By Dr Shankar Acharya, Former Chief Economic Adviser to Government of India
It is a good Budget. I rate Arun Jaitley's Budget as good. Lot of things he mentioned sounded good. He has also given a forceful direction to 3-4 things. Fiscal consolidation has also been taken into account. I like sort of the idea. Bump up the general rate of taxation like services etc. But I am slightly worried about one thing. The services tax has gone up to 14% and the Excise tax is 12.5%. To my mind, it raises the important potential problem when we move to Goods and Services Tax (GST). We don't differentiate when we move to GST. The tax will be the same for all. The gap of 1.5% worries me, when Jaitley wants to move to GST, next year.
I am worried about accident insurance initiative. Rs 12 a year and Rs 1 per month. But it needs huge money. Not so easy to implement it successfully. It can make a big hole in the treasury.
I would like to say that the current Budget is a very rich, challenging, legislative agenda laid down by him Arun Jaitley. I would like to mention 8-9 legislative agendas mentioned by Jaitley in his Budget speech.
For example, Monitary policy bill is a good agenda. But, it needs Constitutional approval and RTI changes etc. The Bankruptcy Law again. He has also suggested unified market for agriculture. He has proposed new laws for black money and laws on Indian financial code.
These are all really good, challenging agendas. But, if is not done well, it could end up as bad. That is my worry. But, overall there are many good things in it.
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