Can the government reduce duties on petroleum products and look for other sources of revenue ?

It's possible if the government shows the will. Taxes on petrol and diesel is a cash cow for both the central and state governments. Apart from newer areas of revenue, even if collections on existing taxes improve it would make a world of difference. Tax deducted at source (TDS) on salaries is the easiest way that the government collects taxes. Similarly high tax on petroleum products is the easiest way of raising revenue. Reducing taxes in this sector will have an immediate impact on costs and inflation.

While the automobile sector is growing, adding to pollution, congestion and more consumption of petroleum products, should there be higher tax on big cars, diesel cars etc. ?

There is already a higher tax on cars beyond a certain engine size. Higher tax on diesel cars has been discussed but there has been no consensus. Also, in diesel vehicles there are also what are called utility vehicles which are used for rural and semi-urban transportation. Increasing excise on cars is resisted by auto makers and also the country still does not have an efficient public transport system, so the need for individual vehicles is acute. In Western countries, there is congestion tax, tax on entry into the city, tax on entering certain crowded parts of the city etc but then they also have alternative commuting systems.

Isn't it time for the government to impose Agriculture Income Tax ?

Yes. The rich farmers who can afford swanky cars and other luxuries can certainly pay tax. It's been a political hot potato for so long that nobody wants to be the first one to disturb the status quo. Every time this demand is raised, it is called anti-farmer, when actually the small farmer has nothing to do with it. It has long been suspected that politicians, bureaucrats, contractors and industrialists are the ones who show the highest income from 'Agriculture'.

Is it time to bring back Estate Duty or Inheritance Tax, done away in 1985 ?

The Estate Duty or Inheritance Tax continues to be levied in the United States and several other countries. And with the number of Indian millionaires and billionaires rising every year, and the richest Indians building 31-storeyed houses for themselves and hosting children's weddings at the Versailles Palace outside Paris, it certainly is time for bringing it back. The philosophy is that wards of the rich should not start with too much of an advantage over others. Imagine how much the Ambani brothers would have paid as Estate Duty when they inherited the property left behind by Dhirubhai Ambani ? It is also because of the high inheritance tax that so many American billionaires give their wealth away to charity.

What are the sources of revenue for the Union government ?

Last year the Union Government's Gross tax receipts were 7.46 lakh crore.

Is the government's expenditure on social sectors adequate ?

Last year the budget outlay for the social sector was 1.37 lakh crore or 37 per cent of the total outlay. 25 per cent of this was earmarked for rural infrastructure. School education had an outlay of Rs 31,000 crore covering SSA and other schemes. The Government outlay on Health was Rs 22,000 crore. NAREGA, the rural employment guarantee scheme, took away Rs 40,000 crore while Bharat Nirman was allocated Rs 48,000 crore. The problem continues to lie in implementation, delivery and corruption.

How much does the government spend on subsidies ?

Food, fuel and fertilizer subsidies cost the government Rs. 1.08 lakh crore last year. Fuel subsidy cost Rs 3018 crore, food Rs 55,578 crore and fertilizer Rs 49,980 crore.

Can the Budget or fiscal measures help retrieve India's black money worth billions of dollars stashed away in secret Swiss Banks and 'tax haven' islands ?

With the outcry over the black money issue, some announcement is more than likely. The government has already set up a committee and yet another amnesty scheme appears to be on the anvil. But this will be a tax on honesty because the corrupt are being invited to regularise their black money by paying a certain penalty and taxes. The government would argue that it would help recover assets and revenue, which are currently 'lost' to it. The government has also signed tax information exchange agreements with several tax havens. The problem is most of the money went out when the tax regime was very harsh and the economy was closed and most of the black money would in probability be stashed in benami accounts under fictitious names.

Onion prices may have come down, but food inflation continues to be high. What can people expect from the finance minister ?

The government has flagged inflation as the main problem facing the economy. Inflation is tax on the poor as it erodes his income. The government is following a tight monetary policy and raising interest rates to curb it. In addition, it is putting in place a inflation monitoring mechanism and also telling states to act to remove bottlenecks in movement of produce from the farms. It has also identified several reforms in agriculture including improving storage, warehousing to cut down on wastage of farm produce. It has also advocated greater capital investment in agriculture. There are also indications that FDI in retail may be opened as the industry logic is that it will set up the back end for storage and movement of farm produce.

The 9% growth story appears tailor-made for industries and the rich. The poor are still getting poorer. Is any remedy in sight ?

Though there are gaps, benefits of growth are reaching the people. The issue is how fast and how inclusive the growth is. That is why the government is now all the time talking about inclusive growth to tell the people that it is not limited to just the rich section of society. With growth and opening up of avenues of information, people are also getting impatient. Not leaving everything to the percolation of riches to the grassroots, the government is going ahead with several direct welfare schemes like NREGA to transfer state support to the grassroots.

Compiled by Sanjeev Sharma.
Cartoons by Sandeep Joshi

Total Expenditure
11.8 lakh crore

Gross Tax Revenue
7.46 lakh crore

Non-tax Revenue
1. 48 lakh crore

Net Borrowing
3.45 lakh crore

EMPLOYMENT GENERATION : With an estimated 10 million young Indians joining the workforce every year ( the entire IT and hi-tech industries in the country employ less than 2 million people), there is growing concern over job creation. India needs to give a boost to manufacturing and more labour-intensive industry, which will require more power, better roads, more efficient ports, more progressive laws and doing away with archaic rules.

INFRASTRUCTURE : While China has taken giant strides in developing infrastructure during the last 10 years ( it built 25,000 'miles' of expressway as compared to 3,700 miles by India during the same period ), India has a lot to catch up with. Mere allocation is not enough. Last year the budget set aside Rs 1.73 lakh crore for infrastructure development and announced the ambitious plan of laying 20 Kms of National Highway every day. The goals are yet to be achieved and projects are running behind schedule.

FOREIGN DIRECT INVESTMENT : When Intel chose Vietnam over India for setting up a chip manufacturing unit, people in India were surprised. But then foreign investors are turning away because of our "revolving door democracy" in which endless discussions, multiplicity of authorities, bureaucratic control, culture of bribe are institutionalised. Transparency International estimates that Indians truckers pay $5 billion every year as bribe, mostly to policemen.

HOUSING & REAL ESTATE : Houses need cement and steel. And a boost to this sector is expected to give an impetus to these sectors too besides fulfilling a basic need. As much as 15 per cent of the country's urban population are estimated to be living in slums and 35 per cent apparently live in single-room dwellings. There is no estimate about the homeless urban population but the numbers are bound to be high. Affordable housing in rural areas also remain a pipe dream.

AGRICULTURE : Middlemen continue to corner the biggest pie from agriculture produce. The manner in which prices of onions came down from Rs 80 a Kg to Rs 10 a Kg in a matter of three weeks, proved that the high prices were not due to the supply-demand mismatch. Farmers continue to suffer from low prices; farm loans are still high for them and the bottlenecks in getting inputs, storage and marketing the produce remain. As much as 40 per cent of the country's farm produce is estimated to get lost every year due to these factors.

THE MIDDLE CLASS : The concerns of the salaried class remain centred around Personal Income Tax slabs, LPG and Petroleum prices and food inflation. There is a strong case for raising the Income Tax ceiling from the current level of Rs 1.60 lakh so that people at the bottom of the pyramid are cushioned from inflationary pressures. The first slab needs to be raised substantially but chances are that the FM will raise it by Rs 20,000 or so !

EDUCATION : The economy will require an ever-increasing number of skilled and employable young men and women. But despite ambitious plans and the Right to Education Act, " Free, good, uniform education for all" has made no headway. Government schools need to be brought on par with the best private schools for the plan to succeed.

REGIONAL IMBALANCE : Despite a high rate of growth, fuelled unexpectedly by a robust performance by the Agriculture sector, regional disparities have grown, giving rise to 'Areas of Darkness' like Malkangiri in orissa, Gadchiroli in Maharashtra or Dantewada in Chattisgarh. All eyes will be on the FM to see if he addresses this issue at all and how he goes about it.

STRICTER ENVIRONMENTAL NORMS : India's growth story requires stricter environmental laws and yet a balance needs to be maintained between ecology and development. Mining and industry will require more land and forests but indiscriminate mining and mindless export should not be allowed to exhaust the finite resources.