Omprakash:- Tax exemption limit has been increased from 1.8 lacs to 2 lacs only. I am somewhat disappointed. Excise duty has been raised. So are some other service taxes. It means that automatically, the prices of the daily commodities will increase.
Narayanan:- Boss, don’t look this Budget of 2012-13 as a budget of aam-aadmi. Look at it from an angle of Indian economy. If we look at the budget with reference to the global economy, then economic growth becomes the topmost priority at present. But, that does not mean that we will allow our farmers to commit suicide or there will be no inclusive education.
Shabnam:- Yeah! That’s why; our Pranab Mukherjee has given some emphasis on education and agriculture sectors also. But, I don’t understand one thing. On one hand, you want to pass the Food Security Bill and on the other hand you want to reduce the fiscal deficit to 5.1%. How is it possible?
Arindam:- The ‘FFF’ factor is a pain for UPA-II government because of the poor IIP in recent times. That’s why; Indian government is trying to reduce the subsidies on fuel, fertilizer and foods by a marginal percentage.
Narayanan:- Accha, what about the expenditure on social sector schemes. 18% of our treasury goes to that only.
Rangabati:- See, actually, expenses on social sector schemes is not the real problem. The real problem is where the money is actually going. That’s why; this time, Pranab Mukherjee wants to form a strict monitoring cell to ensure that the money getting out of treasury for social schemes should reach the real beneficiaries.
Omprakash:- But, I don’t think that the fiscal deficit will remain within 5.1%. It may easily cross 6% because on the other hand in the name of marketing of future long-term economic reforms, Pranab Mukherjee also talked about investments and indirectly generating the demand for investments. Real Estate sectors may not be too happy with this budget, but, surely, the new economic reforms will provide some booster for the Housing Finance sectors by 2014.
Shabnam:- When almost everything becomes dearer after the budget, how the common people of India manage to handle the situation!
Arindam:- Shabnam, let me give you a small example. Say, you are earning 50,000 bucks per month and I am earning only 15,000 per month. Now, if a dabbawala sells you a vegetarian meal at 100 bucks, you will buy it, but, I will look for other alternatives to have a vegetarian meal at 50 bucks only. When the dabbawala is getting a customer who is giving 100 bucks for a vegetarian meal, will he ever reduce the price of food? The answer is a big no. So, indirectly, inflation is increasing. Now, after the budget of 2012, even rich people will start doing personal fund management. They will start negotiating and bargaining while buying any product, because everything has become costly for them also. Therefore, now, you will start bargaining with the dabbawala to give you the vegetarian meal at 70 bucks instead of 100 bucks. I may now increase by budget for a vegetarian meal to 60 bucks as everything has become costlier. So, at your end, you are not giving any room to increase the inflation and at my end, I am increasing my purchasing power. Therefore, when the purchasing power of a person and the inflation comes closer to each other, it creates the platform for economic growth, which has to be capitalized by RBI with their tools of Bank Rate, SLR, CRR, Repo and Reverse Repo Rates.
Omprakash:- Yeah! To some extent, I agree with Arindam, but, another thorn for UPA-II is the uniform taxation system on goods in India. All states should have uniform taxation system on the goods that are to be sold. That will be a healthier approach for the economic growth.
Narayanan:- Anyway, I will regard the “BUDGET 2012” as a balanced budget where the subject of economics became a painful medicated syringe for the subject of politics, but, believe me, to cure a patient (i.e. Indian economic growth) from a swine flu (i.e. Global recession), you require medicines (i.e. good and strict economic reforms) from the Central Government Hospital (i.e. Finance Ministry of India). The doctor (i.e. FM, Pranab Mukherjee) just gave the medical prescription (BUDGET 2012-13) only.
