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Wednesday, Feb 06, 2002

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Economy first

It is Budget time again. Various trade bodies and business lobbies are giving voice to pre-Budget proposals to seek benefits and improve the economy. However, Mr Sinha must ignore the pressure, slogans, ideologies and political compulsions, and present a Budget that concentrates on improving the quality of life.

Farmers may ask for increased subsidies but it would be better to offer them remunerative prices. The middle-class may ask for the ceiling on taxable income to be raised. However, they must be given incentives to save. Exporters may ask for more subsidies but they should be given incentives to invest in R&D and quality systems. SSIs should not be treated as orphans but be considered as employment-generating enterprises.

Economists may advice the Government to control revenue expenditure by downsizing the bureaucracy. Each Budget has narrowed the gap between the honest rich and the poor and widened the gap between the dishonest rich and the poor. Tax evasion has corrupted our entire society, and the honest tax-payer is at the mercy of his chartered accountant to help him wade through the complex tax net. Hence, the procedural hurdles of taxation should be removed to simplify the taxation system.

The 2002-03 Budget need not be populist, but it should be one that uplifts the investment mood in all areas of the economy.

Sushil Mehra

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