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P. R. Brahmananda

The Budget is Mr Yashwant Sinha's Ten Commandments to the country. With much imagination used in taxing everything from toothbrushes, beauty parlours, cows and Angora rabbits, our Finance Ministerji is on a roll. But the votes are in. With imported onions, LPG and imitation jewellery dearer and home economics being dealt a death blow, Mr Sinha's missus just did not like the Budget. Can we blame her?

THE Union Budget is always the focal point of discussions in the first week of March. In the Budget presented by Mr Yashwant Sinha on February 28, he seemed rather serious and there was not one a humorous aside in his long speech.

The only occasion where he allowed himself the luxury of a side remark was when he came to the increase in the excise duty on sugar. He suddenly added: "By the by I am not a diabetic". He could have added that he raised the price of sugar because he wanted the incidence of diabetics in India to fall. We are supposed to be a nation of sweet-lovers. But, somehow, the sugar in our mouths is not getting reflected in the talks between the leaders of political parties!

Mr Sinha went on to levy high taxes on kerosene and LPG. He did not remark: "My wife cooks without kerosene and LPG!" He seems to have said later that his wife also disliked the Budget. One can understand the reason. In the old days economic textbooks developed demand theory by referring to purchases of kitchen items.

Elementary economics was to be learnt by observing how women practised economy in the purchase of food and related articles.

By raising the price of kerosene and LPG, Mr Sinha seems to have taxed all the goods that are competitive with one another in the matter of fuel. He has ruled out any substitution effect.

The rise in the prices of the substitutes will have an income effect and following the Giffen paradox, people should eat more items that are not cooked with the aid of kerosene and LPG!

In the US, more families prefer to eat out than cook at home. This might happen in India too and Mr Sinha might be popularising imported cooked food items! The Left should criticise him for indirectly encouraging MNCs, even in the matter of food items.

One can understand why Mr Sinha has raised the Customs duties on onions. The price of onions is on a downward drift at the moment. If one has to bring tears to one's eyes, home produced onions are preferable to the imported varieties.

That must be Mr Sinha's logic. The Swadeshi Jagaran Manch should shower him with accolades. Mr Sinha has levied special additional Customs duties on "cows, heifers, bulls, goats, sheep, pigs, angora rabbits, ducklings and pureline poultry stock". He might remember that John M. Keynes, while he was in India Office, was entrusted with the responsibility of exporting bulls to India (refer to Anand Chandavarkar's book on Keynes and India). Had Keynes lived and the Raj continued today, probably, Keynes would have been rendered more idle at the India Office!

Remember also that the India Office had so much work that John Stuart Mill could write his tome on History of India during office hours. Keynes also wrote Indian Currency and Finance, probably during office hours at the India Office.

It was said that the India office was a classic case of disguised unemployment to bright British youths who were employed therein. But, then, some of the latter produced great writings.

Hence, their social productivity was positive, whereas their productivity in the office was probably negative!

It is said that the Delhi Secretariat, as others in India, has huge disguised unemployment, but alas nobody has produced any classics such as those by Mill and Keynes.

It is said that in secretariats in India, they do not even push files without consideration. In the long run, the files are meant to be consumed by the rats.

In the West Bengal secretariat, it is said, the load of files is so huge and the rat population so large that the authorities have to house 10,000 cats to catch the rats.

That is why computerisation is being resisted — for the consideration of the well-being of rats and cats! Nobody has done a census of the rats yet.

Why Mr Sinha should have increased the excise duty on toothbrush, imitation jewellery, table and kitchenware glass, candles, electric bulbs, watches and clocks — up to Rs 500 a piece — beats the imagination. Mr Sinha is known to have strong teeth — thus his readiness to bite the bullet. But others may not be so endowed.

Should he not have been compassionate to them? When Bernard Shaw was told about the British Lion, he said with typical Irish humour: "Let the British Lion show its teeth to the dentist first". I am sure Shaw would not have approved of the higher excise duty on toothbrush. Why Mr Sinha should raise the excise on candles cannot be comprehended.

Perhaps he thinks that the power shortage would continue in India indefinitely, so why not use the occasion to fill the exchequer!

He probably does not know that in most places in India, and in Bihar itself, children read by the candlelight.

But, then, why should he raise the duty on imitation jewellery? I do not know how the excise department can distinguish between gold, silver and imitation jewellery considering that it is so difficult to distinguish between real and false teeth or true and imitation godmen! Mr Sinha has extended the coverage of the service tax. He has included "event management, rail travel agents, beauty parlours, cable operators, etc" in the list of new items subject to service tax. In the West, conferences and such events are wholly managed by event managers to whom lumpsum amounts are paid.

This is becoming common in Delhi, Mumbai and other cities. Suppose an event manager takes care of all post-Budget TV shows, conferences, etc, will the Finance Minister bear the service tax charges?

Will the Election Commission, which stages the elections, also be subjected to the service tax? Probably, only commercial event managers are subjected to the tax.

But, who says the election processes do not lead to money making all around? Why are only rail travel agents subjected to the tax? Why not other travel agents?

What about agents who arrange for gatherings addressed by political leaders?

They also arrange for travel by trucks, trains, etc. Mr Sinha has now dragged beauty parlours and fashion designers into his service tax net. He has not perhaps noted cyber clubs and call centres.

There is one problem in taxing beauty parlours. In the case of many personalised services, individuals can peddle their service to different homes and thus escape the service tax. In the old censuses of India, a sizeable proportion of persons in services consisted of hairdressers, beauticians etc. They were supposed to visit homes that had requested their services.

In fact, though many such services have now taken the form of companies, partnerships, self-employed shops, etc, there is no reason why they should again not become individualised services. Mill introduced the famous theorem that "demand for services is not demand for commodities".

What he meant was services could provide a source for direct employment in areas where capital as composite of commodities was not used, at least not intensively. Services are the most labour-intensive items. By taxing services, we often come in the way of promotion of larger employment. This is an angle that Mr Sinha has to ponder about.

And cable operators? According to the Constitution, entertainment duties belong to the State governments. Cable operators enable the enjoyment of entertainment through TV channels. Should not the State government have the priority in this tax at least?

One thanks God that Mr Sinha has not included `non-official advisers to Finance Ministers', in the list of items for service tax. Perhaps, because he knows that he does not heed their advice at all!

Mr Sinha is going to penalise all those who do not remember their PAN identities when they conduct high value transactions.

PANs have so many digits and it is so difficult for any one to remember his/her PAN at any given moment. Can Mr Sinha remember this in a jiffy? The Income Tax authority has not yet given

SWANs (Swiss Account Numbers). With growing capital account convertibility, SWANs may also be assigned.

Mr Sinha's ten commandments would probably be: "Do not brush your teeth; do not cook; do not shine your table; do not eat sweets; do not freshen up; do not glitter; suffer in darkness; do not keep time; do not save; do not deposit".

Three cheers to Mrs Sinha for disliking the Budget. The country is with her. But then, the test for a Finance Minister is whether he can displease his wife in the matter of taxation.

As Dr Lakdawala used to say: "To tax and to please is not given to Finance Ministers, just as to love and to be wise is not given to humans."

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