FEBRUARY 16, 2009

By TIOL Edit Team

IN our TIOL TOP story, we had mentioned, ''In these days of live telecasts and high voltage, high-throated analytical circus, the interim budget is an opportunity for the outgoing government to get some free publicity and make some election speeches. But will the opposition allow it? It doesn’t seem to be fair to commit an incoming government with budgetary liabilities, it may not like to oblige – but everything is fair in love and elections!.'' A sense of fair play prevailed and there was absolutely nothing in the Budget to stimulate the recession ridden economy.

But was it fair play?

Look at a situation - had the Finance Minister announced massive duty cuts and several other sops? The opposition would have certainly not allowed the government to get all the free publicity – there would have been acrimonious scenes. And there is another important point. The UPA majority in the Lok Sabha is not really a certainty, with oscillating political affiliations and so, it was doubtful as to whether the Vote on Account would be passed at all. The Finance Minister had in a brilliant political scheme administered the most shocking medicine to the Opposition; Now they have nothing to complain; can you complain against nothing? So the Vote on Account will be passed; Parliament will be adjourned and AND then the Government will work.

After all for giving exemption from Customs and Excise Duties and Service Tax, the Government does not really need Parliament. This can be done by notifications, which you can surely expect in a couple of weeks.  The poor government will be forced to bow down to public demand and reduce the taxes. This they can do without the opposition making things difficult in Parliament.

As per Section 5A of the Central Excise Act,

Power to grant exemption from duty of excise.-  (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon:

There can be public interest at any time and maybe preferably when Parliament is not in session and then you can’t really find fault with the government for trying to help stimulate the economy.  Economics is all about politics and this was political economics at its best. Presenting one of his budgets, Dr Manmohan Singh had once stated, “Voting the Congress is not only good politics, it is also good economics”. Economist Manmohan has proved that he is an astute politician!

And maybe voting such an economist back to power is sensible politics as well as economics.

Let’s wait for those notifications before the elections.