The Budget 2010-11 presented by the Finance Minister Pranab Mukherjee on Friday in the Parliament has brought much needed relief to the salaried class of people. But it has disappointed the ordinary citizens as the impact of hike in fuel taxes is going to get reflected in the shape of further increase in prices. The hike in taxes on fuel is going to have cascading effect on prices of all types of commodities. The costs of food and other essential commodities as a consequence of the hike in fuel prices is going to impact every Indian, more so the ordinary souls, who will have to struggle further for their survival. The Finance Minister while doing some manoeuvers for balancing has failed to spare fuel for additional taxes even as global oil prices are stable and there has been no major hike in these during past several months. The government did not bring down the fuel prices when there was a visible glut in oil prices and offered some relief only after a long time of the crash in oil market. By holding on to the higher oil prices the government could help the country’s economy to overcome the difficulties created by the global recession. Yes, there were not many lay offs as were witnessed elsewhere in the world. And now it has once again brought the oil prices to the same level without any plausible reason. The hike has come at a time when the government has been again and again reassuring people about the prices of foods coming down in a foreseeable time, but, now it appears to be in the suicide mode. The expert opinion of the impact of hike in fuel prices going to be to the extent of 0.43 % has not many buyers. The hike has united the opposition which has already started training its guns at the government. On the other hand most of the coalition partners of UPA government are also feeling uncomfortable with the price hike. The CPM has termed the strategy of increasing indirect taxes, especially on diesel and petrol, to meet budget deficit as flawed saying it would hit poorer sections. The party has termed it as anti-people which will further fuel inflation in the backdrop of an already high food inflation rate of 20%, demanding that it be withdrawn. Similarly DMK and Trinamool Congress, two key allies of UPA government have demanded rollback of the budgetary proposal. The budget has some good news for the people as it has been proposed to spend 223 billion rupees on healthcare, 310.36 billion rupees on schools, 12.7 billion rupees on slum rehabilitation, 1.74 trillion rupees on infrastructure projects, 198.94 billion rupees on roads and 661 billion rupees on the rural sector. Further it has been proposed to allocate 51.30 billion rupees to the power sector, and to spend 10 billion rupees on renewable energy. Along with it the government has proposed to set up a fund to promote clean energy. All this would have a definite positive impact on our economy and further improve standard of life. However, the government has once again showed its lack of appreciation for the need to boost agriculture production. It has proposed to invest just four billion rupees to boost farm output in east India; some farmers will get loans at a low interest rate of 5%. It is a welcome step to make more investments in agriculture in Eastern states but that is not going to change the complexion of the farm sector in whole of the country. If the government wants to ensure food security for its people then agriculture has to be afforded special attention by way of more investments in research, subsidizing the agricultural inputs, on affording support prices to agriculture products and introducing crop insurance on an uniform pattern throughout India. The opposition needs to understand that the salaried class is not an affluent class and the relief given to them is something they deserved. Whatever relief the 6th pay commission afforded them was neutralized by the unprecedented hike in prices that caused holes in every pocket. The appearance of a fat salary received by a public servant is nothing but a ruse in view of the market prices. The country needs to go in for expenditure tax instead of income tax that would help the country to put a stop to spiraling prices. Should it be difficult to switch over to such a tax system, then the least that needs to be done is to simplify tax returns and procedures that would go a long way in mopping up resources as more and more people would be voluntarily coming forward to pay taxes.
Lastupdate on : Sun, 28 Feb 2010 21:30:00 Makkah time
Lastupdate on : Sun, 28 Feb 2010 18:30:00 GMT
Lastupdate on : Mon, 1 Mar 2010 00:00:00 IST
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