Need a long-term vision

Why does the Budget in India evoke so much hype and expectation? Normally, it should be regarded as a routine annual accounting exercise, as in many other countries.

- V S KRISHNAN

The reason for this difference in India lies in the reforms of the 1990s when the Budget became a medium for announcing widespread policy reforms and signalling medium- and long-term priorities.

In this Budget, the emphasis was more on programmes than on policies, reflecting the government's serious concerns about employment, especially youth unemployment. The priorities outlined by the government sought to address this area in many ways. What was gratifying, however, was that the government continued to signal its commitment to fiscal prudence by keeping the fiscal deficit as a percentage of gross domestic product or GDP at 4.9 per cent for the current fiscal year (against the target of 5.1 per cent) and promised to reach 4.5 per cent next year.

On the taxation side, both for indirect and direct taxes, the approach has been to simplify procedures and slowly phase out the multiplicity of schemes and exemptions. The other priority area has been to reduce tax litigation. In this endeavour, the value limits for filing appeals in the legacy tax cases on the indirect tax side like excise and service taxes has been enhanced. Priority has also been accorded to digitisation of taxpayer's services so as to make the tax payment experience less stressful.