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19 Mar 2012

A budget at war with the Finance Minister

The Hindu : Opinion / Op-Ed : A budget at war with the Finance Minister: "A huge hike in indirect taxes will cause a fall in both savings and consumption, achieving the opposite of what was intended."

With revenue deficit (4.4 per cent of the GDP) and fiscal deficit (5.9 per cent) hitting the roof, the Finance Minister seems to have turned to chartered accountants for ideas to make his balance sheet appear less inelegant. The result is the innovation of “effective revenue deficit,” which bears the stamp of some multinational accounting firm rather than our conservative civil service.

There are more positive signals in the Finance Minister's speech than in the budget proper. Finance Minister has declared that the government is committed fully to providing for food subsidy even if it cannot afford it. Yet, he has not provided a single penny for the food security project!

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