M A I L B A G

Budget a good example of public finance

The Union Budget for 2005-6 is second to none as it is in tune with established principles of public finance. It will give a boost to savings and investment culture which, in turn, will help achieve higher growth.

Union Finance Minister P. Chidambaram has been successful in enhancing the credibility of the budgetary process. The cash transaction tax on bank withdrawal of Rs 10,000 and more is a bitter pill to kill the ills of the Indian economy and hence must be tolerated in the national interest. It should not be rolled back under political pressure of any kind.

The postponement of fiscal consolidation will not be in the interest of economic reforms. The Budget proposals are partially in tune with the Kelkar Report. However, it remains to be seen how these would be implemented on the ground to promote efficiency, sufficiency and equity in the economy.

The Budget is silent on checking corruption in the delivery of services on which the common man will have to pay service tax. The provision for agriculture will facilitate rainbow revolution in this critical sector. The encouragement for FDI will reduce the prevailing coefficient of distrust.

Prof M.M. GOEL, Dept. of Economics, Kurukshetra University, Kurukshetra

II

The income-tax payers feel elated. However, the euphoria over tax exemption limit will vanish if one has a close look at the proposals. The salaried persons have little to be happy. The standard deduction, rebate under Section 88 and deduction under Section 80L have been abolished. Now an employee can defer the payment of tax on an amount of Rs 1 lakh by investing it in various schemes. But he may have to pay at higher rates at the time of redemption of this amount, as it will be added to his income.

The senior citizens will be big sufferers. At present they are given exemption of Rs 20,000 in the accrued tax but from the next financial year, they will be able to save tax up to Rs 5,000 only. Most of them depend on the interest income. Now this income will become fully taxable with the abolition of Section 80L. The women employees will also be able to save only Rs 2,500 instead of Rs 5,000 which they save at present.

Mr Chidambaram has administered a bitter pill, sugar-coated though, to the salaried class and pensioners.

TIRATH RAM SHARMA, Pathankot

III

With the proposal of IT exemption from Rs 50,000 to Rs 1 lakh, senior citizens feel badly cheated. From Rs 20,000 tax relief plus Rs 30,000 standard deduction and Rs 12,000 relief on bank interest, the denial in lieu of enhancement of basic exemption is a big shock to this neglected section of society.

Though more and more care projects are coming up in developed countries, the Government of India is doing exactly the opposite: it has started denying the elders even the benefits already extended to them.

The members of Parliament are aware that senior citizens cannot launch an agitation in support of their rightful claims and demands. I appeal to the Government to be sympathetic towards elders. MPs too should champion our cause in Parliament.

Capt (Dr) MOHINDER SINGH, Patiala

IV

The Budget is more or less progressive and will help the common man. It will help the salaried class from the tax burden by giving them more money. This will help the economy in the long run. Mr Chidambaram has also been kind towards the senior citizens and women.

The Budget, if implemented in right earnest, could prove to be a big step forward in the reform process. But the tax on withdrawal is ridiculous. It gives the impression that Mr Chidambaram has lost the confidence of his officials to curb black money.

SIDDHARTHA RAJ GUHA, Jabalpur (MP)

V

As a 72-year-old Defence Services civilian pensioner, I feel pensioners have been neglected in the Budgets of both last year and this year. The Budget should have provided full medical facilities to all Central Government pensioners throughout India on equity basis as per their entitlement as some pensioners are more equal than others; and recommendation for a Sixth Pay Commission.

ONKAR SINGH RIAR, Sun Valley (Nevada, USA)

Professional courses ignored Sometime back, the prospectus for B.Ed Entrance provided some combination of subjects. Surprisingly, however, professional courses, though taught in all schools, were not included in those combinations. This is inexcusable because President A.P.J. Abdul Kalam and Punjab Governor General S.F. Rodrigues have been stressing the need for more and more professional courses to solve the unemployment problem to a great extent. The B.Ed Entrance will have to include all the professional courses taught in the schools. KULDEEP RAI DEEP, Advocate, Chandigarh