With the anticipation this budget had generated, I think it should have generated highest TRPs for News channels, coming closer to what it was on the L.S General Elections results day. Everyone I spoke to this morning was glued to T.V or live blogs on internet giving commentary on the budget speech. #Budget2015, #SuperBudget, #BreakoutBudget were trending on twitter and Facebook. Thankfully, we had a cricket match with a weaker team and it wasn’t so tempting to skip budget.
The skyrocketed expectations seemed to me like Sachin was to come out to bat on deadly bouncing wicket after a quick fall of 2 wickets in a Test match. Mr. Jaitley much like Sachin, took the guard to begin the speech, he looked pale and weak, with this chronic backache yet delivered the speech with enthusiasm. No wonder, he was looking ill, he seems to have worked very hard to pull off a competitive budget, and hands down has beaten the seasoned experts and economists of previous govt like our former PM Manmohan Singh and P.Chidambaram in his maiden full year budget.
Budget, on many fronts was not just a regular budget but a vision statement for years to come with some exquisite shots like Sachin, smart moves like Dhoni, and equally balanced with the classical touch of Dravid.
Let me take the leverage to explain the announcements comparing with the style of these cricketing giants.
*In bold and italics *- no offence to fans of these or other cricketing heroes or other sporting giants. Comparison is made to simplify understanding.
Sachin style announcements
1. A bill to go harsh on those who stash/stashed Black money abroad, they will be punishable up to 7 years of imprisonment and 300% penalty on taxes.
It is similar to intellectually honest, and technically strong moves of Sachin, like he answers criticisms with Bat, Jaitley answered the criticism of opposition who were creating ruckus over this with a strong and stringent anti-Black money bill, now they will have to accept and pass the bill which will be introduced in this Budget session of Parliament. Credit goes to NaMo Govt
2. Visa on arrival extended to 150 countries.
Like Sachin tests his innovative style shots, first in scarce, and then goes for them in a full-fledged rigor once perfected. After the success of this project with 43 countries, which brought about a huge surge in visitors count, it has been extended to 150 countries. Well played, Jaitley.
3. Tax free infrastructure bonds for projects in roads, railways and irrigation, to launch sovereign Gold bonds, gold monetization scheme.
Like, India was lacking some world standard batsmen at the time Sachin entered cricket, and he took it up to him to establish himself as the best in the world. This step will strengthen our bond market and slowly help us become at par with world standards or even become better.
4. Setting up of AIIMS in J&K, Punjab, Tamil Nadu, Himachal and Assam; Subsidies for Senior Citizens, Atal Pension Yojana, Nayi Manzil scheme for Minority youth, Mudra Bank for providing credit SC/ ST entrepreneurs and Universal Social security scheme
Sachin equally gets his runs in all directions of the field, and treats all bowlers alike; similarly Jaitley has something for all – minorities, SC/STs, students, pensioners, and that too Pan India.
5. 1000 Cr for ‘self employment’ scheme
Sachin is known for supporting the youngsters and new comers with this expertise in team, so that they would get confidence, similarly, this move is going to help the Start up businesses in all aspects, though there is no plan of action yet, it is expected soon.
Dravid Style Announcements
1. Forward Markets Commission to be merged with SEBI.
After the fraud at National Spot Exchange Ltd in July 2013, commodities market had become speculative of rumors and performance was getting deteriorated. Like Indian cricket was in doldrums and as crowd speculated a break off in team India after the controversy of Chappell and Ganguly, Dravid came forward to assume the leadership. FMC has been put up under a stable SEBI to solidify the Commodities market.
2. 25000 crores for Rural Development fund, raises farm credit to 8.5 Lakh Crore, and a host of measures to support the Ministry of Agriculture’s initiatives
Just like the reliability of Dravid.
While Dravid was criticized for being too slow in pacing his innings, he used to come up with an innings with perfect and classical shots, even if wickets used to tumble on the other side. This announcement is similar to it, with opposition crying and raising slogans, Jaitley shows what his Govt is capable of.
This move will help develop organic farming in India, measures to set up soil labs and NaMo’s initiative of “per drop more crop” will see the light; much reliable move. Well played again.
3.Regulatory Reform Law proposed; distinction between FII and FDI abolished and placed caps.
When Chappell controversy surfaced, experts all around were criticizing Indian team, that, an easy environment wasn’t there in dressing room. When Dravid took over, first thing he did was to make peace with all the conflicts; these steps serve a similar purpose. Recently, Deepak Parekh criticized Govt for still not making much difference in ease of doing business. Though Dravid couldn’t totally bring peace as soon as he took over, it was right step in right direction, now Parekh would also agree that, these steps alone won’t bring about ease in doing business right away, but these are pretty good steps in the right direction.
4. Defense allocation for this fiscal is Rs 246727 Crores.
Just like Dravid is known to be extra defensive and takes extra guards and plays with extra caution, these extra allocations will help us strengthening our defense.
5. Income tax slabs not slashed, but indirectly tax exemption limit slashed to 4.4 L
There is a good old saying in Cricket, if you can’t hit boundaries, rotate the strike. This is exactly what Dravid used to do. When he couldn’t hit sixes, he used to rotate the strike and run so much that, we would end up in getting a good score for the target. Similarly, this may on paper seem like nothing substantial, but it has good potential to increase savings. But , definitely spendthrifts have to cry, like those who wanted to see sixes and fours cried when Dravid batted in ODI.
6. Service tax increased to 14% should be read along with introduction of GST in 2016.
Yet another reliable move, when wickets used to fall upfront, Dravid used to come to strike and absorb the pressure, he would handle the seaming ball with some defensive stroke play and then pinch hitters would come who would start scoring quick runs. Similar is this move, we all know GST is to come, which will bring more revenues but there is going to be a flat 16% rate across the services. Currently service tax which is 12+ % if would have increased directly to 16% next year, would have bought a lot of shock. Just like Dravid used to absorb shocks, gradual increase in service tax would let us absorb the shock slowly.
Dhoni Style Announcements
1. 1000 crores to Nirbhaya fund
Sometimes Dhoni picks bowlers and doesn’t give them full quota of 10 overs and sometimes won’t give them a chance to bowl at all , because of his own strategy known just to him. Along the same lines, though, this amount wasn’t spent in previous budgets, this time instead of some concrete measures for women safety, they have gone again for allocating money to Nirbhaya fund, we need to wait and see how this turns up and how well money will be used.
2. Govt proposes to set up 5 ultra mega power projects, each of 4000 MW
Like Dhoni marshals his limited troops in the field to save and stop leakage of runs, Govt is to set up new mega power projects in plug and play style to stop electricity loss, and to supply electricity strategically.
3. Special Assistance to Bihar and West Bengal, AIIMS like institution in Bihar
Sometimes Dhoni is criticized for supporting players from Chennai Super kings a little too much; similarly this move seems to be a political one, because of the upcoming elections in Bihar and West Bengal, but there is no doubt that these states deserve special assistance for their potential to bring more to the table, just like Raina and Ashwin deserve a place in Team India.
5. IIT in Karnataka ; IIM in J&K and Andhra Pradesh
Pacify everyone equally and give what one doesn’t have.
6. Corporate tax reduced from 30% to 25% for next four years in a phased manner; this should be read with 2% increase in Surcharge.
This one needs elaboration, because this is a very smart move. Like Dhoni brings in Joginder Sharma or Ishant Sharma out of nowhere to bowl the final overs even though they would have gone for runs previously, or when Dhoni places awkward fielding positions to trap batsmen, we would jump up in our seats and say Dhoni has gone mad only to realize that he indeed came up with a smart strategy, and you’d have gone mad at him, only if you didn’t know the intricacies of cricket.
Similarly, this announcement on paper looks like the one which needs to criticized. However if you’re criticizing it as pro-corporate, either you’re a newbie to economics or you’re full of prejudice that Govt is only pro-corporate.
Firstly, you need to understand what Corporate tax is.
Corporate tax is the tax that a company needs to pay on profits, and it is calculated after all the senior officials of the company i.e., its board of directors, CEO, CFOs etc., receive their salaries. The companies’ profits are no one’s money; it is shareholders money or is the money of the company as a whole. This cannot be used for consumption. These profits are reinvested by the company for various purposes, to expand the business (which will create jobs), for R&D (creates more and better jobs, specifically white collar jobs, promotes innovation in market), to increase market capitalization (which will provide more dividend for shareholders, stock prices rise) or to increase salaries of the salaries of their officials. If the last step is done, 2% surcharge comes into place, because these officials usually draw salaries over and above a crore.
So, won’t additional 5% at the disposal of corporates wouldn’t increase jobs in knowledge sector? It definitely will. Isn’t that a smart move?
Now don’t come up with saying, why not abolish all of it, if you’re thinking on those lines, that is not possible, because Joginder Sharma or Ishant Sharma can’t bowl 50 overs.
Enhanced allocation to MNREGA by 5000 crore.
This one is definitely like Sehwag style, like the “Keh Ke lunga” attitude. To know more about it, watch NaMo’s rhetoric in his speech for Motion of thanks to President.
BCCI or ICC Style
Some announcements were typical of BCCI or of parental style for overlooking different institutions or bringing in uniform legislations or increase in match-fees to get some earnings or to address the grievances of people.
1. Introduction the Indian Financial Code
2. Expert panel to prepare draft legislation to replace the multiple prior approvals
3. Set up public debt management agency
4. Task for setting up sector neutral grievance redressal agency.
5. Increase in excise duty.
Despite all the shots, strategies, at the end of the day it is upto team India to win the match and execute everything well.
Similarly Govt despite announcing all these measures has to perform, execute and win it for us.