five budgets during 1991-96. Y B Chavan, who held the portfolio during 1971-75, presented four budgets and T T Krishnamachari presented three.
India's first finance minister R K Shanmukham Chetty (1947-1948), John Mathai (1949-50, 1950-51), Ramaswamy Venkataraman (1980-1982) and VP Singh (1985-1987) got the opportunity twice each. Jaswant Singh presented just one budget.
Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi presented one budget each in 1958, 1970 and 1987, respectively.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
An experienced team behind the Budget Finance minister Pranab Mukherjee has a relatively experienced team this time compared to last year's, when both the revenue secretary, and the chief economic advisor were new.
Most of the senior officials in the finance ministry had worked on last year's Budget and are expected to provide the continuity this year as well.
Finance secretary Sushma Nath is the senior-most among the officials in the Budget team this year.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Revenue secretary Sunil Mitra had his first brush with the Budget last year. He came to the revenue department in February last year and worked on the Budget only towards the end.
Budget 2011-12, to be tabled on Monday, will be his first full-fledged Budget. Economic Affairs Secretary R Gopalan has come in place of Finance Secretary Ashok Chawla, who retired on January 31.
His successor in the disinvestment department, Sumit Bose, also got a little chance to work on last year's Budget as he joined the department in February.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Bose, however, may get more opportunities to work on the Budget as his retirement is three years away.
Though the disinvestment secretary, is not part of the core Budget team, his inputs are crucial because a portion of government's capital expenditure on social sector programmes are to be met from disinvestment proceeds.
Chief Economic Advisor Kaushik Basu, a professor at the Cornell University in the US, joined the finance ministry in December 2009 and got a fair chance to work on the 2010 Budget. This time he has been involved from the beginning.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Chiefs of the two boards of the revenue department - Central Board of Excise and Customs (CBEC) and Central Board of direct Taxes (CBDT) are also not new to the Budget-making process. CBEC Chairman S Dutt Majumder and CBDT Chairman Sudhir Chandra were members on their respective boards and worked in that capacity on the last Budget.
G Parande, member (Budget), Shaktikanta Das, joint secretary (Budget) and other officials in the Budget Division of the department of economic affairs will provide the link between all the related departments and ministries.
In the Tax Research Unit (TRU), joint secretary Vivek Johri will provide the continuity, while another joint secretary V K Garg, who replaced Gautam Bhattacharya, will be a new member in the team.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Their inputs will not only be required for doing the tax calculus but also to ensure that the Budget proposals consider a smooth introduction of the GST regime.
On the direct tax side, the ground work has been done by joint secretaries Ashutosh Dixit and Sunil Gupta.
Direct tax proposals are expected to be in line with changes that are being planned as part of the DTC.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Key challenge for the FM The key challenge for the finance minister's team will be to come up with a Budget that addresses the problems of high inflation without compromising on growth, keep on the path of fiscal consolidation and formulate tax proposals keeping in mind the introduction of Direct Taxes Code (DTC) and Goods and Services Tax (GST) next year.
Additional revenue generation for keeping fiscal deficit on track would require new initiatives as next year there will not be any window like the one this year presented by 3G auctioning.
Black money tax immunity scheme and disinvestment, both, can generate additional resources but political acceptance will be a major challenge here for the finance minister.
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FM's mission: A people friendly Budget
Last updated on: February 28, 2011 09:23 IST
Support to the flagship schemes is a must, but Mukherjee will have to move beyond just providing money for them as he has to tighten expenditure management and also kickstart big-ticket reform measures for taking the growth rate to double digit.
Exiting the stimulus completely is a tough task for him as despite his indications for the same, a section of the industry feels that excise duty should remain at 10 per cent.
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