The announcement of a string of populist measures in the interim Budget has been accompanied by a breach of propriety associated with the exercise ahead of the general election, say opposition leaders, former officials and independent experts.
While the opposition Congress accused the government of “trampling on time-honoured conventions,” independent experts also concur that Finance Minister Piyush Goyal expanded the scope of the interim Budget in an unprecedented fashion.
Friday’s interim Budget is being questioned on grounds of propriety for the significant changes in the tax code that it proposes and the retrospective effect of a welfare measure that would kick off from the current financial year.
Mr. Goyal announced an income transfer scheme of ₹6,000 a year for farmers with land holding of two hectares or less, effective from December 1, 2018. He also said he had allocated ₹20,000 crore for this in the current financial year itself. The payment is to be made in three tranches through the year of ₹2,000 each.
“The farmers’ scheme has been made effective from December 1, 2018,” former Finance Minister P. Chidamabaram told The Hindu. “How is that possible? I think it is a clumsy attempt to escape the scrutiny of the Election Commission when they transfer ₹2,000 in March!”
‘Only 5 full budgets’
“A government is entitled to present only five Budgets, one a year,” Mr. Chidambaram said. He added that the sixth one is conventionally a vote on account to prevent a government shut down during the period from the end of the financial year to when the next government presents its Budget.
“The present government has taken liberties with this,” the former Finance Minister said.
“According to me, they have breached convention. They have presented a full-fledged Budget, which I think is wrong. Secondly, they have made major amendments to the Income Tax Act, which is again unprecedented. If all this was necessary, why was it not done last year or the year before?”
Tax analysts said there were changes made to the Income Tax Act in previous interim budgets also, but that they were small in nature. In contrast, the change in the Income Tax Act resulting from the announcements in Friday’s interim Budget is one of the main decisions being touted by the government.
Apart from the announcement itself, the manner in which Parliament handles it could be another breach of convention, according to a former Finance Ministry official.
”One matter that is to be looked out for is whether the changes to the income tax will be referred to the Parliamentary Standing Committee on Finance before the Income Tax Act is amended,” former finance secretary N.K. Singh told The Hindu. “The convention is that it is [referred], but it is up to Parliament to decide whether or not it should be.”
Union Minister Arun Jaitley, in a blog post and later in a TV interview, said the precedent for tax changes in interim budgets was set in 2009-10 and 2014-15, but did not offer details.
‘Govt. intent exposed’
“The government’s real intention is clear from the decision to begin this scheme retrospectively and to pass on the first instalment within this financial year,” said Swaraj India president Yogendra Yadav.
“It’s a clear attempt to dodge the model code of conduct … It is a double insult that the government expects to get farmers’ votes so cheap. Farmers will surely reject this dishonourable bargain.”
He added that the exclusion of tenant farmers, landless cultivators and Adivasi farmers was troubling.
‘Lacks innovative ideas’
The Opposition parties slammed the interim Budget presented by Prime Minister Narendra Modi government, claiming it was nothing but an election manifesto and the income support for small and marginal farmers promised under the PM Kisan Yojana makes mockery of the farmer’s distress.
DMK MP Tiruchi Siva said, “All these years they never made such announcements. When the farmers were agitating here for a year or so no one came to spoke to them. All these announcements are focussed on elections,” he said.
The agriculture sector needed a major intervention but the government has announced a paltry sum of ₹17 per day to farmers, RJD MP Manoj Jha said. “I thought at least in the last year this government will come with some kind of innovative idea,” he added.
Biju Janata Dal, while applauding the Budget, said ₹6000 per annum income support announced for farmers is highly inadequate. “I would have been happy if the amount was ₹10,000 to ₹12,000,” he said.
The opposition leaders also questioned whether the announcements made are backed by budgetary support.
Telugu Desam Party leader Y.S. Chowdary said the PM Kisan Yojana “is a blatant copy of what the Telangana government is already offering.”
CPI(M) General Secretary Sitaram Yechury said the announcements show Modi government’s disconnect with the people. “It is a testimony to the BJP’s fear and desperation about what that verdict of the people might be that it has sought to use the interim Budget to make promises that are not for it to make” he said.
CPI leader D. Raja said the Budget “is an exercise to cover up the failures of Modi government.”