Much more lies hidden in fine print

The Union Budget speech for 2017-18 has stated many noble intentions.  To comment on the fiscal and operational feasibility of translating these intentions into action, one needs patience to dig into the figures of the documents accompanying the budget speech.

The Finance Minister has stated that there has been in 34 percent rise in tax collection as a result of demonetisation.  But the Receipt Budget details in web site of the Finance Ministry (finmin.nic.in) reveal that the Revised Estimate of Personal Income Tax for 2016-17 is downwardly revised to Rs 3.26 lakh crore from the Budget Estimate of '3.28 lakh crore. Corporate Tax Revised Estimate for 2016-17, at '4 35 lakh crore is a meagre increase of 3.01 percent over the actual of 2015-16 at '4.22 lakh crore. The rise of 37 percent has been in Excise Duties, which has benefitted from taxes on oil and has little to do with demonetisation.

Had demonetisation brought in huge unaccounted money from parallel economy to banking channel, the direct tax figures should have showed up differently. In this budget speech, there is an official admission that there is substantial tax non-compliance and the Minister sought to substantiate this with official data.

This is obviously disturbing and affects the capacity of the state to intervene in social sector. It is pertinent to note that Income Tax Act, 1961, already has deterrent provisions to disallow even genuine cash payments above Rs 20000/-.

This budget has reduced these limits to Rs 10000/- for business transactions and Rs 2000/- for donations to political parties. The efficiency of implementation will be known only after a time lag.

When we turn to the spending in social sector, MNREGA, the flagship National programme has been allotted Rs 48000 crore, which is a measly increase of 1.05 percent from Rs 47499/-which is the Revised Estimate for 2016-17. It would be welcome, if this allocation is also increased during 2017-18, as was done during the current fiscal year. The allocation for Umbrella Scheme for Scheduled Tribes, Minorities and Scheduled Castes, which form the 'Core of core' in Centrally Sponsored Schemes has risen by 4.74, 2.95 and 4.71 percent, respectively in the Budget Estimate. This clearly implies stagnation in real terms.

Likewise, the allocation for 'Green Revolution' has seen a decline in the Revised Estimate for 2016-17 by about Rs 1900 crore from the Budget Estimate. There is also a similar decline of Rs 700 crore and Rs 500 crore in Pradhan Mantri Krishi Sinchai Yojana and 'Per Drop More Crop scheme' respectively. These go against the grain of doubling farm incomes by 2022.

In the educational sector, there are laudable initiatives like proposed National Testing system for conduct of entrance examinations and grant of more autonomy to institutions. But the present scheme of granting accreditation needs to become more transparent.

The budget speech has covered social, educational and agricultural sectors well. But much more lies hidden in the fine print. Unless this is seen, it would amount to missing the woods for trees.

(R. Mohan is former civil servant)